In the study of internal control,the auditor uses sampling to compare the ______________ to the ______________.
A) adjusted estimate of misstatement; overall materiality
B) sampling risk; precision
C) adjusted estimate of the deviation rate; tolerable rate of deviation
D) precision interval; upper limit on misstatement

Question

Quizplus · Accepted Answer

The auditor uses sampling to compare the adjusted estimate of the deviation rate (the actual deviation rate found in the sample) to the tolerable rate of deviation (the maximum deviation rate the auditor is willing to accept). This helps the auditor evaluate the effectiveness of the client's internal control over a specific process or transaction. Option A is incorrect because adjusted estimate of misstatement is used in substantive testing, not internal control testing. Option B is unrelated to the comparison conducted in internal control testing. Option D refers to the precision of the estimate, which is not the primary consideration in internal control testing.

In the Study of Internal Control,the Auditor Uses Sampling to Compare