What is Expected population deviation rate?
In short
In attribute sampling for tests of controls, the expected population deviation rate is the auditor's estimate of how often the control fails, based on prior years or a small preliminary sample.
Key takeaways
- A higher expected rate requires a larger sample.
- If it is close to the tolerable rate, testing the control may not be worthwhile.
- Sample size also rises with a lower tolerable rate or a lower acceptable risk of overreliance.
Where it's tested
AUD: Audit Sampling — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
In a test of controls, the tolerable deviation rate is 5% and the computed upper deviation rate based on the sample is 6.2%. What should the auditor conclude?