D is corrent because detection risk is the risk that the auditor will not detect a material misstatement that exists in an assertion.
A is incorrect because nonsampling risk includes only those aspects of audit risk that are not due to sampling.
B is incorrect because inherent risk is the susceptibility of an assertion to a material misstatement, assuming that there are no related controls.
C is incorrect because sampling risk arises from the possibility that, when a test of controls or a substantive test is restricted to a sample, the auditor’s conclusions may be different from the conclusions he or she would reach if the procedures were applied in the same way to all items in the account balance or class of transactions.
|
