If an auditor calculated an upper limit rate of deviation of 5 percent when the tolerable rate of deviation was 4 percent,the auditor would conclude that
A) The population deviation rate is low enough to rely on internal control as planned.
B) The population deviation rate may be higher than that necessary to rely on internal control as planned.
C) The control risk can be assessed at planned levels.
D) The control risk should be assessed at lower levels.

Question

Quizplus · Accepted Answer

The upper limit rate of deviation is higher than the tolerable rate of deviation, indicating that there may be a higher risk of control failure than anticipated. Therefore, the auditor would conclude that the population deviation rate may be higher than necessary to rely on internal control as planned.

If an Auditor Calculated an Upper Limit Rate of Deviation