As a result of tests of controls, an auditor assessed control risk too low and decreased substantive testing.This occurred because the true deviation rate in the population was:
A) more than the deviation rate in the auditor's sample.
B) less than the deviation rate in the auditor's sample.
C) less than the risk of assessing control risk too low based on the auditor's sample.
D) more than the risk of assessing control risk too low based on the auditor's sample.

Question

Quizplus · Accepted Answer

The auditor assessed control risk as too low because the actual deviation rate in the full population was higher than what was observed in the auditor's sample. This discrepancy led the auditor to incorrectly conclude that controls were more effective than they actually were, resulting in a reduction of substantive testing.

As a Result of Tests of Controls, an Auditor Assessed