Audit Chapter 4
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4 terms
Terms | Definitions |
|---|---|
 Detection risk | The level of risk the auditor is willing to take that the audit procedures will fail to find material errors that were not detected and/or corrected by a system of internal control. DR determines the evidence accumulation. If DR is low,then audit evidence required is considerable.If DR is high,then less evidence is needed. Statistical Sampling is used to determine the amount of audit evidence given a value of detection risk. |
| If risk of material misstatement is higher than originally anticipated, the auditor may respond by | Increasing supervision. |
| A known misstatement | Example: A misstatement found by the auditor that is due to incorrect pricing on a sales invoice. |
| If acceptable audit risk is set at low and the assessed risk of material misstatement is high, then detection risk must be | low |
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