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 results the auditor's conclusion that no material errors are present where in fact are.
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
See also
 | This article has not been added to any content categories. Please help out by adding categories to it so that it can be listed with similar articles. (March 2014) |