What is tolerable misstatement?
A)The maximum dollar amount of misstatement that an auditor is willing to accept in a transaction class or an account balance.
B)The amount of misstatement the auditor expects in a transaction class or account balance.
C)The level of assurance that the sample is representative of the population.
D)A high level of assurance leading to a lower level of sampling risk.

Question

Quizplus · Accepted Answer

Tolerable misstatement is the maximum dollar amount of misstatement that an auditor is willing to accept in a transaction class or an account balance. It is the benchmark against which the auditor compares the amount of misstatement in the audit sample to evaluate the materiality of any potential errors or frauds.

What Is Tolerable Misstatement