WGU D251 ADVANCED AUDITING OBJECTIVE
ASSESSMENT ACTUAL EXAM 2025/2026
COMPLETE QUESTIONS BANK AND CORRECT
DETAILED ANSWERS WITH RATIONALES ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Misstatement - ANSWER ✓ An error, either intentional or unintentional,
that exists in a transaction or financial statement account balance.
2. Alternative procedures - ANSWER ✓ Procedures used to obtain evidence
about the existence and valuation of accounts receivable when a positive
confirmation is not returned, including examining cash collected after the
confirmation date and vouching unpaid invoices to customers' orders, sales
orders, shipping documents, and sales invoices.
3. Altman Z-scores - ANSWER ✓ A series of ratios that have predictive power
in indicating the likelihood of bankruptcy. This score is named for the
person who first introduced the concept and associated measurement.
4. Attribute - ANSWER ✓ A characteristic of the population of interest to the
auditor.
5. Attributes sampling - ANSWER ✓ A statistical sampling method used to
estimate the rate of control procedure failures based on selecting one sample
and performing the appropriate audit procedure.
6. Audit Risk - ANSWER ✓ The risk that the auditor expresses an
inappropriate audit opinion when the financial statements are materially
misstated.
7. Audit Risk Model - ANSWER ✓ Audit Risk = Inherent Risk X Control Risk
X Detention Risk
,8. What are critical audit matters (CAM), according to the Public Company
Accounting Oversight Board (PCAOB)? - ANSWER ✓ A matter involving
especially challenging, subjective, or complex auditor judgment
9. What can a user of financial statements infer from an unqualified opinion on
the financial statements? - ANSWER ✓ The auditor has no reservations
about the fairness of presentation.
10.What can be determined after an auditor has tested purchases and verified
the beginning and ending inventory balances? - ANSWER ✓ Cost of goods
sold
11.What describes the misstatements identified throughout the audit that will be
considered at the end of the audit in determining whether the financial
statements overall are materially correct? - ANSWER ✓ Posting materiality
12.What is a control that may be implemented to ensure all sales that occur are
recorded in the general ledger? - ANSWER ✓ Using prenumbered shipping,
invoice, and sales documents
13.What is a disadvantage of monetary unit sampling (MUS)? - ANSWER ✓ It
is not designed to test for understatement.
14.What is a factor of nonsampling risk? - ANSWER ✓ Not carrying out the
appropriate audit procedure
15.What is a formal document that conveys responsibility for shipped
merchandise to the shipper? - ANSWER ✓ Bill of lading
16.What is a main provision of the Foreign Corrupt Practices Act (FCPA) of
1977 that was reemphasized and expanded as part of the Sarbanes-Oxley Act
of 2002? - ANSWER ✓ Companies that have securities listed on U.S.
markets must design and maintain an adequate system of internal accounting
controls.
,17.What is a primary reason an auditor would review a client's detailed aged
accounts receivable trial balance? - ANSWER ✓ To identify amounts due
from related parties
18.What is a reason that a perpetual inventory system is preferable to a periodic
system if adequately controlled and maintained? - ANSWER ✓ It provides
information to management where book inventory is continuously in
agreement with inventory on hand with specified time periods.
19.What is a tolerable rate of deviation according to the American Institute of
Certified Public Accountants (AICPA)? - ANSWER ✓ A rate of deviation
set by the auditor to obtain an appropriate level of assurance that the rate set
by the auditor is not exceeded by the actual rate of deviation
20.What is an auditor required to evaluate as part of the going concern
assumption? - ANSWER ✓ The likelihood that the audit client will continue
operating as a going concern for a reasonable amount of time after the date
of the auditor's report
21.What is an example of the contents of an opinion paragraph in an
unqualified audit report? - ANSWER ✓ "The financial statements referred to
above present fairly . . . ."
22.What is an example of the type of analytical procedures that an auditor
would use for inventory? - ANSWER ✓ Inventory turnover for the previous
five years
23.What is an indicator of fraud in the acquisition and payment cycle? -
ANSWER ✓ When large, manual adjustments are made to the inventory
accounts
24.What is control risk in the audit risk model? - ANSWER ✓ The
susceptibility of a misstatement occurring that could be material to the
financial statements before considering any internal controls
25.Performance Materiality is also known as _____________. - ANSWER ✓
Tolerable Error
, 26.Auditor uses Performance Materiality for ____________. - ANSWER ✓
Determining significant accounts, locations, and audit procedures.
27.Performance Materiality is what percent of Planning Materiality? -
ANSWER ✓ 75%
28.What happens is Performance Materiality is set too high? - ANSWER ✓
Auditor might not perform sufficient procedures to detect material
misstatements.
29.What happens if Performance Materiality is set too low? - ANSWER ✓
Auditor might perform more substantive procedures than needed.
30.Overall Materiality is also known as _________. - ANSWER ✓ Planning
Materiality
31.Auditors use Overall Materiality to ___________. - ANSWER ✓ Determine
whether financial statements overall are materially correct.
32.What does Posting Materiality signify? - ANSWER ✓ The misstatements
identified throughout the audit that will be considered at the end of the audit
in determining whether the financial statements are materially correct.
33.What percentage is Posting Materiality commonly set at? - ANSWER ✓ 5%
of Planning Materiality
34.What is Materiality? - ANSWER ✓ The magnitude of an omission or
misstatement of accounting information that, in light of surrounding
circumstances, makes it probable that the judgment of a reasonable person
relying on the information would have been changed or influenced by the
omission or misstatement.
35.What makes a fact Material? - ANSWER ✓ If there is a substantial
likelihood that a reasonable investor would have viewed the fact as having
significantly altered the total mix of information made available.
