WGU D550
WGU D550 Ethics for Accountants | OA | Objective Assessment | 80
Questions and Answers 2026 Update | 100% Correct.
Gradegurus
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,Question 1
In the Pinto case, Ford relied on which approaches to ethical reasoning to decide
on a course of action with respect to the faulty gas tank placement?
, A) Objectivity and integrity
B) Ethical legalism and utilitarianism
C) Egoism and utilitarianism
D) Enlightened egoism and rights theory
Answer: C
Rationale: Ford used a cost-benefit analysis (utilitarianism) combined with self-
interest (egoism), weighing lives lost against lawsuit costs. They did not prioritize
rights or integrity.
Question 2
Which of the following is a red flag that fraud may exist?
A) Small incremental growth in market share
B) One-time sources of income
C) Consistent external auditors
D) Misstatements that are material but not pervasive
Answer: B
Rationale: One-time or unusual income sources can indicate manipulation.
Consistent auditors (C) are not a red flag. Material misstatements (D) are a finding,
not a red flag.
Question 3
Auditors are responsible to detect and correct errors when they are
A) Larger than inconsequential
B) Material
C) Risky
D) Smaller than inconsequential
, Answer: B
Rationale: Auditors must detect and correct material errors (affect user
decisions). Inconsequential errors (A/D) are ignored. "Risky" (C) is not the
professional standard.
Question 4
Which is an element of the introductory paragraph of an auditor's report under
AICPA standards?
A) Details the auditor's qualifications
B) Summarizes financial performance
C) Outlines audit procedures and outcomes
D) Identifies the entity, financial statements, and time period
Answer: D
Rationale: The introductory paragraph states what was audited (entity,
statements, period). Qualifications (A) are not required; procedures (C) are in the
scope paragraph.
Question 5
Under the Securities Act of 1933, if damages were incurred with a material
misstatement, the CPA will most likely lose the lawsuit unless
A) The CPA ignores the allegations
B) The CPA admits the allegations
C) The CPA rebuts the allegations
D) The CPA settles the allegations
Answer: C
Rationale: The CPA can raise a due diligence defense (rebut the allegations).
Admitting (B) or settling (D) means losing. Ignoring (A) is not a defense.
WGU D550 Ethics for Accountants | OA | Objective Assessment | 80
Questions and Answers 2026 Update | 100% Correct.
Gradegurus
➢
➢
➢
➢
,Question 1
In the Pinto case, Ford relied on which approaches to ethical reasoning to decide
on a course of action with respect to the faulty gas tank placement?
, A) Objectivity and integrity
B) Ethical legalism and utilitarianism
C) Egoism and utilitarianism
D) Enlightened egoism and rights theory
Answer: C
Rationale: Ford used a cost-benefit analysis (utilitarianism) combined with self-
interest (egoism), weighing lives lost against lawsuit costs. They did not prioritize
rights or integrity.
Question 2
Which of the following is a red flag that fraud may exist?
A) Small incremental growth in market share
B) One-time sources of income
C) Consistent external auditors
D) Misstatements that are material but not pervasive
Answer: B
Rationale: One-time or unusual income sources can indicate manipulation.
Consistent auditors (C) are not a red flag. Material misstatements (D) are a finding,
not a red flag.
Question 3
Auditors are responsible to detect and correct errors when they are
A) Larger than inconsequential
B) Material
C) Risky
D) Smaller than inconsequential
, Answer: B
Rationale: Auditors must detect and correct material errors (affect user
decisions). Inconsequential errors (A/D) are ignored. "Risky" (C) is not the
professional standard.
Question 4
Which is an element of the introductory paragraph of an auditor's report under
AICPA standards?
A) Details the auditor's qualifications
B) Summarizes financial performance
C) Outlines audit procedures and outcomes
D) Identifies the entity, financial statements, and time period
Answer: D
Rationale: The introductory paragraph states what was audited (entity,
statements, period). Qualifications (A) are not required; procedures (C) are in the
scope paragraph.
Question 5
Under the Securities Act of 1933, if damages were incurred with a material
misstatement, the CPA will most likely lose the lawsuit unless
A) The CPA ignores the allegations
B) The CPA admits the allegations
C) The CPA rebuts the allegations
D) The CPA settles the allegations
Answer: C
Rationale: The CPA can raise a due diligence defense (rebut the allegations).
Admitting (B) or settling (D) means losing. Ignoring (A) is not a defense.
