In PPS sampling plans, tolerable misstatement: A) is stated as a percentage. B) has an inverse effect on sample size. C) is equal to materiality at the financial statement level. D) is normally set at zero. E) is the minimum misstatement that can exist in an account before it is considered to be materially misstated.

Question

Quizplus · Accepted Answer

Tolerable misstatement has an inverse effect on sample size because as the tolerable misstatement increases, the sample size decreases, and vice versa.

In PPS Sampling Plans, Tolerable Misstatement