Tolerable Rate is defined as the maximum rate of acceptability of misstatement. It’s the largest variance accepted in audit sampling in order to rely upon a specific control. Expected Population Deviation Rate is the rate expected to exist in the population. The expected deviation rate represents the auditor's best estimate of the actual failure rate of a control in a population. Allowance for Sampling Risk can be defined as uncertainties associated with sampling. It is the difference between tolerable deviation and mean of population. To describe: Relationship between tolerable deviation and expected deviation plus allowance risk.

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Chapter 8, Problem 8.19MCQ

To determine

Introduction:

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

Expected Population Deviation Rate is the rate expected to exist in the population. The expected deviation rate represents the auditor's best estimate of the actual failure rate of a control in a population.

Allowance for Sampling Risk can be defined as uncertainties associated with sampling. It is the difference between tolerable deviation and mean of population.

To describe: Relationship between tolerable deviation and expected deviation plus allowance risk.

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