To calculate the estimate of the likely misstatement of a total population, the auditor makes a direct projection of the known misstatement from the sample to the population, and subtracts an estimated allowance for sampling risk.

Question

Quizplus · Accepted Answer

The auditor calculates the estimate of the likely misstatement of a total population by making a direct projection of the known misstatement from the sample to the population, but they add an allowance for sampling risk, not subtract it, to account for the uncertainty inherent in sampling.

To Calculate the Estimate of the Likely Misstatement of a Total