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WGU D251 Exam Most Recent Verified Exam Actual
Complete Real Exam Questions And Correct Answers
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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? - Answer-The auditor should perform
additional substantive audit procedures.
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? - Answer-Risk of
material misstatement
What represents an identified and assessed risk of
material misstatement that requires special audit
consideration? - Answer-Significant risk
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? - Answer-The acceptable audit risk is
reduced.
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Which factor should lead an auditor to assess inherent risk
as high? - Answer-The account balance consists of a large
number of complex transactions.
Which factor would lead an auditor to assess client
business risk at a higher level? - Answer-The client's use
of information technology is incompatible across systems
and processes.
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? - Answer-75% of $500,000
At which percentage do auditors commonly set posting
materiality? - Answer-5% of planning materiality
What is Client Business Risk? - Answer-Risks affecting the
business operations and potential outcomes of an
organization's activities.
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What does the Risk of Material Misstatement represent? -
Answer-The Inherent and Control Risks
Who controls the Risk of Material Misstatement? - Answer-
The Client
What happens to Detection and Audit Risk when Risk of
Material Misstatement is high? - Answer-Detection Risk is
lowered to reduce the Audit Risk to an acceptable level.
What is Inherent Risk? - Answer-The likelihood of material
misstatement without considering the effects of internal
control
Performance Materiality is also known as _____________.
- Answer-Tolerable Error
Auditor uses Performance Materiality for ____________. -
Answer-Determining significant accounts, locations, and
audit procedures.
Performance Materiality is what percent of Planning
Materiality? - Answer-75%
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What happens is Performance Materiality is set too high? -
Answer-Auditor might not perform sufficient procedures to
detect material misstatements.
What happens if Performance Materiality is set too low? -
Answer-Auditor might perform more substantive
procedures than needed.
Overall Materiality is also known as _________. - Answer-
Planning Materiality
Auditors use Overall Materiality to ___________. -
Answer-Determine whether financial statements overall
are materially correct.
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.
What percentage is Posting Materiality commonly set at? -
Answer-5% of Planning Materiality
WGU D251 Exam Most Recent Verified Exam Actual
Complete Real Exam Questions And Correct Answers
(Verified Answers) Already Graded A+ | Guaranteed
Success!! | Newest Exam!!!
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? - Answer-The auditor should perform
additional substantive audit procedures.
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? - Answer-Risk of
material misstatement
What represents an identified and assessed risk of
material misstatement that requires special audit
consideration? - Answer-Significant risk
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? - Answer-The acceptable audit risk is
reduced.
,2|Page
Which factor should lead an auditor to assess inherent risk
as high? - Answer-The account balance consists of a large
number of complex transactions.
Which factor would lead an auditor to assess client
business risk at a higher level? - Answer-The client's use
of information technology is incompatible across systems
and processes.
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? - Answer-75% of $500,000
At which percentage do auditors commonly set posting
materiality? - Answer-5% of planning materiality
What is Client Business Risk? - Answer-Risks affecting the
business operations and potential outcomes of an
organization's activities.
,3|Page
What does the Risk of Material Misstatement represent? -
Answer-The Inherent and Control Risks
Who controls the Risk of Material Misstatement? - Answer-
The Client
What happens to Detection and Audit Risk when Risk of
Material Misstatement is high? - Answer-Detection Risk is
lowered to reduce the Audit Risk to an acceptable level.
What is Inherent Risk? - Answer-The likelihood of material
misstatement without considering the effects of internal
control
Performance Materiality is also known as _____________.
- Answer-Tolerable Error
Auditor uses Performance Materiality for ____________. -
Answer-Determining significant accounts, locations, and
audit procedures.
Performance Materiality is what percent of Planning
Materiality? - Answer-75%
, 4|Page
What happens is Performance Materiality is set too high? -
Answer-Auditor might not perform sufficient procedures to
detect material misstatements.
What happens if Performance Materiality is set too low? -
Answer-Auditor might perform more substantive
procedures than needed.
Overall Materiality is also known as _________. - Answer-
Planning Materiality
Auditors use Overall Materiality to ___________. -
Answer-Determine whether financial statements overall
are materially correct.
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.
What percentage is Posting Materiality commonly set at? -
Answer-5% of Planning Materiality
