In short
In attribute sampling for tests of controls, the upper deviation limit is the highest rate of deviation in the population that the sample results support at the chosen confidence level.
Key takeaways
- It equals the sample deviation rate plus an allowance for sampling risk.
- The auditor compares it, not the sample rate, with the tolerable rate of deviation.
- If it exceeds the tolerable rate, the auditor can't rely on the control as planned.
Example
3 deviations in a sample of 100 (3%) with an upper deviation limit of 7.6% fails against a 6% tolerable rate.
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?