Upper Error Limit (UEL)
Definition
The maximum error rate that could exist in the population at the chosen confidence level, given the number of exceptions found in the sample. If the UEL exceeds the tolerable deviation rate, the auditor cannot support a clean opinion on that control.
- Field
- Forensic accounting, audit sampling
- Also called
- Upper limit rate of deviation
- Depends on
- Sample size, exceptions found, chosen confidence level
- Decision rule
- If UEL exceeds tolerable deviation rate, control cannot be relied upon
Common questions
How is UEL different from the sample exception rate?+
The sample exception rate is simply the errors observed divided by items tested. UEL adds a statistical allowance for sampling risk, so it is always equal to or higher than the raw observed rate.
Can a low observed error rate still produce a failing UEL?+
Yes, with a small sample size the statistical margin added for sampling risk can push the UEL above the tolerable rate even when very few or no exceptions were found in the tested items.
Related terms
- Attribute Sampling
- A statistical sampling method that tests whether each selected item either has or lacks a specified attribute, for example whether a change...
- Confidence Level
- An explicit label attached to an attribution assessment indicating how strongly the available evidence supports the conclusion. Standard tiers are low, medium,...
- Judgement Sampling
- Selection of audit items based on the auditor's professional assessment of where errors or weaknesses are most likely to exist. Results cannot...
- Tolerable Deviation Rate
- The maximum error rate the auditor is willing to accept in the population without modifying the audit conclusion. If the projected error...
- Working Paper
- The documented record of an audit procedure: what was tested, how items were selected, the evidence obtained, any exceptions found, and the...