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James and Elizabeth are discussing misstatements one day during lunch at an audit client's office. James tells Elizabeth that he spent the morning learning about tolerable misstatements as part of audit samples. Elizabeth is intrigued and asks James to explain exactly what this means. Which of the following responses by James would be MOST appropriate? James should advise Elizabeth that tolerable misstatement refers to the level of misstatement the auditor can accept before modifying his or her opinion that the population is presented fairly. O James should explain to Elizabeth that tolerable misstatement refers to the level of assurance deviation the auditor can tolerate before modifying his or her opinion. O James should advise Elizabeth that tolerable misstatement refers to the level of audit risk the auditor can accept before modifying control risk. None of the choices is correct.

James and Elizabeth are discussing misstatements one day during lunch at an audit client's office. James tells Elizabeth that he spent the morning learning about tolerable misstatements as part of audit samples. Elizabeth is intrigued and asks james to explain exactly what this means. Which of the following responses by James would be MOST appropriate? James should advise Elizabeth that tolerable misstatement refers to the level of misstatement the auditor can accept before modifying his or her opinion that the population is presented fairly. James should explain to Elizabeth that tolerable misstatement refers to the level of assurance deviation the auditor can tolerate before modifying his or her opinion. James should advise Elizabeth that tolerable misstatementrefers to the level of audit risk the auditor can accept before. modifying control risk. None of the choices is correct

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