To maximise audit efficiency, the auditor should allocate less tolerable error to accounts that can be verified by using low-cost audit procedures, such as analytical procedures, than to accounts that are more costly to audit.

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Allocating less tolerable error to accounts that can be verified using low-cost audit procedures will help the auditor to efficiently manage resources and reduce the overall audit cost. This approach is consistent with the risk-based audit approach, where audit resources are directed towards high-risk areas. Accounts that are more costly to audit may require more extensive audit procedures and should be allocated a higher tolerable error threshold.

To Maximise Audit Efficiency, the Auditor Should Allocate Less Tolerable