The tolerable deviation rate in sampling for tests of controls is:
A)Used to determine the probability of the auditor's conclusion based upon reliance factors.
B)The probability that the financial statements are not materially in error.
C)A measure of the reliability of substantive tests.
D)The rate the auditor will tolerate without modifying the planned assessment of control risk.

Question

Quizplus · Accepted Answer

The tolerable deviation rate is the maximum deviation rate the auditor is willing to tolerate without changing the planned assessment of control risk. It is used to evaluate the results of tests of controls and determine the sample size needed for the tests. Choices A, B, and C are not accurate definitions of the tolerable deviation rate for tests of controls.

The Tolerable Deviation Rate in Sampling for Tests of Controls