WGU D251 Tests – Questions & Correct Answers
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Terms in this set (110)
What is the materiality level that an Performance materiality
auditor uses for determining
significant accounts, significant
locations, and audit procedures for
those accounts and locations?
An auditor has determined The auditor should perform additional substantive
performance materiality has been set audit procedures.
too high at the beginning of the audit.
Which procedures should this auditor
consider to detect misstatements?
Which risk exists at the overall Risk of material misstatement
financial statement level and at the
assertion level and can be
categorized as involving inherent risk
and control risk?
What represents an identified and Significant risk
assessed risk of material misstatement
that requires special audit
consideration?
What is the impact on the amount of The acceptable audit risk is reduced.
acceptable audit risk if an auditor
believes the chance of financial failure
of a client is high?
Which factor should lead an auditor to The account balance consists of a large number of
assess inherent risk as high? complex transactions.
, Which factor would lead an auditor to The client's use of information technology is
assess client business risk at a higher incompatible across systems and processes.
level?
An auditor determines overall 75% of $500,000
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?
At which percentage do auditors 5% of planning materiality
commonly set posting materiality?
What is quantitative evaluation? Determining whether the upper limit of the possible
deviation rate exceeds the tolerable deviation rate
In which circumstance would an When the total estimated misstatement exceeds the
auditor change an audit objective to tolerable misstatement
estimating the correct value?
What describes tainting percentage? The percentage of misstatement present in a logical
unit
Which statement reflects a 5% risk of 95% confidence level that the actual rate of deviation
overreliance? will not exceed the tolerable deviation
What is the objective of sampling To determine whether controls are operating
when testing controls? effectively
What is the primary objective of To identify overstatement errors
monetary unit sampling?
Save
Terms in this set (110)
What is the materiality level that an Performance materiality
auditor uses for determining
significant accounts, significant
locations, and audit procedures for
those accounts and locations?
An auditor has determined The auditor should perform additional substantive
performance materiality has been set audit procedures.
too high at the beginning of the audit.
Which procedures should this auditor
consider to detect misstatements?
Which risk exists at the overall Risk of material misstatement
financial statement level and at the
assertion level and can be
categorized as involving inherent risk
and control risk?
What represents an identified and Significant risk
assessed risk of material misstatement
that requires special audit
consideration?
What is the impact on the amount of The acceptable audit risk is reduced.
acceptable audit risk if an auditor
believes the chance of financial failure
of a client is high?
Which factor should lead an auditor to The account balance consists of a large number of
assess inherent risk as high? complex transactions.
, Which factor would lead an auditor to The client's use of information technology is
assess client business risk at a higher incompatible across systems and processes.
level?
An auditor determines overall 75% of $500,000
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?
At which percentage do auditors 5% of planning materiality
commonly set posting materiality?
What is quantitative evaluation? Determining whether the upper limit of the possible
deviation rate exceeds the tolerable deviation rate
In which circumstance would an When the total estimated misstatement exceeds the
auditor change an audit objective to tolerable misstatement
estimating the correct value?
What describes tainting percentage? The percentage of misstatement present in a logical
unit
Which statement reflects a 5% risk of 95% confidence level that the actual rate of deviation
overreliance? will not exceed the tolerable deviation
What is the objective of sampling To determine whether controls are operating
when testing controls? effectively
What is the primary objective of To identify overstatement errors
monetary unit sampling?
