Which of the following terms best describes the risk that audit evidence will fail to detect misstatements exceeding tolerable misstatement?
A)Audit risk.
B)Control risk.
C)Detection risk.
D)Inherent risk.

Question

Quizplus · Accepted Answer

Detection risk is the risk that audit evidence will fail to detect material misstatements in the financial statements. It is one of the three components of audit risk along with inherent risk and control risk. Tolerable misstatement is the maximum amount or level of misstatement that the auditor is willing to accept in the financial statements.

Which of the Following Terms Best Describes the Risk That