Which of the following is most correct when using audit sampling for exception rates?
A) The auditor is concerned with the lowest rate.
B) The auditor is concerned with the highest rate.
C) The auditor is concerned with the average on previous audits.
D) The auditor is not concerned with the exception rate for audits of nonpublic companies.

Question

Quizplus · Accepted Answer

When using audit sampling for exception rates, the auditor is typically concerned with the highest rate because this indicates a higher risk of material misstatement. The auditor wants to ensure that the exception rate is not significant enough to affect the overall financial statements. Therefore, the auditor will focus on the highest rate to determine if further evaluation or testing is necessary.

Which of the Following Is Most Correct When Using Audit