Detection risk
Detection Risk (DR) is the risk that the auditor will not detect a misstatement that exists in an assertion that could be material, either individually or when aggregated with other misstatements.[1] In other word chace that the auditor will not find material misstatements relating to an assertion in the Financial statements through substantive test and analysis.[2]
Detection Risk and quality of audit has inverse relationship, if detection risk is high, lower the quality of audit and if detection risk is low, generally higher the quality of audit.
References
- ^ ISA 200 Objectives and General Principles governing audit of Financial Statements.
- ^ http://www.investopedia.com/terms/d/detection-risk.asp