If from last year to the current year's audit,inherent risk has stayed constant but control risk is higher (it is more likely that controls do not detect material errors),what is the likely effect on detection risk?
A)Detection risk will increase.
B)Detection risk will decrease.
C)Detection risk will stay the same.
D)Detection risk will need less documentation.

Question

Quizplus · Accepted Answer

When control risk increases (meaning it's more likely that the entity's controls will fail to detect or prevent material misstatements), the auditor will typically decrease detection risk to compensate. This is done by performing more or different audit procedures to ensure that the overall audit risk remains at an acceptable level. Detection risk is inversely related to control risk; as control risk goes up, auditors aim to reduce detection risk to maintain the desired level of overall audit risk.

If from Last Year to the Current Year's Audit,inherent Risk