An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the
A)sample rate of exceptions is less than the expected rate of exception used in planning the sample.
B)tolerable exception rate less the allowance for sampling risk exceeds the sample rate of deviation.
C)sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate.
D)sample rate of exceptions plus the allowance for sampling risk equals the tolerable exception rate.

Question

Quizplus · Accepted Answer

The auditor should increase the assessed level of control risk when the sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate. This indicates that the actual level of exceptions in the population might be higher than what the auditor is willing to accept, suggesting that the controls are less effective than initially assessed.

An Auditor Who Uses Statistical Sampling for Attributes in Testing