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What is tolerable error?
Replies (4)
In what context are you asking about? Please clarify
In context of size of sample... it says size of sample is inversely proportional to tolerable error...
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.
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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