Question

Acc 450 specific misstatement in one of a client's 2,000 accounts receivable is referred to as a(n):___.

Answer 1

Acc 450 specific misstatement in one of a client's 2,000 accounts receivable is referred to as a(n) known misstatement.

There are two categories of errors: known and likely. The amount of specifically determined misstatements is what Section 312A.35 refers to as known misstatements.

For instance, it would be a known untruth if an unpaid invoice for items purchased or services supplied prior to the end of the period given was not recorded.

According to Section 312A.35, "the auditor's best assessment of the overall misstatements in the account balances or classes of transactions" is what is meant by "likely misstatements." When an auditor uses analytical or sampling techniques, probable misstatements may be found.

For instance, if an auditor applies sampling methodologies to a certain class of transactions and finds a known misstatement in the items examined, the auditor will project the known difference found in the samples to find the likely misstatement.

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