For an attributes sampling plan, the tolerable deviation rate is 4%, the computed upper deviation rate is 7%, the sample deviation rate is 3%, and the risk of assessing control risk too low is 5%. Which of the following is true?
A)The auditor must increase control risk because the risk of assessing control risk too low is greater than the tolerable deviation rate.
B)The auditor is likely to increase control risk because the risk of assessing control risk too low is greater than the tolerable deviation rate.
C)The auditor must increase control risk because the computed upper deviation rate is greater than the tolerable deviation rate.
D)The auditor is likely to increase control risk because the computed upper deviation rate is greater than the tolerable deviation rate.

Question

Quizplus · Accepted Answer

The correct answer is D because the computed upper deviation rate (7%) being greater than the tolerable deviation rate (4%) indicates that the actual deviation rate could be higher than what is acceptable, leading the auditor to likely increase the control risk. The risk of assessing control risk too low (5%) and the sample deviation rate (3%) are not directly relevant to this decision.

For an Attributes Sampling Plan, the Tolerable Deviation Rate Is