Tolerable Misstatement Is the Maximum Amount of Misstatement the Auditor

question 112

True/False

Tolerable misstatement is the maximum amount of misstatement the auditor can accept in the population without requiring an audit adjustment or a qualified audit opinion.

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Definitions:

TOTE

The self-regulation feedback loop of Test, Operate, Test, Exit.

Evaluate

To assess or examine something in order to understand its value, importance, or condition, often leading to a judgment.

Error Management Theory

The idea that both men and women seek to minimize the most costly type of error, but that men’s and women’s goals, and hence worst errors, differ.

Certainty Effect

In decision making, the greater weight given to definite outcomes than to probabilities.