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Tolerable error vs materiality

1.Both are same? 2. I had another doubt if I took sample size more becse materiality level is low fr eg out of 1000 transaction I took 800 transaction , in 800 transaction no misstatements and there is balnce 200 icant check may be there is misstatement My doubt is, I fix materiality level is 300000 this 300000 I hve to check in sample size 800 no misstatements no problem ,, this 300000(material ity level) I hve to check remaining 200 transaction also rght sir I clubbed 200 transaction that amount exceed my materiality level i.e300000 but I don't know there was miststament exist or not now wht to do .....????


Nivetharaman Raman

Nivetharaman Raman

CA Foundation

9K+

04-Jan-21 06:28

24

Answers (3)

Materiality is different from tolerable error. the result of sample has to be projected onto the population and conclusion must be derived. Auditor will not check 100% of transactions.


Suraj Lakhotia

Suraj Lakhotia

Admin

04-Jan-21 15:33

Materiality is different from tolerable error. the result of sample has to be projected onto the population and conclusion must be derived. Auditor will not check 100% of transactions.

result of sample has to be projected onto the population and conclusion must be derived. Auditor will not check 100% of transactions. Plse explain this I can't understand


Nivetharaman Raman

Nivetharaman Raman

CA Foundation

9K+

04-Jan-21 22:08

result of sample has to be projected onto the population and conclusion must be derived. Auditor will not check 100% of transactions. Plse explain this I can't understand

Auditor does not check all transaction. He checks on sample basis. The result of sample are projected on to the population. This means that the population will be evaluated based on results of sample.


Suraj Lakhotia

Suraj Lakhotia

Admin

07-Jan-21 19:26