What is an auditor's evaluation of a statistical sample for attributes when a test of 100 documents results in four exceptions if the tolerable exception rate is 5%, the expected population exception rate is 3%, and the allowance for sampling risk is 2%?
A) Accept the sample results as support for planned reliance on the control because the tolerable rate less the allowance for sampling risk equals the expected population exception rate.
B) Modify planned reliance on the control because the sample exception rate plus the allowance for sampling risk exceeds the tolerable rate.
C) Modify planned reliance on the control because the tolerable rate plus the allowance for sampling risk exceeds the expected population exception rate.
D) Accept the sample results as support for planned reliance on the control because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate.

Question

Quizplus · Accepted Answer

The auditor's evaluation of a statistical sample for attributes involves comparing the sample exception rate to the tolerable rate taking into account the allowance for sampling risk. In this case, the tolerable exception rate is 5%, the expected population exception rate is 3%, and the allowance for sampling risk is 2%. The sample exception rate is 4%, which is less than the expected population exception rate but exceeds the tolerable rate less the allowance for sampling risk (which is 3%). Therefore, the auditor should modify planned reliance on the control because the sample exception rate plus the allowance for sampling risk exceeds the tolerable rate.

What Is an Auditor's Evaluation of a Statistical Sample for Attributes