Which of the following situations will result in the auditors concluding that the risk of material...
Which of the following situations will result in the auditors concluding that the risk of material misstatement is too high when using non-statistical sampling for substantive tests?
The projected misstatement exceeds the tolerable misstatement.
The allowance for sampling risk exceeds the projected misstatement.
The risk of incorrect acceptance exceeds the risk of incorrect rejection.
The tolerable misstatement exceeds the sample net misstatement.
Homework Answers
Ans : A (The Projected misstatement exceeds the tolerable misstatement )
Explanation
Their is an unacceptably high risk that the actual misstatements in the population exceed the tolerable misstatement because the total projected misstatements is more than the tolerable misstatement.
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The incremental allowance for sampling risk.
The upper misstatement limit.
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