How Does the Auditor Establish the Level of Tolerable Misstatement

question 68

Multiple Choice

How does the auditor establish the level of tolerable misstatement in a variables sampling application?

• A)Based on prior assessments of audit risk,risk of material misstatement,and analytical procedures risk.
• B)Based on the recorded amount of the account balance as well as the relationship of the account balance with important financial statement subtotals.
• C)Based on the findings in prior audits or based on a small sample taken during the current year.
• D)Based on the anticipated cost of conducting additional substantive procedures.

---

Definitions:

Political Barrier

Obstacles related to power dynamics, decision-making processes, or political interests that can hinder progress or change within organizations or societies.

Training Evaluation

The assessment of the efficiency and effectiveness of training programs in meeting the learning objectives and desired outcomes.

Organizational Issues

Challenges or problems within an organization that affect its operations or employee performance.

Internal Referencing Strategy

A method of assessment or evaluation that compares current performance with past performances within the same entity.