What impact will there be on sample size for substantive testing when there is an increase in the tolerable misstatement?
A)negligible
B)increase
C)decrease
D)none of the above

Question

Quizplus · Accepted Answer

When there is an increase in the tolerable misstatement, the auditor can accept a higher level of risk that the financial statements may be materially misstated. This means that fewer items need to be tested to reach a conclusion, leading to a decrease in the sample size for substantive testing.

What Impact Will There Be on Sample Size for Substantive