The auditor makes the decision about whether the misstatements found in a substantive test of balances sample are material after
A)determining if the misstatements are within the tolerance level
B)determining if the misstatements are within the assurance level
C)extrapolating misstatements from the sample to the population
D)projecting misstatements from the sample to the population
E)extrapolating misstatements from the population to the sample

Question

Quizplus · Accepted Answer

The auditor determines whether the misstatements found in a substantive test of balances sample are material by extrapolating misstatements from the sample to the population. This is because the sample is only a representation of the population, and the auditor needs to determine the overall impact of the misstatements on the financial statements. The other options (A, B, D, E) do not accurately describe the process of materiality determination.

The Auditor Makes the Decision About Whether the Misstatements Found