Tolerable Misstatement When Performing a Substantive Test _______

question 154

Multiple Choice

Tolerable misstatement when performing a substantive test _______.

• A)is the maximum dollar amount of misstatement that an auditor is willing to accept within the population tested and conclude that the population is presented fairly
• B)is the minimum dollar amount of misstatement that an auditor is willing to accept within the population tested, and conclude that the population is presented fairly
• C)does not apply if the auditor plans to issue an unmodified opinion
• D)does not apply if the auditor plans to issue a modified opinion

---

Definitions:

Mutually Exclusive

Mutually exclusive refers to events in probability and statistics that cannot occur at the same time, indicating that the occurrence of one event necessarily excludes the occurrence of the other.

Collectively Exhaustive

A set of events is collectively exhaustive if at least one of the events must occur.

Probability

A measure of the likelihood that an event will occur, expressed on a scale from 0 (impossibility) to 1 (certainty).

Random Experiment

An experimental process that leads to well-defined but unpredictable outcomes.