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Flashcards in Sampling Deck (5):

Acceptable risk of overreliance (ARO).

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.


Tolerable exception rate (TER).

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.


Estimated populationexception rate (EPER).

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


Sample exception rate (SER).

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


Computed upper exception rate (CUER).

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