The Acceptable Level of Detection Risk is Inversely Related to the Assurance Required from Substantive Procedures

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Detection risk is the chance that an auditor will fail to find material misstatements that exist in an entity’s financial statements. These misstatements may be due to either fraud or error. Detection risk may result in an auditor giving an inappropriate opinion, such as a clean/unmodified opinion on materially misstated financial statements. Detection risk is … Read more