In the study of internal control,the auditor uses sampling to compare the ____ to the _____.
A) error; overall materiality level
B) sampling risk; precision
C) deviation rate; tolerable rate of deviation
D) precision interval; upper limit on misstatement

Question

Quizplus · Accepted Answer

When using sampling to test internal controls, the auditor is comparing the deviation rate (the percentage of times the control does not function as intended) to the tolerable rate of deviation (the maximum percentage of deviation that the auditor is willing to accept). Therefore, choice C is the correct answer. Choice A is incorrect because overall materiality level is not relevant to the comparison being made. Choice B is incorrect because sampling risk is the risk that the sample is not representative of the population, and is not directly compared to precision. Choice D is incorrect because precision interval and upper limit on misstatement are used in substantive testing, not testing of internal controls.

In the Study of Internal Control,the Auditor Uses Sampling to Compare