The risk that an auditor's procedures will lead to the conclusion that a material misstatement does not exist in an account balance when,in fact,such misstatement actually does exist is ________.
A)audit risk
B)inherent risk
C)control risk
D)detection risk

Question

Quizplus · Accepted Answer

Detection risk refers to the risk that the auditor's procedures will not detect a material misstatement, which includes the risk of concluding that no misstatement exists when one does. This risk can be controlled by adjusting the auditor's procedures, such as increasing the sample size or performing additional testing. Audit risk is the overall risk of the auditor issuing an incorrect opinion, and it is affected by inherent risk (the susceptibility of an account balance to a material misstatement) and control risk (the risk that a misstatement could occur and not be detected by the entity's internal controls).

The Risk That an Auditor's Procedures Will Lead to the Conclusion