When the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement the auditor will usually:
A)issue a disclaimer of opinion.
B)throw out the sample.
C)propose adjustments to the client.
D)disclose the misstatement in the client's financial statements.

Question

Quizplus · Accepted Answer

If sample testing reveals a misstatement in excess of the tolerable misstatement, the auditor will propose adjustments to the client. This is done to ensure that the financial statements are corrected and properly reflect the company's financial position. The other options are not appropriate in this scenario. A disclaimer of opinion is issued when the auditor cannot obtain sufficient evidence to form an opinion on the financial statements. Throwing out the sample would not solve the issue and could lead to incomplete and inaccurate financial statements. Disclosing the misstatement in the financial statements without proposing adjustments would not correct the misstatement.

When the Results of Sample Testing Conclude That There Is