Detection risk is
A)the susceptibility of management assertions in an accounting business process to a material misstatement assuming no internal controls
B)the risk that internal controls fail to prevent or detect misstatements in the financial statements
C)the risk that substantive audit procedures fail to detect misstatements in the financial statements
D)the risk of assuming a clean opinion when the financial statements are materially incorrect

Question

Quizplus · Accepted Answer

Detection risk is the risk that substantive audit procedures fail to detect a material misstatement in the financial statements. Option A is referring to inherent risk, Option B is referring to control risk, and Option D is referring to the risk of issuing an incorrect opinion.

Detection Risk Is