Inherent Risk Is Reduced Where the Likelihood of Misstatement Is

question 21

Multiple Choice

Inherent risk is reduced where the likelihood of misstatement is low. This would be true for accounts receivable if:

• A) most balances in accounts receivable were from overseas customers.
• B) most balances in accounts receivable were from related parties.
• C) most balances in accounts receivable were overdue.
• D) most balances in accounts receivable were current.

---

Definitions:

Neural Communication

The process by which neurons transmit information through electrical and chemical signals across synapses.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight-or-flight response, increasing heart rate, and mobilizing energy in stressful situations.

Parasympathetic Nervous System

Part of the autonomic nervous system responsible for reducing bodily arousal and facilitating digestion, often described as the "rest and digest" system.

Endocrine Glands

Organs that secrete hormones directly into the bloodstream to regulate various body processes.