If an audit team calculated a ULRD of 5 percent when the tolerable rate of deviation was 4percent, both at the same risk of overreliance, control risk should bea. Assessed at the level associated with the 4 percent tolerable rate of deviation.b. Increased and substantive procedures should be adjusted accordingly.c. Assessed at the maximum level (100 percent) because the company’s performance failedthe test.d. Decreased and substantive procedures should be adjusted accordingly
If an audit team calculated a ULRD of 5 percent when the tolerable rate of deviation was 4percent, both at the same risk of overreliance, control risk should bea. Assessed at the level associated with the 4 percent tolerable rate of deviation.b. Increased and substantive procedures should be adjusted accordingly.c. Assessed at the maximum level (100 percent) because the company’s performance failedthe test.d. Decreased and substantive procedures should be adjusted accordingly
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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If an audit team calculated a ULRD of 5 percent when the tolerable rate of deviation was 4
percent, both at the same risk of overreliance, control risk should be
a. Assessed at the level associated with the 4 percent tolerable rate of deviation.
b. Increased and substantive procedures should be adjusted accordingly.
c. Assessed at the maximum level (100 percent) because the company’s performance failed
the test.
d. Decreased and substantive procedures should be adjusted accordingly
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