"Tolerable misstatement" is the termed used to indicate materiality at the:
A) balance sheet level.
B) account balance level.
C) income statement level.
D) company-wide level.
E) transactions level.

Question

Quizplus · Accepted Answer

Tolerable misstatement refers to the amount of misstatement or error that can be accepted in an account balance without affecting the decision-making process of users of financial statements. It is applied at the account balance level to help auditors determine the nature, timing, and extent of audit procedures.

"Tolerable Misstatement" Is the Termed Used to Indicate Materiality at The