Detection risk is the risk that the auditor will not detect material misstatements in the accounts. To limit detection risk to an acceptable level, the auditor ________.
A) performs substantive tests
B) tests controls
C) gains an understanding of the internal control system
D) applies statistical methods

Question

Quizplus · Accepted Answer

Performing substantive tests is a direct method for auditors to detect material misstatements, thereby limiting detection risk to an acceptable level.

Detection Risk Is the Risk That the Auditor Will Not