If the tolerable rate of deviation is 6 percent,the acceptable risk of overreliance is 5 percent,and the upper limit rate of deviation is 4.8 percent,which of the following statements is not true?
A) The probability that the population deviation rate is more than 4.8 percent is 5 percent.
B) The probability that the population deviation rate is less than or equal to 4.8 percent is 95 percent.
C) The auditor would initially conclude that the internal control is not functioning as intended.
D) The auditor has limited the exposure to the risk of overreliance to 5 percent.

Question

Quizplus · Accepted Answer

The statement "The auditor would initially conclude that the internal control is not functioning as intended" is not true. If the upper limit rate of deviation is below the tolerable rate of deviation, it indicates that the internal control is functioning as intended. Therefore, the auditor would not initially conclude that the internal control is not functioning as intended. The other statements are true based on the given information.

If the Tolerable Rate of Deviation Is 6 Percent,the Acceptable