Final answer:
The auditor designs audit procedures to detect material misstatements in financial statements, using techniques like substantive testing and risk assessment to ensure the accuracy.
Step-by-step explanation:
To detect material misstatements in a class of transactions, account balance, and disclosure component of the financial statements, the auditor designs audit procedures.
These procedures are tailored to identify potential errors or fraud that could have a significant impact on the financial statements. Auditors use various techniques, including substantive testing, risk assessment, and analytical procedures.
The goal is to ensure that the financial statements as a whole are free from material misstatement, whether due to fraud or error, ensuring that they present a true and fair view of the financial position of the entity.