The risk that an auditor will conclude, based on substantive procedures, that a material error does not exist in an account balance when, in fact, such an error does exist is referred to as:
A)sampling risk.
B)detection risk.
C)nonsampling risk.
D)inherent risk.

Question

Quizplus · Accepted Answer

This is an example of detection risk, which is the risk that the auditor will not detect a material misstatement. This risk can be controlled by increasing the level of substantive procedures and testing performed by the auditor.

The Risk That an Auditor Will Conclude, Based on Substantive