An auditor tests 12 out of 300 samples and found errors in 8 out of 12 of
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An auditor tests 12 out of 300 samples and found errors in 8 out of 12 of the samples. They determined that the control to reduce these errors was not operating effectively. If the auditor would’ve tested the full population, they would see that the remaining population had only one additional error, and the total error in the population of 300 were only 9. This would produce a different conclusion on the control’s operating effectiveness. What type of sampling risk is exhibited in this example?
(A) Type I, Alpha Risk of under reliance
(B) Type 1, Beta, Risk of under reliance
(C) Type 2, Alpha Risk of overreliance
(D) Type 2, Beta risk of overreliance
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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