What is detection risk?
Detection risk is the risk that the auditor will not detect a material misstatement that exists in a relevant assertion. Unlike inherent and control risks, detection risk is will not exist independently of the audit.
Therefore, the assessed level of detection risk (amount of work the auditor will need to do) will be determined based on the assessed level of inherent and control risk. Detection risk is the only risk that the audit team has control over.
Back To All Questions