If Tolerable Misstatement for Accounts Payable Is $1,000, the Auditor

question 2

True/False

If tolerable misstatement for accounts payable is $1,000, the auditor would need to obtain more audit evidence for that account than if tolerable misstatement were $100,000.

---

Definitions:

Units-Of-Activity

A depreciation method where the expense is based on the actual usage or activity of the asset rather than the passage of time.

Production Based

A method or approach that focuses on enhancing the efficiency and output of the manufacturing process, often measured against set production targets.

Straight-Line

A method of allocating the cost of an asset evenly over its useful life for the purposes of depreciation or amortization.

Declining-Balance

A method of depreciation where an asset loses value at a rate that decreases over time, opposite of straight-line depreciation.