The upper limit of the probable population exception rate is the
A) upper exception rate.
B) estimated population exception rate.
C) computed upper exception rate.
D) tolerable exception rate.

Question

Quizplus · Accepted Answer

The computed upper exception rate (CUER) is the upper limit of the probable population exception rate. This is determined using statistical methods based on the sample size and the number of exceptions found in the sample. Choice A is incorrect because the upper exception rate is not a commonly used term in auditing. Choice B is incorrect because the estimated population exception rate is just an estimate, while the CUER is a specific upper limit. Choice D is incorrect because the tolerable exception rate is a subjective decision made by management, while the CUER is based on statistical analysis.

The Upper Limit of the Probable Population Exception Rate Is