You are conducting an internal control test in the revenue cycle. The test is to ensure credit limits were approved. The ARO used was 5% with zero expected deviations in the population and a tolerable error rate of 7% resulting in you testing 32 items. You are now analyzing the exceptions that arose after your control testing. There were four exceptions where credit had not been approved. One was for a customer that was subsequently placed on C.O.D. (cash on delivery), and three occurred while the business was in the middle of its busy season, processing three times more transactions than most other times of the year. The company's busy season normally lasts about two months.

Required:

A. What is an anomaly?

B. Are any of the exceptions that you found anomalous or errors? Why or why not?

C. Would you rely on the test? Why or why not?