WGU D550 OBJECTIVE ASSESSMENT FINAL NEWEST
2026 ACTUAL EXAM TEST BANK| D550 ETHICS FOR
ACCOUNTANTS OA FINAL REVIEW WITH
COMPLETE 250 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
Which bias involves a tendency to believe past outcomes were expected
or known before they occurred? - ANSWER - hindsight bias
Which bias involves a belief that theories about the world also suggest
that we tend to blame individuals for events, rather than their work
environment, policies and procedures, or incentive programs? -
ANSWER - attribution bias
The difference between occupational and financial statement fraud is -
ANSWER - occupational fraud is generally committed by employees.
The relationship between the shareholders, directors, and management
of a company, as defined by the corporate charter, bylaws, formal policy,
and rule of law is known as - ANSWER - corporate governance.
The level of care expected of a reasonable person under similar
circumstances in meeting one's fiduciary duty is called - ANSWER -
duty of care.
What is the main fiduciary duty of the board of directors? - ANSWER -
safeguard the interests of the corporation and its shareholders
pg. 1
,The KPMG Professional Judgment Framework defines judgment as -
ANSWER - the process of reaching a decision or drawing a conclusion
where there are a number of possible alternative solutions.
Professional skepticism can best be defined as having - ANSWER - an
inquiring mind and suspension of belief.
To prevent subordination of judgment, a CPA should evaluate threats to -
ANSWER - Objectivity and Integrity.
The tendency for decision-makers to put more weight on information
that is consistent with their initial beliefs or preferences is called the -
ANSWER - confirmation tendency.
The most significant change in the Revised AICPA Code of Professional
Conduct is - ANSWER - the creation of two conceptual frameworks: one
for members in public practice and one for members in business.
A threat to replace a CPA or CPA firm because of a disagreement with
the client over the application of an accounting principle is - ANSWER -
undue influence threat.
A CPA can accept a contingent fee in providing tax services for an attest
client if - ANSWER - the CPA's tax services will be reviewed by a
taxing authority.
The first step for an auditor who concludes an illegal act exists is to -
ANSWER - assess the impact of the illegal act on the financial
statements.
pg. 2
,What is enterprise risk management (ERM)? - ANSWER - a process,
effected by an entity's board of directors, management, and other
personnel designed to identify potential events that may affect the entity
and to manage risk within its risk appetite
One difference between the AICPA auditor's report and that of the
PCAOB is - ANSWER - the PCAOB report includes a separate section
on Critical Audit Matters.
Who linked earnings management to an excessive zeal to project
smoother earnings from year to year that casts a pall over the quality of
the underlying numbers? - ANSWER - Arthur Levitt
The main difference between a discretionary and nondiscretionary
accrual is - ANSWER - discretionary accruals are items that
management has full control over.
Accruals that are based on estimated changes in fundamental economic
performance of the firm are - ANSWER - nondiscretionary accruals.
In the Bruns and Merchant survey of managers, which technique to
manage earnings was considered most acceptable? - ANSWER -
manipulating operating decisions
What is the SEC's position on companies that communicate with
investors on social media? - ANSWER - It is legal so long as companies
inform investors which outlets they intend to use.
pg. 3
, One result of earnings management is - ANSWER - it brings into
question the quality of earnings.
The SEC requires stealth restatements to be - ANSWER - disclosed only
in an 8-K report or amended 10-K/A or 10-Q/A.
In the 2019 Audit Analytics report, what was the most common reason
cited for financial restatements? - ANSWER - revenue recognition
In the Hertz fraud, the company tried to explain its use of non-GAAP
financial measures by - ANSWER - comparing the validity of the
amounts to pre-tax GAAP income.
Earnings management is likely to decrease when corporate governance
systems - ANSWER - set an ethical tone at the top.
The legal precedent that evolves from legal opinions issued by judges in
deciding a case and guides judges in deciding similar cases in the future
is referred to as - ANSWER - common law.
The key element that protects an auditor against common law liability is
- ANSWER - adherence to generally accepted auditing standards
(GAAS).
