What is the required level of confidence to estimate overpayment in an audit?

In auditing, especially regarding estimating overpayments, a 90% confidence level is generally accepted as the standard for ensuring that the audit results are reliable and statistically valid. This means that if multiple audits were conducted under the same conditions, 90% of them would yield similar results, providing a robust assurance that the findings can be relied upon when assessing financial accuracy.

Using a 90% confidence level balances the need for statistical rigor with practical considerations when assessing overpayments. This level provides a reasonable margin for error while ensuring that the conclusions drawn from the audit can be used to support necessary corrections or refund claims. A lower confidence level might not provide sufficient assurance about the validity of the findings, potentially leading to inaccurate conclusions about the financial health of the entity being audited.