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:
A) less than the tolerable deviation rate (TDR).
B) less than or equal to the TDR.
C) greater than or equal to the TDR.
D) greater than the TDR.

Question

Quizplus · Accepted Answer

The computed upper deviation rate (CUDR) is the maximum rate of deviation that the auditor can tolerate in the population while still being able to accept a control risk assessment lower than the maximum. The tolerable deviation rate (TDR) is the maximum rate of deviation that the auditor is willing to accept in the population. Therefore, for the population to be considered acceptable based on the acceptable risk of assessing control risk too low (ARO), the CUDR must be less than or equal to the TDR.

Before the Population Can Be Considered Acceptable Based on the Acceptable