For most audits, inherent risk for accounts receivable is usually moderate or low except for the realisable value objective and the cutoff objective.

Question

Quizplus · Accepted Answer

Inherent risk for accounts receivable is generally considered moderate or low because the amounts are usually confirmed by independent parties (the debtors). However, the realisable value objective (the risk that receivables may not be fully collectible) and the cutoff objective (ensuring transactions are recorded in the correct accounting period) can present higher risks due to factors like customer creditworthiness and timing of revenue recognition.

For Most Audits, Inherent Risk for Accounts Receivable Is Usually