PA D251, WGU - D251
ADVANCED AUDITING,
UNIT 6 - D251
ADVANCED AUDITING
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,Certainly! Here are all the questions numbered with their respective answers:
1. What is materiality level that an auditor uses for determining significant accounts,
significant locations, and audit procedures for those accounts and locations?
**b. Overall Materiality**
2. An auditor has determined performance materiality has been set too high at the
beginning of the audit. Which procedures should this auditor consider to detect
misstatements?
**a. The auditor should perform additional substantive audit procedures**
3. Which risk exists at the overall financial statement level and at the assertion level and can
be categorized as involving inherent risk and control risk?
**d. Risk of material misstatement**
4. What represents an identified and assessed risk of material misstatement that requires
special audit consideration?
**b. Significant risk**
5. What is the impact on the amount of acceptable audit risk if an auditor believes the
chance of financial failure of a client is high?
**b. The acceptable audit risk is reduced**
6. Which factor should lead an auditor to assess inherent risk as high?
**b. The account balance consists of a large number of complex transactions**
7. Which factor would lead an auditor to assess client business risk at a higher level?
**c. The client's use of information technology is incompatible across systems and
processes**
, 8. An auditor determines overall materiality of $500,000 would be material to the income
statement and $1,000,000 would be material to the balance sheet. Which amount would an
auditor typically assess performance materiality to be for this client?
**c. 75% of $500,000**
9. At which percentage do auditors commonly set posting materiality?
**a. 5% of planning materiality**
10. What is quantitative evaluation?
**d. Determining whether the upper limit of the possible deviation rate exceeds the
tolerable deviation rate**
11. In which circumstance would an auditor change an audit objective to estimating the
correct value?
**a. When the total estimated misstatement exceeds the tolerable misstatement**
12. What describes tainting percentage?
**d. The percentage of misstatement present in a logical unit**
13. Which statement reflects a 5% risk of overreliance?
**a. 95% confidence level that the actual rate of deviation will not exceed the tolerable
deviation**
14. What is the objective of sampling when testing controls?
**a. To determine whether controls are operating effectively**
15. What is the primary objective of monetary unit sampling?
**d. To identify overstatement errors**
ADVANCED AUDITING,
UNIT 6 - D251
ADVANCED AUDITING
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,Certainly! Here are all the questions numbered with their respective answers:
1. What is materiality level that an auditor uses for determining significant accounts,
significant locations, and audit procedures for those accounts and locations?
**b. Overall Materiality**
2. An auditor has determined performance materiality has been set too high at the
beginning of the audit. Which procedures should this auditor consider to detect
misstatements?
**a. The auditor should perform additional substantive audit procedures**
3. Which risk exists at the overall financial statement level and at the assertion level and can
be categorized as involving inherent risk and control risk?
**d. Risk of material misstatement**
4. What represents an identified and assessed risk of material misstatement that requires
special audit consideration?
**b. Significant risk**
5. What is the impact on the amount of acceptable audit risk if an auditor believes the
chance of financial failure of a client is high?
**b. The acceptable audit risk is reduced**
6. Which factor should lead an auditor to assess inherent risk as high?
**b. The account balance consists of a large number of complex transactions**
7. Which factor would lead an auditor to assess client business risk at a higher level?
**c. The client's use of information technology is incompatible across systems and
processes**
, 8. An auditor determines overall materiality of $500,000 would be material to the income
statement and $1,000,000 would be material to the balance sheet. Which amount would an
auditor typically assess performance materiality to be for this client?
**c. 75% of $500,000**
9. At which percentage do auditors commonly set posting materiality?
**a. 5% of planning materiality**
10. What is quantitative evaluation?
**d. Determining whether the upper limit of the possible deviation rate exceeds the
tolerable deviation rate**
11. In which circumstance would an auditor change an audit objective to estimating the
correct value?
**a. When the total estimated misstatement exceeds the tolerable misstatement**
12. What describes tainting percentage?
**d. The percentage of misstatement present in a logical unit**
13. Which statement reflects a 5% risk of overreliance?
**a. 95% confidence level that the actual rate of deviation will not exceed the tolerable
deviation**
14. What is the objective of sampling when testing controls?
**a. To determine whether controls are operating effectively**
15. What is the primary objective of monetary unit sampling?
**d. To identify overstatement errors**
