Audit misstatement
A misstatement is a difference between a reported financial statement amount, classification, presentation or disclosure and what the applicable reporting framework requires. It can arise from error or fraud and may be factual, judgemental or projected. The auditor accumulates identified misstatements except those clearly trivial and evaluates uncorrected items individually and in aggregate.
Worked example
Management omits a required warranty provision; the auditor estimates the omission and requests that management correct it.
Common mistake
A misstatement can involve a missing or misleading disclosure, not only an incorrect numerical balance.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |