Question: 31.Assuming the tolerable deviation rate is 5%, the expected population deviation rate is 3%, and the allowance for sampling risk is 2%. What should an

31.Assuming the tolerable deviation rate is 5%, the expected population deviation rate is 3%, and the allowance for sampling risk is 2%. What should an auditor conclude if test of 100 randomly chosen documents reveal 4 deviation?

a.Accept the sample results as support for assessing control risk below the maximum level because the tolerable deviation rate less the allowance for sampling risk equals the expected population deviation rate

b.Assess control risk at the maximum level because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable deviation rate

c.Assess control risk at the maximum level because the tolerable deviation rate plus the allowance for sampling risk exceeds the expected population deviation rate

d.Accept the sample result as support for assessing control risk below the maximum because the sample deviation rate plus the allowance for sampling risks exceeds the tolerable rate

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The sprinter begins from rest at position A and accelerates along the track. If the stationary tracking camera at O is rotating counterclockwise at the rate of 12.5 deg/s when the sprinter passes the...

Please help me solve this. Subject: Internal Auditing ABC Company processes on average 700 vouchers payable every month. Each voucher package contains a copy of the check disbursed and supporting...

21. Assuming the tolerable deviation rate is 5 percent, the expected population rate is 3 percent, and the allowance for sampling risk is 2 percent, what should an auditor conclude if tests of 100...

In your group discussion this week, respond to the following scenario: Bill Pei, CPA, is about to begin his audit of the accuracy of his client's accounts receivable. Based on experience, he expects...

Can someone please help me to write a work paper for an audit (1 page) about the exercise on the attachment? 1. Determine the objective of the test. 2. Define the attributes and deviation conditions...

Isaac Brown, senior-in-charge of the audit of Martin Corp, has decided to test the following three controls for Martins revenue process. All sales invoices are supported by proper documentation, that...

PLS DONT COPY PASTE OTHER ANSWERS FROM OTHER CHEGG THEY ARE NOT HELPFUL AND THEY DONT GIVE THE ANSWER TO THE GIVEN BLANK Bill Pei, CPA, is about to begin his audit of the accuracy of his clients...

Bill Pei, CPA, is about to begin his audit of the accuracy of his clients accounts receivable. Based on experience, he expects that approximately 1 percent of the clients 40,000 accounts have errors....

PLS DONT COPY PASTE OTHER ANSWERS FROM OTHER CHEGG THEY ARE NOT HELPFUL AND THEY DONT GIVE THE ANSWER TO THE GIVEN BLANK Bill Pei, CPA, is about to begin his audit of the accuracy of his clients...

Bill Pei, CPA, is about to begin his audit of the accuracy of his client's accounts receivable. Based on experience, he expects that approximately 1 percent of the client's 40,000 accounts have...

List three dimensions by which we can describe the self-concept.

23. A solution is prepared by diluting 0.055 mol HNO3 with water to a volume of 1.75 L. What is the pH of the solution? Answer: 24. An aqueous solution with a pH of 2.00 is diluted from 1.0 L to 3.0...

Evaluate the surface integral. 0 x y z d S , S is the cone with parametric equations x = wcos ( v ) , = wsin ( v ) , x = w , 0 3 , 0 v 2 2 4 3 2 2 1 0

1. Analyze and discuss the following proposition by Franco Modigilani and Merton Milles (MM): "... when there are no taxes and capital markets work well, the market value of a company does not depend...

5. A signaling pathway that is important during embryonic development of animals is the notch signaling pathway. The diagram below shows an example of a notch system used in controlling the extent of...

In multicellular organisms, cells have to be able to communicate with other cells so they can work together to coordinate their activities for the benefit of the entire organism. One type of...

Human papillomavirus is hypothesized to be responsible for some types of cervical cancer. A woman who becomes infected with this virus can recover from the initial viral infection but may retain...

A simple well-known game, tic-tac-toe, is played on a three-by-three grid of squares by two players. The players alternate turns. Each player chooses a square and places a mark in a square. (One...

1. Buying groceries at the supermarket. 2. Selling a house 3. Getting married out of community of property. 4. Starting a new cellphone contract. 5. Arranging monthly instalments to pay for the car...

1. What is the meaning of the information we are collecting?

3. How much information do we need to collect?

2. What types of information are we collecting?