When Discussing Planned Detection Risk (PDR) and the Audit Risk

question 85

Multiple Choice

When discussing planned detection risk (PDR) and the audit risk model, which of the following statements is NOT true?

• A) PDR determines the amount of evidence the auditor plans to accumulate, inversely with the size of planned detection risk.
• B) When PDR is changed from low to medium, the required accumulation of evidence would be increased.
• C) PDR is a measure of the risk that the auditor will not detect a misstatement in an assertion that could be material.
• D) PDR is dependent on the other three factors in the model; i.e., it will change only if another changes.

---

Definitions:

Coefficient of Correlation

A statistic that measures the degree to which two variables are linearly related, with values ranging from -1 to 1.

Dependent Variable

The variable in an experiment that is expected to change in response to manipulations of the independent variable.

Independent Variable

A variable in research that is manipulated or categorized to observe its effect on a dependent variable.

First Quartile

The value below which 25% of the data falls.