Distinguish Between Misstatements Due to Error and Misstatements Due to Fraud

question 23

Essay

Distinguish between misstatements due to error and misstatements due to fraud and explain the auditor's responsibilities for the detection of both.

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Definitions:

Confidence Interval

A series of values, yielded by sample statistical study, thought to encompass the value of an unrevealed population parameter.

Confidence Intervals

A sequence of values, garnered from samples, anticipated to cover the value of a yet-to-be-discovered population parameter.

Sampling Distribution

The probability distribution of a given statistic based on a random sample.

Central Limit Theorem

A statistical theory that states that the sampling distribution of the sample mean will approach a normal distribution as the sample size becomes larger, regardless of the shape of the population distribution.