You are determining the significance of the following: you set a 5% risk of assessing control risk too low and your computation of the upper deviation risk is 7%.What could you conclude?
A)There is a 95% chance the deviation rate is the population is less than 5%.
B)There is a 5% chance the deviation rate in the population is less than 7%.
C)There is a 95% chance the deviation rate in the population exceeds 95%.
D)There is a 5% chance the deviation rate in the population exceeds 7%.

Question

Quizplus · Accepted Answer

The 5% risk of assessing control risk too low means that we are willing to accept only a 5% chance of concluding that control risk is lower than it actually is, which implies a 95% confidence level. The computation of the upper deviation risk being 7% means that there is a 5% chance that the deviation rate in the population exceeds 7%. Therefore, we can conclude that there is a 5% chance the deviation rate in the population exceeds 7%.

You Are Determining the Significance of the Following: You Set