Respected Sir/Madam

Can you please help me out to know the meaning and difference between tolerable misstatement and tolerable rate of deviation and pervasive and persuasive meaning and it's difference in simple terms

Harsha Vardhan

Harsha Vardhan

CA Inter


28-Jul-20 22:17


Answers (2)

A tolerable misstatement is the amount by which a financial statement line item can differ from its true amount without impacting the fair presentation of the entire financial statements. The tolerable deviation rate is the largest percentage variance experienced in audit sampling that an auditor will accept in order to rely upon a specific control. If the deviation rate is higher than this threshold value, then the auditor cannot rely upon the control. If auditor believes the financial statements should not be relied upon at all for making decisions then the matter is pervasive (pervasive means in english spreading, so the effect of misstatements has spread to the whole of financial statements). Persuasive audit evidence will be those evidence which are good at persuading someone to do or believe something through reasoning (not 100% factual belief).

sudha reddy

sudha reddy


29-Jul-20 10:58

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