The risk that the auditors' procedures will lead them to conclude that a material misstatement does not exist in an account balance when in fact such a misstatement does exist is referred to as:
A)Account risk.
B)Control risk.
C)Detection risk.
D)Inherent risk.

Question

Quizplus · Accepted Answer

Detection risk refers to the possibility of auditors failing to detect material misstatements even if they exist. It is one of the three components of audit risk along with inherent risk and control risk.

The Risk That the Auditors' Procedures Will Lead Them to Conclude