Inherent risk for accounts receivable is normally assessed at the objective level rather than at the account level.

Question

Quizplus · Accepted Answer

Inherent risk for accounts receivable is generally assessed at the objective level because it is often affected by factors that are outside of the company's control, such as economic conditions, customer creditworthiness, and industry trends. Assessing the risk at the account level may not provide an accurate picture of the overall risk of the accounts receivable balance.

Inherent Risk for Accounts Receivable Is Normally Assessed at the Objective