What Is Tolerable Misstatement

question 40

Multiple Choice

What is tolerable misstatement?

• A)The maximum dollar amount of misstatement that an auditor is willing to accept in a transaction class or an account balance.
• B)The amount of misstatement the auditor expects in a transaction class or account balance.
• C)The level of assurance that the sample is representative of the population.
• D)A high level of assurance leading to a lower level of sampling risk.

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Definitions:

Markup Percent

The percentage added to the cost price of goods to cover overhead and profit, expressed as a portion of the cost.

Meat Slicing Machine

A device used in the preparation of food to slice meat thinly and consistently.

Percent Markup

The percentage added to the cost price of goods to achieve a selling price.

Fax Machine

A device that transmits scanned documents as a telephone transmission to a receiving machine producing a copy.