Planned detection risk

Planned detection risk is the risk that audit evidence will fail to detect misstatements that exceed a tolerable amount. When an auditor reduces the planned detection risk, this will require the collection of more evidence. Conversely, if the auditor increases the planned risk, this will require less evidence.

An increase in planned detection risk may be caused by an increase in acceptable audit risk or a decrease in control risk or inherent risk.

Related Courses

Guide to Audit Sampling
How to Conduct an Audit Engagement