As the risk of material misstatement increases, what happens with detection risk?
A) Medium increase.
B) Stay the same.
C) Decrease.
D) Severely increase.

Question

Quizplus · Accepted Answer

As the risk of material misstatement increases, detection risk needs to decrease in order to maintain an acceptable level of overall audit risk. This means that auditors need to perform more substantive procedures to reduce the risk of material misstatements going undetected.

As the Risk of Material Misstatement Increases, What Happens with Detection