# Detection risk

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**Detection Risk (DR)** is the risk that the [auditor](/source/Auditor) will not detect a misstatement that exists in an assertion that could be [material](/source/Materiality_(auditing)), either individually or when aggregated with other misstatements.[1] In other words, the chance that the auditor will not find material misstatements relating to an [assertion](/source/Management_assertions) in the financial statements through [substantive test](/source/Audit_substantive_test) and analysis.[2] Detection risk results in the auditor's conclusion that no material errors are present where in fact there are. It is a component of [audit risk](/source/Audit_risk).

Detection Risk and quality of audit have an [inverse relationship](/source/Inverse_relationship): if detection risk is too high, the lower the quality of the audit and if detection risk is low, generally the quality of the audit increases.

## References

1. ISA 200 Objectives and General Principles governing audit of Financial Statements.

1. Investopedia Staff (14 August 2010). ["Detection Risk"](http://www.investopedia.com/terms/d/detection-risk.asp). Retrieved 14 November 2017.

## See also

- [Audit risk](/source/Audit_risk)
- [Sampling error](/source/Sampling_error)
- [Non-sampling error](/source/Non-sampling_error)

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