ASSESSMENT ACTUAL EXAM 2025/2026
COMPLETE QUESTIONS BANK AND CORRECT
DETAILED ANSWERS WITH RATIONALES ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Misstatement - ANSWER ✓ An error, either intentional or unintentional,
that exists in a transaction or financial statement account balance.
2. Alternative procedures - ANSWER ✓ Procedures used to obtain evidence
about the existence and valuation of accounts receivable when a positive
confirmation is not returned, including examining cash collected after the
confirmation date and vouching unpaid invoices to customers' orders, sales
orders, shipping documents, and sales invoices.
3. Altman Z-scores - ANSWER ✓ A series of ratios that have predictive power
in indicating the likelihood of bankruptcy. This score is named for the
person who first introduced the concept and associated measurement.
4. Attribute - ANSWER ✓ A characteristic of the population of interest to the
auditor.
5. Attributes sampling - ANSWER ✓ A statistical sampling method used to
estimate the rate of control procedure failures based on selecting one sample
and performing the appropriate audit procedure.
6. Audit Risk - ANSWER ✓ The risk that the auditor expresses an
inappropriate audit opinion when the financial statements are materially
misstated.
7. Audit Risk Model - ANSWER ✓ Audit Risk = Inherent Risk X Control Risk
X Detention Risk
,8. What are critical audit matters (CAM), according to the Public Company
Accounting Oversight Board (PCAOB)? - ANSWER ✓ A matter involving
especially challenging, subjective, or complex auditor judgment
9. What can a user of financial statements infer from an unqualified opinion on
the financial statements? - ANSWER ✓ The auditor has no reservations
about the fairness of presentation.
10.What can be determined after an auditor has tested purchases and verified
the beginning and ending inventory balances? - ANSWER ✓ Cost of goods
sold
11.What describes the misstatements identified throughout the audit that will be
considered at the end of the audit in determining whether the financial
statements overall are materially correct? - ANSWER ✓ Posting materiality
12.What is a control that may be implemented to ensure all sales that occur are
recorded in the general ledger? - ANSWER ✓ Using prenumbered shipping,
invoice, and sales documents
13.What is a disadvantage of monetary unit sampling (MUS)? - ANSWER ✓ It
is not designed to test for understatement.
14.What is a factor of nonsampling risk? - ANSWER ✓ Not carrying out the
appropriate audit procedure
15.What is a formal document that conveys responsibility for shipped
merchandise to the shipper? - ANSWER ✓ Bill of lading
16.What is a main provision of the Foreign Corrupt Practices Act (FCPA) of
1977 that was reemphasized and expanded as part of the Sarbanes-Oxley Act
of 2002? - ANSWER ✓ Companies that have securities listed on U.S.
markets must design and maintain an adequate system of internal accounting
controls.
,17.What is a primary reason an auditor would review a client's detailed aged
accounts receivable trial balance? - ANSWER ✓ To identify amounts due
from related parties
18.What is a reason that a perpetual inventory system is preferable to a periodic
system if adequately controlled and maintained? - ANSWER ✓ It provides
information to management where book inventory is continuously in
agreement with inventory on hand with specified time periods.
19.What is a tolerable rate of deviation according to the American Institute of
Certified Public Accountants (AICPA)? - ANSWER ✓ A rate of deviation
set by the auditor to obtain an appropriate level of assurance that the rate set
by the auditor is not exceeded by the actual rate of deviation
20.What is an auditor required to evaluate as part of the going concern
assumption? - ANSWER ✓ The likelihood that the audit client will continue
operating as a going concern for a reasonable amount of time after the date
of the auditor's report
21.What is an example of the contents of an opinion paragraph in an
unqualified audit report? - ANSWER ✓ "The financial statements referred to
above present fairly . . . ."
22.What is an example of the type of analytical procedures that an auditor
would use for inventory? - ANSWER ✓ Inventory turnover for the previous
five years
23.What is an indicator of fraud in the acquisition and payment cycle? -
ANSWER ✓ When large, manual adjustments are made to the inventory
accounts
24.What is control risk in the audit risk model? - ANSWER ✓ The
susceptibility of a misstatement occurring that could be material to the
financial statements before considering any internal controls
25.Performance Materiality is also known as _____________. - ANSWER ✓
Tolerable Error
, 26.Auditor uses Performance Materiality for ____________. - ANSWER ✓
Determining significant accounts, locations, and audit procedures.
27.Performance Materiality is what percent of Planning Materiality? -
ANSWER ✓ 75%
28.What happens is Performance Materiality is set too high? - ANSWER ✓
Auditor might not perform sufficient procedures to detect material
misstatements.
29.What happens if Performance Materiality is set too low? - ANSWER ✓
Auditor might perform more substantive procedures than needed.
30.Overall Materiality is also known as _________. - ANSWER ✓ Planning
Materiality
31.Auditors use Overall Materiality to ___________. - ANSWER ✓ Determine
whether financial statements overall are materially correct.
32.What does Posting Materiality signify? - ANSWER ✓ The misstatements
identified throughout the audit that will be considered at the end of the audit
in determining whether the financial statements are materially correct.
33.What percentage is Posting Materiality commonly set at? - ANSWER ✓ 5%
of Planning Materiality
34.What is Materiality? - ANSWER ✓ The magnitude of an omission or
misstatement of accounting information that, in light of surrounding
circumstances, makes it probable that the judgment of a reasonable person
relying on the information would have been changed or influenced by the
omission or misstatement.
35.What makes a fact Material? - ANSWER ✓ If there is a substantial
likelihood that a reasonable investor would have viewed the fact as having
significantly altered the total mix of information made available.
