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Detection Risk

The risk that the procedures performed by the auditor will not detect a misstatement that exists and could be material.

Related terms

  • Debt Service Coverage Ratio (DSCR)

    A ratio measuring a company's ability to service its debt obligations from operating cash flow — frequently a loan covenant a lender monitors.

  • Debtors Confirmation

    A direct request to a customer to confirm their outstanding balance, used as external evidence for receivables.

  • Director's Responsibility Statement

    A statement included in the Board's Report under Section 134, in which the directors affirm their responsibility for the financial statements, internal financial controls, and compliance with applicable laws.

  • Disclaimer of Opinion

    Issued when the auditor is unable to obtain sufficient appropriate evidence and the possible effects could be both material and pervasive — the auditor does not express an opinion at all.

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231 terms in total, or go deeper with working procedures and worked examples in the resource library.

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