The risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable misstatement is:
A) Audit risk.
B) Control risk.
C) Inherent risk.
D) Planned detection risk.

Question

Quizplus · Accepted Answer

Planned detection risk represents the risk that audit evidence for a segment will fail to detect material misstatements, which exceed a tolerable amount. In other words, it is the risk that auditors won't be able to find material misstatements during their audit procedures. The other risks listed (audit risk, control risk, and inherent risk) are not directly related to the risk of failing to detect misstatements during the audit.

The Risk That Audit Evidence for a Segment Will Fail