The maximum rate of deviation that may exist in the operation of a control policy or procedure before the auditors would reduce reliance on internal control is referred to as
A) acceptable rate of deviation.
B) control risk.
C) tolerable rate of deviation.
D) upper limit rate of deviation.

Question

Quizplus · Accepted Answer

The maximum rate of deviation that may exist in the operation of a control policy or procedure before the auditors would reduce reliance on internal control is referred to as the tolerable rate of deviation. This is the level at which auditors consider the risk of material misstatement (control risk) to be acceptable. The acceptable rate of deviation and the upper limit rate of deviation are not commonly used terms in auditing.

The Maximum Rate of Deviation That May Exist in the Operation