WGU D551 PRE-ASSESSMENT: FRAUD AND FORENSIC ACCOUNTING (JAC2) (PJAC)
QUESTIONS AND ANSWERS|LATEST 2025/2026 UPDATE
100% CORRECT.
Attempt #2
Status: Passed
1. Which action is potentially unethical because it understates cost of goods sold?
YOUR CORRECT
ANSWER ANSWER
Understating purchases
Understating purchase returns
Understating ending inventory
Understating purchase discounts
2. Why is it unethical for a supervisor to ask an accountant to capitalize the marketing research program?
YOUR CORRECT
ANSWER ANSWER
This action overstates assets.
This action overstates expenses.
This action understates liabilities.
This action understates net income.
3. How can financial statement fraud impact stakeholders?
YOUR CORRECT
ANSWER ANSWER
Investors may experience lower interest rates.
Fraud can be an embarrassment to the audit profession.
Investors may be more willing to purchase new stock issues.
Fraud can lead to stock options decreasingly being used for executive
compensation.
4. How do fraudulent financial statements impact stakeholders and the markets?
YOUR CORRECT
ANSWER ANSWER
Financial statement fraud leads to embezzlement. Accessibility Policy Accessibility Settings
, YOUR CORRECT
ANSWER ANSWER
Interest rates rise as a result of financial statement fraud.
Financial statement fraud leads investors to lose confidence.
CEOs acquire additional company stock following financial statement
fraud.
5. What is a consequence of financial statement fraud?
YOUR CORRECT
ANSWER ANSWER
The organization shows losses due to embezzlement.
Red flags prove that fraud occurred in the organization.
Suppliers are able to take advantage of the organization.
The organization appears more profitable than it actually is.
6. What are two potential consequences a company accused of financial statement fraud can face?
Choose 2 answers
YOUR CORRECT
ANSWER ANSWER
The CEO might be indicted and convicted.
The SEC might relist and refinance the company.
Company stock price might decline when news of fraud reaches the press.
The company may be required to issue new stock to provide needed funds.
7. What is the motivation behind committing fraud through the backdating of stock options?
YOUR CORRECT
ANSWER ANSWER
Giving bonuses to employees
Increasing executive compensation
Ensuring a successful stock issuance
Preventing a violation of debt covenants
8. What is a common motivator of financial statement fraud?
Accessibility Policy Accessibility Settings
, YOUR CORRECT
ANSWER ANSWER
Greed
Intelligence
Health issues
Sense of entitlement
9. What is the most common method used to commit financial statement fraud, according to the COSO study?
YOUR CORRECT
ANSWER ANSWER
Capitalizing expenses
Overstating existing assets
Improperly recognizing revenue
Failing to give complete disclosure
10. What was the auditor's responsibility to detect fraud under SAP 30?
YOUR CORRECT
ANSWER ANSWER
To thoroughly interview key employees
To conduct statistical regression models
To be aware of the possibility that irregularities may exist
To determine if management was giving false statements
11. What were auditors required to do under SAP 30?
YOUR CORRECT
ANSWER ANSWER
Test for fraud until it is found
Design tests to detect fraud
Maintain a high level of mistrust in management
Assume increased responsibility to detect fraud
12.
upon the truthfulness of records obtained from the client?
Accessibility Policy Accessibility Settings
QUESTIONS AND ANSWERS|LATEST 2025/2026 UPDATE
100% CORRECT.
Attempt #2
Status: Passed
1. Which action is potentially unethical because it understates cost of goods sold?
YOUR CORRECT
ANSWER ANSWER
Understating purchases
Understating purchase returns
Understating ending inventory
Understating purchase discounts
2. Why is it unethical for a supervisor to ask an accountant to capitalize the marketing research program?
YOUR CORRECT
ANSWER ANSWER
This action overstates assets.
This action overstates expenses.
This action understates liabilities.
This action understates net income.
3. How can financial statement fraud impact stakeholders?
YOUR CORRECT
ANSWER ANSWER
Investors may experience lower interest rates.
Fraud can be an embarrassment to the audit profession.
Investors may be more willing to purchase new stock issues.
Fraud can lead to stock options decreasingly being used for executive
compensation.
4. How do fraudulent financial statements impact stakeholders and the markets?
YOUR CORRECT
ANSWER ANSWER
Financial statement fraud leads to embezzlement. Accessibility Policy Accessibility Settings
, YOUR CORRECT
ANSWER ANSWER
Interest rates rise as a result of financial statement fraud.
Financial statement fraud leads investors to lose confidence.
CEOs acquire additional company stock following financial statement
fraud.
5. What is a consequence of financial statement fraud?
YOUR CORRECT
ANSWER ANSWER
The organization shows losses due to embezzlement.
Red flags prove that fraud occurred in the organization.
Suppliers are able to take advantage of the organization.
The organization appears more profitable than it actually is.
6. What are two potential consequences a company accused of financial statement fraud can face?
Choose 2 answers
YOUR CORRECT
ANSWER ANSWER
The CEO might be indicted and convicted.
The SEC might relist and refinance the company.
Company stock price might decline when news of fraud reaches the press.
The company may be required to issue new stock to provide needed funds.
7. What is the motivation behind committing fraud through the backdating of stock options?
YOUR CORRECT
ANSWER ANSWER
Giving bonuses to employees
Increasing executive compensation
Ensuring a successful stock issuance
Preventing a violation of debt covenants
8. What is a common motivator of financial statement fraud?
Accessibility Policy Accessibility Settings
, YOUR CORRECT
ANSWER ANSWER
Greed
Intelligence
Health issues
Sense of entitlement
9. What is the most common method used to commit financial statement fraud, according to the COSO study?
YOUR CORRECT
ANSWER ANSWER
Capitalizing expenses
Overstating existing assets
Improperly recognizing revenue
Failing to give complete disclosure
10. What was the auditor's responsibility to detect fraud under SAP 30?
YOUR CORRECT
ANSWER ANSWER
To thoroughly interview key employees
To conduct statistical regression models
To be aware of the possibility that irregularities may exist
To determine if management was giving false statements
11. What were auditors required to do under SAP 30?
YOUR CORRECT
ANSWER ANSWER
Test for fraud until it is found
Design tests to detect fraud
Maintain a high level of mistrust in management
Assume increased responsibility to detect fraud
12.
upon the truthfulness of records obtained from the client?
Accessibility Policy Accessibility Settings
