Question

As a result of tests of controls, an auditor over relied on internal control and decreased substantive testing. This overreliance occurred because the true deviation rate in the population was:

1) less than the risk of assessing control risk too low on the auditor's sample.
2) less than the deviation rate in the auditor's sample.
3) more than the risk of assessing control risk too low on the auditor's sample.
4) more than the deviation rate in the auditor's sample.

Answer 1

The auditor over relied on internal controls because the true deviation rate in the population was less than the risk of assessing control risk too low on the auditor's sample.

Step-by-step explanation:

This question belongs to the subject of Business and is appropriate for a college-level course. In this scenario, the auditor over relied on internal controls and decreased substantive testing. The overreliance occurred because the true deviation rate in the population was less than the risk of assessing control risk too low on the auditor's sample.