Misstatement or deviation 4 / 4

Tolerable misstatement looks at individually immaterial misstatements added together

The smaller the tolerable misstatement or rate of deviation, the greater the required sample size

Expected misstatement or rate of deviation

The higher the expected misstatement or rate of deviation, the greater the required sample size.

Performing audit procedures on the sample

  • If the auditor cannot use the procedure - then this is a misstatement/deviation

  • Investigate the nature and cause of any misstatements/deviations

  • Evaluate their effect

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