Tolerable Misstatement Is Defined as

question 29

Multiple Choice

Tolerable misstatement is defined as

• A)the level of assurance that the account balance or class of transactions is not misstated
• B)the amount of misstatement,on the basis of the auditor's professional judgment,that should be present in the account balance or class of transactions
• C)the maximum misstatement in the account balance or class of transactions that the auditor is willing to accept
• D)the level of audit risk the auditor is willing to accept

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Definitions:

Z

In statistics, typically refers to a standard score indicating how many standard deviations an element is from the mean.

Null Hypothesis

A hypothesis in statistical analysis that assumes no significant difference or effect exists between certain characteristics, conditions, or variables.

Significance Level

The significance level, also known as alpha, is a pre-determined threshold for statistical significance, used to decide whether an observed effect is not due to chance.

P-values

A numerical measure that helps in determining the significance of results obtained in statistical hypothesis testing, indicating the probability of obtaining test results at least as extreme as the ones observed during the test, assuming that the null hypothesis is true.