Detection Risk Is the Risk That the Auditor Will Not

question 12

Multiple Choice

Detection risk is the risk that the auditor will not detect material misstatements in the accounts.To limit detection risk to an acceptable level, the auditor

• A)Performs substantive tests.
• B)Tests controls.
• C)Gains an understanding of the internal control system.
• D)Applies statistical methods.

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Definitions:

Correlational

Referring to a type of research design that examines the relationship between two or more variables to determine if they are associated in some way.

Longitudinal Research

A research design that involves repeated observations of the same variables over a period of time, extending from months to years.

Cross-Sectional

This observational study method examines data collected from a whole population or a selected portion of it at one specific time.

Basic

Basic commonly refers to something that forms an essential foundation or starting point; fundamental.