WGU D215 TEST QUESTIONS WITH
CORRECT ANSWERS
What is the purpose of a financial statement audit? - ANSWER To give
financial statement users an opinion by the auditor regarding whether the
financial statements are presented fairly by an applicable financial reporting
framework
Who are the intended users of assurance services? - ANSWER Decision
makers ie
Investors
Creditors
Regulators
What is "independent" when discussing assurance services? - ANSWER The
person providing the service is not associated with the preparation of the
information & is objective in the evaluation of the information.
What is an "applicable financial reporting framework"? - ANSWER GAAP
IFRS
federal income tax basis of accounting
What are the most common tasks of the internal auditors? - ANSWER
Evaluating and improving risk management
Internal control procedures
Elements of the governance process
What are the three elements of an operational audit? - ANSWER Economy.
Efficiency.
Effectiveness.
.Of an organisations activity
, Who are the main users of company accounts - ANSWER Existing & future
investors
Suppliers
Customers
Lenders
Employees
Governments
General public
Why would financial statement users need an audit? - ANSWER Company
distance (do not have immediate access to company records), financial
statement complexity, management and user conflicting interests, reliability of
information
Explain why auditors, or CPAs, are the appropriate professionals to perform an
audit. - ANSWER They have the experience & knowledge to assess the
information being reported by the preparers as being fair.
They can access company records.
Auditors have little motivation to assist the company in presenting the results in
the best possible light because their work is continuously under scrutiny by
regulators
Describe managements responsibility in terms of financial statement audit. -
ANSWER They must ensure that the information presented in the financial
statements is presented in a fair way & that it abides by the financial reporting
framework used.
Establishing, implementing & maintaining internal control that is relevant to the
preparation & fair presentation of the financial statements.
Allowing the auditors access to all documentation, records & personnel that
relate to the preparation & fair presentation of financial statements & any
additional information the auditors consider helpful to enable them to conduct
the audit.
CORRECT ANSWERS
What is the purpose of a financial statement audit? - ANSWER To give
financial statement users an opinion by the auditor regarding whether the
financial statements are presented fairly by an applicable financial reporting
framework
Who are the intended users of assurance services? - ANSWER Decision
makers ie
Investors
Creditors
Regulators
What is "independent" when discussing assurance services? - ANSWER The
person providing the service is not associated with the preparation of the
information & is objective in the evaluation of the information.
What is an "applicable financial reporting framework"? - ANSWER GAAP
IFRS
federal income tax basis of accounting
What are the most common tasks of the internal auditors? - ANSWER
Evaluating and improving risk management
Internal control procedures
Elements of the governance process
What are the three elements of an operational audit? - ANSWER Economy.
Efficiency.
Effectiveness.
.Of an organisations activity
, Who are the main users of company accounts - ANSWER Existing & future
investors
Suppliers
Customers
Lenders
Employees
Governments
General public
Why would financial statement users need an audit? - ANSWER Company
distance (do not have immediate access to company records), financial
statement complexity, management and user conflicting interests, reliability of
information
Explain why auditors, or CPAs, are the appropriate professionals to perform an
audit. - ANSWER They have the experience & knowledge to assess the
information being reported by the preparers as being fair.
They can access company records.
Auditors have little motivation to assist the company in presenting the results in
the best possible light because their work is continuously under scrutiny by
regulators
Describe managements responsibility in terms of financial statement audit. -
ANSWER They must ensure that the information presented in the financial
statements is presented in a fair way & that it abides by the financial reporting
framework used.
Establishing, implementing & maintaining internal control that is relevant to the
preparation & fair presentation of the financial statements.
Allowing the auditors access to all documentation, records & personnel that
relate to the preparation & fair presentation of financial statements & any
additional information the auditors consider helpful to enable them to conduct
the audit.
