Required Sample Size Increases as the Auditor's Tolerable Misstatement for an Account

question 116

True/False

Required sample size increases as the auditor's tolerable misstatement for an account balance or class of transactions decreases.

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Definitions:

Journal

A detailed record where all financial transactions of a business are initially recorded, listed in chronological order.

Chart of Accounts

A systematic list of accounts that a company uses for the organization of its financial transactions and to prepare financial statements.

Salaries Expense

The cost incurred by a company for the salaries of its employees.

Journal Entry

A record in accounting that notes the details of a financial transaction.