Answer: When evaluating an attributes sample, the focus is on the upper limit of deviations in the sample because it is used to determine whether the sample results are acceptable or not. The upper limit of deviation is calculated using statistical tables and represents the maximum number of deviations that can be present in a sample while still allowing the auditor to conclude that the control is operating effectively with a specified level of confidence. If the upper limit of deviation exceeds the tolerable deviation rate in attributes sampling, the auditor has several alternative courses of action available. One option is to increase the sample size to reduce the sampling risk and lower the upper limit of deviation. Another option is to perform additional testing to obtain more evidence about the effectiveness of the control. If neither of these options is feasible, the auditor may need to modify the planned audit procedures or issue a qualified opinion on the financial statements.
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