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Audit

Asma ali (Student) (39 Points)

15 July 2016

What is tolerable error?

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4 Replies

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 15 July 2016

In what context are you asking about? Please clarify

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Asma ali (Student) (39 Points)
Replied 19 July 2016

In context of size of sample... it says size of sample is inversely proportional to tolerable error...

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 19 July 2016

Tolerable error is the maximum monetary error in an amount that would be accepted that would still allow the auditor to conclude that the accounts are not materially misstated.

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Varun Joshi (6 Points)
Replied 19 July 2016

Simply speaking, tolerable errors means "misstatements ko naa pakadne ka khatra". if sample size is high then the risk would be low and vice versa ( hence inversely proportional)

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