The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the
A)tolerable exception rate.
B)estimated population exception rate.
C)acceptable risk of overreliance.
D)sample exception rate.

Question

Quizplus · Accepted Answer

The tolerable exception rate is the maximum rate of deviation (exceptions) from the control procedures that the auditor will permit in the population and still be willing to use the assessed level of control risk. The auditor would typically set the tolerable exception rate at a lower level than the estimated or sample exception rate in order to have a reasonable level of assurance that the controls are effective.

The Exception Rate the Auditor Will Permit in the Population