Which of the following is the least likely outcome when the upper limit on misstatements exceeds the tolerable misstatement?
A)The auditor would be exposed to the risk of incorrect rejection.
B)The auditor would be exposed to an efficiency loss.
C)The auditor would consider expanding the sample to evaluate additional transactions or components of the account balance.
D)The auditor would conclude that the account balance is fairly stated.

Question

Quizplus · Accepted Answer

If the upper limit on misstatements exceeds the tolerable misstatement, it means that the auditor has found misstatements that are greater than what they consider to be acceptable. Therefore, it is unlikely that the auditor would conclude that the account balance is fairly stated. They would need to take further action to address the misstatements found. Choices A-C are all possible outcomes when the upper limit on misstatements exceeds the tolerable misstatement.

Which of the Following Is the Least Likely Outcome When