Tolerable Misstatement Is the Amount of Misstatement in an Account

question 90

True/False

Tolerable misstatement is the amount of misstatement in an account balance that the auditor could tolerate and still not judge the underlying account balance to be materially misstated.

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Definitions:

Events

Outcomes or occurrences that can be clearly defined, measured, and distinguished from other events in a probability context.

Outcomes

The possible results or consequences of an experiment, procedure, or situation.

Event

An outcome or a set of outcomes of a random experiment or phenomenon, which can be quantified for analysis in probability and statistics.

Simple Events

Basic occurrences or outcomes in probability that cannot be broken down into simpler components.