Stacey, the partner in charge of the audit of GHER Corporation, calculates that detection risk to be 5.7% for the audit of accounts payable. GHER Corporation and RIF Enterprises are in the same industry, close to the same size, and have similar balances in accounts payable. What do the different detection risks tell you about the planned audit evidence that will be gathered for the GHER Corporation audit?
What will be an ideal response?
Since the detection risk for GHER Corporation is lower than the detection risk for RIF Enterprises, the auditor will plan on more audit evidence to be gathered.
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