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You are determining the significance of the following: you set a 5% risk of assessing control risk ...

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You are determining the significance of the following: you set a 5% risk of assessing control risk ...

You are determining the significance of the following: you set a 5% risk of assessing control risk too low and your computation of the upper deviation risk is 7%. What could you conclude?

▸ There is a 95% chance the deviation rate in the population is less than 5%.

▸ There is a 5% chance the deviation rate in the population is less than 7%.

▸ There is a 95% chance the deviation rate in the population exceeds 95%.

▸ There is a 5% chance the deviation rate in the population exceeds 7%.

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Auditing and Assurance Services

Edition: 17^th

Authors: Arens, Elder, Beasley, Hogan

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Thanks for your help!!

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