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

When using sampling in the context of internal control, the auditor typically selects a sample of items and determines the rate of deviation (i.e., instances where internal control procedures were not followed). The auditor then compares the adjusted estimate of the deviation rate to the tolerable rate of deviation (i.e., the rate of deviation that the auditor is willing to accept without concluding that internal control is ineffective). Therefore, choice C correctly identifies the two variables that the auditor would typically compare when using sampling in the context of internal control.

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