The amount of expected misstatement in the population when performing a substantive test _______.
A)relates to the risk that the audit opinion is misstated
B)is the amount of misstatement the client expects in a transaction class or account balance
C)is the amount of misstatement the auditor expects in a transaction class or account balance
D)should be ignored if the misstatement is less than 20%

Question

Quizplus · Accepted Answer

The amount of expected misstatement in the population when performing a substantive test is the amount of misstatement the auditor expects in a transaction class or account balance. This is important in determining the level of audit risk and in designing appropriate audit procedures. Choices A and B are incorrect as they do not accurately describe the concept of expected misstatement. Choice D is incorrect as the materiality threshold for misstatements is determined based on a variety of factors and cannot be generalized as a set percentage.

The Amount of Expected Misstatement in the Population When Performing