In the United States, if the auditor can demonstrate having performed
services with the same degree of skill and judgment possessed by others
in the profession, they can be said to have exercised - ANSWER - due
care.
pg. 4
2026 ACTUAL EXAM TEST BANK| D550 ETHICS FOR
ACCOUNTANTS OA FINAL REVIEW WITH
COMPLETE 250 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
Which bias involves a tendency to believe past outcomes were expected
or known before they occurred? - ANSWER - hindsight bias
Which bias involves a belief that theories about the world also suggest
that we tend to blame individuals for events, rather than their work
environment, policies and procedures, or incentive programs? -
ANSWER - attribution bias
The difference between occupational and financial statement fraud is -
ANSWER - occupational fraud is generally committed by employees.
The relationship between the shareholders, directors, and management
of a company, as defined by the corporate charter, bylaws, formal policy,
and rule of law is known as - ANSWER - corporate governance.
The level of care expected of a reasonable person under similar
circumstances in meeting one's fiduciary duty is called - ANSWER -
duty of care.
What is the main fiduciary duty of the board of directors? - ANSWER -
safeguard the interests of the corporation and its shareholders
pg. 1
,The KPMG Professional Judgment Framework defines judgment as -
ANSWER - the process of reaching a decision or drawing a conclusion
where there are a number of possible alternative solutions.
Professional skepticism can best be defined as having - ANSWER - an
inquiring mind and suspension of belief.
To prevent subordination of judgment, a CPA should evaluate threats to -
ANSWER - Objectivity and Integrity.
The tendency for decision-makers to put more weight on information
that is consistent with their initial beliefs or preferences is called the -
ANSWER - confirmation tendency.
The most significant change in the Revised AICPA Code of Professional
Conduct is - ANSWER - the creation of two conceptual frameworks: one
for members in public practice and one for members in business.
A threat to replace a CPA or CPA firm because of a disagreement with
the client over the application of an accounting principle is - ANSWER -
undue influence threat.
A CPA can accept a contingent fee in providing tax services for an attest
client if - ANSWER - the CPA's tax services will be reviewed by a
taxing authority.
The first step for an auditor who concludes an illegal act exists is to -
ANSWER - assess the impact of the illegal act on the financial
statements.
pg. 2
,What is enterprise risk management (ERM)? - ANSWER - a process,
effected by an entity's board of directors, management, and other
personnel designed to identify potential events that may affect the entity
and to manage risk within its risk appetite
One difference between the AICPA auditor's report and that of the
PCAOB is - ANSWER - the PCAOB report includes a separate section
on Critical Audit Matters.
Who linked earnings management to an excessive zeal to project
smoother earnings from year to year that casts a pall over the quality of
the underlying numbers? - ANSWER - Arthur Levitt
The main difference between a discretionary and nondiscretionary
accrual is - ANSWER - discretionary accruals are items that
management has full control over.
Accruals that are based on estimated changes in fundamental economic
performance of the firm are - ANSWER - nondiscretionary accruals.
In the Bruns and Merchant survey of managers, which technique to
manage earnings was considered most acceptable? - ANSWER -
manipulating operating decisions
What is the SEC's position on companies that communicate with
investors on social media? - ANSWER - It is legal so long as companies
inform investors which outlets they intend to use.
pg. 3
, One result of earnings management is - ANSWER - it brings into
question the quality of earnings.
The SEC requires stealth restatements to be - ANSWER - disclosed only
in an 8-K report or amended 10-K/A or 10-Q/A.
In the 2019 Audit Analytics report, what was the most common reason
cited for financial restatements? - ANSWER - revenue recognition
In the Hertz fraud, the company tried to explain its use of non-GAAP
financial measures by - ANSWER - comparing the validity of the
amounts to pre-tax GAAP income.
Earnings management is likely to decrease when corporate governance
systems - ANSWER - set an ethical tone at the top.
The legal precedent that evolves from legal opinions issued by judges in
deciding a case and guides judges in deciding similar cases in the future
is referred to as - ANSWER - common law.
The key element that protects an auditor against common law liability is
- ANSWER - adherence to generally accepted auditing standards
(GAAS).
In the United States, if the auditor can demonstrate having performed
services with the same degree of skill and judgment possessed by others
in the profession, they can be said to have exercised - ANSWER - due
care.
pg. 4
