Inherent risk is reduced where the likelihood of misstatement is low.This would be true for accounts receivable if most balances in accounts receivable were:
A) from related parties.
B) overdue.
C) from overseas customers.
D) current.

Question

Quizplus · Accepted Answer

If most balances in accounts receivable were current, the likelihood of misstatement would be low because current balances are less likely to result in disputes or errors. Overdue balances and balances from related parties or overseas customers could increase the risk of misstatement, so those would not be good choices.

Inherent Risk Is Reduced Where the Likelihood of Misstatement Is