[Anonymous]

So When you see the term detection risk should it be read as “allowable” detection risk?

for example if a question says you increase Detection risk:

is it saying you are increasing the “allowable” risk that misstatements will go undetected? (leading to less substantive testing)

or

that you are increasing the risk that misstatements will go undetected (leading to increased substantive testing)

[Gusher_hi]

Detection risk means the level of risk that an auditor must accept or allow given the assessment of inherent and control risk.

E.g. if a question says you can increase detection risk, that means you can accept more risk that material misstatements will go undetected.

[thelonewolf527]

I believe “Detection Risk” and “Allowable Detection Risk” are exactly the same thing

It's just a way that the CPA Exam likes to word things in a confusing way to blatantly trick you

AUD - 08/04/14 - 83
FAR - 11/29/14 - 80
REG - 02/26/15 - 89
BEC - 05/30/15 - 86

DONE!

[Anonymous]

I concur; detection risk = allowable detection risk

Therefore, when detection risk increases, substantive tests decrease

I had the same problem/revelation when I was studying audit

[Author]

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