The auditor uses professional judgment in establishing the tolerable exception rate for an attribute being tested in a population.

Question

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The auditor does use professional judgment in establishing the tolerable exception rate for an attribute being tested in a population. This means that the auditor determines the acceptable level of errors or exceptions that may exist within the population being tested, and this level is used to assess the results of the testing. The auditor must consider various factors when establishing the tolerable exception rate, such as the level of risk associated with the attribute being tested, the size of the population, and the reliability of the data being used to perform the testing. Ultimately, the auditor's professional judgment is a critical component of ensuring the accuracy and reliability of audit results.

The Auditor Uses Professional Judgment in Establishing the Tolerable Exception