If detection risk is set at low, then should I perform more or less substantive testing?
When detection risk is set at low, then that means that risk of material misstatement was assessed to be high. Since detection risk is set at low, that means that the audit team will have to perform a HIGHER amount of substantive testing in order to reduce the risk of not detecting a material misstatement.
The visual below illustrates the inverse relationship between detection risk and the amount of substantive testing that is performed.
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