Below are descriptions of how key parameters are determined in an attribute samp
ID: 2593126 • Letter: B
Question
Below are descriptions of how key parameters are determined in an attribute sampling plan. Indicate, using the correct letter, which parameter is most closely associated with the description. Each parameter is associated with only one description.
A. Tolerable deviation rate
B. Expected deviation rate
C. Population size
D. Sample size
E. Sample deviation rate.
F. Upper limit deviation rate.
G. Allowance for sampling risk.
___ 1. Estimated based on prior audits or a pilot sample of controls.
___ 2. Determined after reviewing physical representation, such as number of sales invoices processed during the year.
___ 3. Calculated by subtracting the sample deviation rate from the upper limit deviation rate.
___ 4. Determined based on tolerable deviation rate, expected deviation rate, and the risk of assessing control risk too low.
___ 5. Determined judgmentally by the auditor based on the acceptable level of control risk.
___ 6. Determined based on the sample size, number of deviations noted, and risk of assessing control risk too low.
___ 7. Calculated by dividing the number of deviations by the sample size.
Explanation / Answer
Answer:
1
Allowance for
sampling risk
Estimated based on prior audits or a pilot sample of controls.
2
Expected
population
deviation rate
Determined after reviewing physical representation, such as number of sales invoices processed during the year.
3
Population
size
Calculated by subtracting the sample deviation rate from the upper limit deviation rate.
4
Sample rate
of deviation
Determined based on tolerable deviation rate, expected deviation rate, and the risk of assessing control risk too low.
5
Sample size
Determined judgmentally by the auditor based on the acceptable level of control risk.
6
Tolerable rate
of deviation
Determined based on the sample size, number of deviations noted, and risk of assessing control risk too low.
7
Upper
limit rate of
deviation
Calculated by dividing the number of deviations by the sample size.
1
Allowance for
sampling risk
Estimated based on prior audits or a pilot sample of controls.
2
Expected
population
deviation rate
Determined after reviewing physical representation, such as number of sales invoices processed during the year.
3
Population
size
Calculated by subtracting the sample deviation rate from the upper limit deviation rate.
4
Sample rate
of deviation
Determined based on tolerable deviation rate, expected deviation rate, and the risk of assessing control risk too low.
5
Sample size
Determined judgmentally by the auditor based on the acceptable level of control risk.
6
Tolerable rate
of deviation
Determined based on the sample size, number of deviations noted, and risk of assessing control risk too low.
7
Upper
limit rate of
deviation
Calculated by dividing the number of deviations by the sample size.
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