When auditors allocate the preliminary judgment about materiality to account balances, the materiality allocated to any given account balance is referred to as:
A) the materiality range.
B) the error range.
C) tolerable materiality.
D) tolerable misstatement.

Question

Quizplus · Accepted Answer

The materiality allocated to any given account balance is referred to as tolerable misstatement. Tolerable misstatement is the maximum amount of error in a financial statement account balance or class of transactions that the auditor is willing to accept and still give an unqualified opinion.

When Auditors Allocate the Preliminary Judgment About Materiality to Account