Planned detection risk I.determines the amount of substantive evidence the auditor plans to accumulate.
II)is dependent on inherent risk and business risk.
A)I only
B)II only
C)I and II
D)None of the above

Question

Quizplus · Accepted Answer

Planned detection risk only determines the amount of substantive evidence the auditor plans to accumulate. Inherent risk and business risk are used to determine the overall risk of material misstatement, which then helps the auditor determine their planned detection risk. Therefore, statement II is not entirely correct as it implies that planned detection risk is solely dependent on inherent risk and business risk.

Planned Detection Risk I