What impact will there be on sample size for substantive testing when there is an increase in the tolerable misstatement?
A) decrease
B) negligible
C) increase
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 allows for a decrease in the sample size for substantive testing, as less evidence is needed to conclude that the financial statements are free of material misstatement.

What Impact Will There Be on Sample Size for Substantive