Tolerable misstatement when performing a substantive test _______.
A)is the maximum dollar amount of misstatement that an auditor is willing to accept within the population tested and conclude that the population is presented fairly
B)is the minimum dollar amount of misstatement that an auditor is willing to accept within the population tested, and conclude that the population is presented fairly
C)does not apply if the auditor plans to issue an unmodified opinion
D)does not apply if the auditor plans to issue a modified opinion

Question

Quizplus · Accepted Answer

Tolerable misstatement represents the maximum dollar amount of misstatement that an auditor is willing to accept within the population tested and conclude that the population is presented fairly. It is used to assess whether the aggregate amount of uncorrected and undetected misstatements in the financial statements is material. Therefore, option A is the correct answer. Option B is incorrect because it suggests that the auditor is willing to accept misstatements below a certain threshold, which is not accurate. Option C and D are incorrect because the applicability of tolerable misstatement is not dependent on the auditor's opinion on the financial statements.

Tolerable Misstatement When Performing a Substantive Test _______