If the sample deviation rate is higher than the tolerable deviation rate,the auditor will
A)increase the amount of control testing
B)assume controls are not working
C)assume the controls are working
D)reduce the amount of substantive testing
E)increase the amount of substantive testing
F)both A and B
G)both A and C
H)Both B and E

Question

Quizplus · Accepted Answer

When the sample deviation rate exceeds the tolerable deviation rate, it indicates that the controls may not be as effective as presumed. Therefore, the auditor is likely to assume controls are not working as intended (B) and increase the amount of substantive testing (E) to gain assurance about the accuracy of the financial statements.

If the Sample Deviation Rate Is Higher Than the Tolerable