Errors in audit procedures primarily impact which type of risk?

The correct answer is detection risk because this type of risk reflects the possibility that auditors will not find material misstatements in the financial statements during their audit procedures. If errors occur in the audit procedures themselves, it directly affects the auditor's ability to detect problems, leading to a higher detection risk.

Detection risk is a critical component of the audit risk model, which includes inherent risk and control risk. Inherent risk relates to the susceptibility of an assertion to a misstatement, without taking into account any related controls. Control risk, on the other hand, refers to the risk that a misstatement could occur and will not be prevented or detected on a timely basis by the internal controls in place. Business risk refers to the overall risks that an organization faces, which could impact its ability to achieve its objectives but is not directly tied to audit procedures.

By focusing on detection risk, it is clear that errors specifically in audit procedures compromise the auditors’ ability to identify inaccuracies, thus amplifying the potential consequences of mishandled financial reporting.