Detection risk is:
A) the possibility that a misstatement will be missed when audit steps are performed.
B) the possibility that accounts receivable will be uncollected.
C) the possibility that inventory will not be sold.
D) Both b and c

Question

Quizplus · Accepted Answer

Detection risk refers to the risk that auditors will not be able to detect material misstatements in the financial statements. It is different from inherent risk (risk that exists in a company's operations or industry) and control risk (risk that internal controls fail to prevent or detect misstatements). Option B and C are related to other types of risks.

Detection Risk Is