The term "tolerable misstatement," used by the Public Company Accounting Oversight Board auditing standards, has the same meaning as "performance materiality," described by AICPA and International Auditing and Assurance Standards Board standards.

Question

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Tolerable misstatement and performance materiality are two different terms used interchangeably to describe the amount of misstatement that an auditor can tolerate in the financial statements without affecting their overall opinion on the fairness of the statements.

The Term "Tolerable Misstatement," Used by the Public Company Accounting