The risk that audit evidence for a segment will fail to detect misstatements exceeding performance materiality levels is:
A)audit risk.
B)control risk.
C)inherent risk.
D)planned detection risk.

Question

Quizplus · Accepted Answer

The risk that audit evidence for a segment will fail to detect misstatements exceeding performance materiality levels is related to planned detection risk. This is because planned detection risk is the risk that the auditor is willing to accept that audit evidence for a segment will fail to detect misstatements exceeding performance materiality levels. The auditor determines planned detection risk by considering the other components of audit risk (inherent risk, control risk, and detection risk). If inherent and control risks are high, the auditor will need to set a lower planned detection risk to compensate.

The Risk That Audit Evidence for a Segment Will Fail