Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control. Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested. In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls. To describe: Relationship between tolerable rate and upper deviation rate.

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Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

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Answer 2

Question

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Answer 6

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Answer 7

Chapter 8, Problem 8.15MCQ

To determine

Introduction:

Tolerable Deviation Rate is defined as the maximum rate of acceptability of misstatement. It is the maximum possible variance accepted in audit sampling in order to rely upon a specific control.

Upper Deviation Rate is defined as sample deviation rate and an appropriate allowance for sampling risks.If the upper deviation limit is less than or equal to the tolerable rate, the sample results support reliance on the control procedures tested.

In this case, tolerable deviation rate i.e., 7% which is lower than upper deviation rate of 8% which clearly shows controls is ineffective. Auditor cannot rely on the entity’s internal controls.

To describe: Relationship between tolerable rate and upper deviation rate.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 8 - Prob. 8.1RQ Ch. 8 - Prob. 8.2RQ Ch. 8 - Prob. 8.3RQ Ch. 8 - Prob. 8.4RQ Ch. 8 - Prob. 8.5RQ Ch. 8 - Prob. 8.6RQ Ch. 8 - Prob. 8.7RQ Ch. 8 - Prob. 8.8RQ Ch. 8 - Prob. 8.9RQ Ch. 8 - Prob. 8.10RQ

Solution Summary: The author defines tolerable deviation rate as the maximum rate of acceptability of misstatement. Upper Deviation Rate is defined as sample deviation and an appropriate allowance for sampling risks.

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