What is an auditor\'s evaluation of a statistical sample for attributes when a t

Question

What is an auditor's evaluation of a statistical sample for attributes when a test of50 documents results in three deviations ifthe tolerable rate is 7%, the expected population deviation rate is 5%, and the allowance for sampling risk is 2%? (a) 25. Accept the sample results as support for the planned assessed level of control risk because the tolerable rate minus the allowance for sampling risk equals the expected population deviation rate. Modify the planned assessed level of control risk because the tolerable rate plus the allowance for sampling risk exceeds the expected population deviation rate. Accept the sample results as support for the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate. Modify the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate. (b) (c) (d)

Explanation / Answer

Here the deviation rate plus the allowance for the sampling risk as per the question exceeds the tolerable rate, therefore it may lead to the increase in the asessed level of control risk.

Here the deviation rate of 6% plus the sampling risk of 2% = 8% > than the tolerable limit of 7%

hence, option D is correct

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