What is a tolerable misstatement?
Tolerable misstatement is the application of the maximum amount of accepted (tolerable) errors within a given test sample. The goal of the audit test should be for the tolerable misstatement to be less than the materiality level of the financial statements as a whole.
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What is a rubber check?
What does rubber do? It bounces. A rubber check is a check that bounces. When a check bounces, it means that the person that wrote the check doesn’t have enough funds in their account. For example, if you wrote a check for $100, but only had $90 in your checking account, the check would bounce.
What is boot strapping?
Boot strapping is most commonly associated with a start-up company. It basically means that the founders had to use their own cash or personal credit cards to finance the early days of the company. The alternative to boot strapping is to obtain funding from external investors. The reason a company’s founders would choose to bootstrap […]
What is “tone at the top”?
Tone at the top is another phrase for the control environment, which is one of the key components of the COSO internal control framework. The phrase “tone at the top” basically helps define or assess management’s leadership and commitment to creating a culture in the organization that is focused on honesty, integrity, and ethical behavior. […]