Sampling

Question 1

Acceptable risk of overreliance (ARO).

Answer 1

The risk that the auditor is willing to take of accepting a control as effective or a rate of monetary misstatements as tolerable,when the true population exception rate is greater than the tolerable exception rate.

Question 2

Tolerable exception rate (TER).

Answer 2

Exception rate that the auditor will permit inthe population and still be willing to conclude the control is operating effectively and/or the amount of monetary misstatements in the transactions established during planning is acceptable.

Question 3

Estimated populationexception rate (EPER).

Answer 3

Exception rate thatthe auditor expects to find in the population before testing begins.

Question 4

Sample exception rate (SER).

Answer 4

Number of exceptions in the sample divided by the sample size.

Question 5

Computed upper exception rate (CUER).

Answer 5

The highest estimated exception rate in the population at a given ARO.