Unformatted text preview: Planned Detection Risk – the risk that audit evidence of a segment will fail to detect misstatements exceeding tolerable misstatement. The lower the PDR the MORE evidence the auditor must gather. Acceptable Audit Risk (Level of Assurance) – how willing the auditor is to accept that the financial statements may be materially misstated and an unqualified opinion is issued. Zero risk is certainty 100 percent is complete uncertainty. See table 9-3 on PG 263 for Methods used to assess AAR....
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- error Likely Misstatements, Diff btwn auditor