Before the population can be considered acceptable based on the acceptable risk of assessing control risk too low (ARO), the computed upper deviation rate (CUDR)must be __________ the tolerable deviation rate (TDR).
A) greater than or equal to
B) greater than
C) less than or equal to
D) less than

Question

Quizplus · Accepted Answer

The tolerable deviation rate (TDR) is the maximum deviation rate that the auditor is willing to accept and still conclude that the control is effective. If the computed upper deviation rate (CUDR) is less than or equal to the TDR, then the auditor can conclude that the assessed control risk is acceptable based on the acceptable risk of assessing control risk too low (ARO). Therefore, the correct answer is C - "less than or equal to."

Before the Population Can Be Considered Acceptable Based on the Acceptable