Which of the following terms best describes the risk that audit procedures 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 procedures will fail to detect material misstatements in the financial statements. This risk can be mitigated through a combination of substantive testing and testing controls. If detection risk is deemed to be high, the auditor may need to perform more extensive audit procedures to reduce this risk.

Which of the Following Terms Best Describes the Risk That