Okuzeka
Accounting & Tax vocabulary · Auditing & Internal Control

Misstatement

Meaning in accounting & tax, with examples

/ˌmɪsˈsteɪtmənt/nounAdvanced term

In accounting & tax, misstatement means: A difference between an amount shown in the financial statements and the amount that should be shown, caused by error or fraud.

In Turkish: yanlışlık, hatalı beyan

How it is used

Auditors look for material misstatements and ask management to correct them. The verb is misstate, and amounts can be overstated or understated.

Example sentences

  1. The auditors found a misstatement in the timing of year-end revenue.

  2. Uncorrected misstatements are listed in a summary for the audit committee.

Common collocations

  • material misstatement
  • correct a misstatement
  • risk of material misstatement
  • uncorrected misstatements
  • materialityThe idea that an error or omission matters if it is large or important enough to change the decisions of people who read the financial statements.
  • auditAn independent examination of a company's financial statements and records to check that they are accurate and follow the applicable rules.
  • internal controlThe policies and procedures a company uses to protect its assets, prevent errors and fraud, and make sure its financial reporting is reliable.
  • audit opinionThe auditor's formal conclusion, given in the audit report, on whether the financial statements are fairly presented in all material respects.

More terms: Auditing & Internal Control

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level:

This page explains English vocabulary for learners. It is not financial advice.