In using audit sampling for exception rates:
A)the auditor wants to know the most the exception rate is likely to be.
B)sampling error is the likelihood that the auditor will miss a monetary misstatement.
C)the upper limit of the interval estimate is known as the sampling risk.
D)CUER cannot be considered in the context of specific audit objectives.

Question

Quizplus · Accepted Answer

In using audit sampling for exception rates, the auditor wants to know the most the exception rate is likely to be. This is done by calculating the upper limit of the interval estimate, which is the maximum expected exception rate in the population. The auditor can then compare this to the tolerable exception rate to determine whether the control is effective or not. Sampling error refers to the potential for the sample to not be representative of the population, so B is incorrect. The upper limit of the interval estimate is not the same as sampling risk (which is the risk of reaching the wrong conclusion based on the sample), so C is incorrect. CUER (Cumulative Unidentified Error Rate) can be considered in the context of specific audit objectives, so D is incorrect.

In Using Audit Sampling for Exception Rates