As the ratio of expected misstatements in the population to tolerable misstatements increases, the confidence factors which the auditor should apply decreases.

Question

Quizplus · Accepted Answer

As the ratio of expected misstatements in the population to tolerable misstatements increases, the auditor would typically increase the confidence level (not decrease), meaning they would apply higher confidence factors to ensure a lower risk of material misstatement.

As the Ratio of Expected Misstatements in the Population to Tolerable