Misstatement
A difference between a reported figure and the figure that correct application of the methodology would produce.
A misstatement is not necessarily fraud. It is a discrepancy: the reported number differs from what the rules, applied honestly, would yield. Causes include data error, methodological misapplication, boundary mistakes and unsupported assumptions.
Verifiers aggregate misstatements and compare the total with the materiality threshold. Individual small errors may be summed if they share a cause, and a pattern of errors in one direction is treated as evidence of bias rather than noise.
Correcting a misstatement is usually straightforward once quantified. The harder cases are unquantified ones, where evidence is missing and the verifier can only judge whether the remaining risk is acceptable.
Frequently asked questions
Is every misstatement reported publicly?
Not necessarily. Material ones affect the verification opinion; immaterial ones are recorded in the internal schedule.
Can misstatements cancel out?
Only if they are genuinely independent. Systematic errors in one direction do not cancel; they compound.