WGU - D251 Advanced Auditing EXAM
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(Latest Update 2026) UPDATE!!
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Terms in this set (297)
misstatement An error, either intentional or unintentional, that
exists in a transaction or financial statement
account balance.
alternative procedures 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.
Altman Z-scores 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.
attribute A characteristic of the population of interest to
the auditor.
,Attributes sampling A statistical sampling method used to estimate
the rate of control procedure failures based on
selecting one sample and performing the
appropriate audit procedure.
Audit Risk The risk that the auditor expresses an
inappropriate audit opinion when the financial
statements are materially misstated.
Audit Risk Model Audit Risk = Inherent Risk X Control Risk X
Detention Risk
audit risk model A conceptual depiction of the relationship
between inherent risk, control risk, detection risk,
and audit risk.
Audit sampling The application of an audit procedure to less
than 100% of the items within an account balance
or class of transactions for the purpose of
evaluating some characteristic of the balance or
class.
audit scope The range of accounts and transactions that the
auditor evaluates, along with the amount of
evidence that they gather, assessments of which
accounts and transactions are material, as well as
the critical areas where the auditor employed
significant assumptions and made associated
professional judgments.
auditor business risk This risk reflects the potential for loss to the
auditor that the client poses, including being a
publicly traded client, not being a profitable
engagement, damaging the auditor's reputation,
and/or potential litigation relating to the
engagement.
,auditor-detected misstatements Such a misstatement occurs when, during the
audit, the auditor comes to find that there exists
an error in the recording of a particular
transaction, regardless of whether it was
intentional or unintentional.
automated purchasing system A networked software system that links a
company's website to other vendors whose
offerings and prices have been preapproved by
appropriate management.
Basic precision The amount of uncertainty associated with testing
only a part of the population (sampling risk).
Basic precision is calculated as the sampling
interval multiplied by a confidence factor.
big data High volume, high velocity, and/or high variety
information assets that require new forms of
processing to enable enhanced decision making,
insight discovery, and process optimization.
Block sampling A sampling technique that involves selecting a
sample that consists of contiguous population
items, such as selecting transactions by day or
week.
brainstorming A group discussion designed to encourage
auditors to creatively assess client risks,
particularly those relevant to the possible
existence of fraud in the organization.
business intelligence The process of transforming all of the raw data
that companies (providers) collect from their
various operations into actionable information.
, busy season An error, either intentional or unintentional, that
exists An intensive time of the year during which
the auditor faces the greatest deadline pressure
and work volume based upon the need to
provide assurance over the client's financial
reports.
Client business risks Risks affecting the business operations and
potential outcomes of an organization's activities.
Collectibility The risk that the seller will be unable to collect
the entitled contractual consideration from the
customer.
component An entity or business activity for which group or
component management prepares financial
information that is required by the applicable
financial reporting framework to be included in
the group financial statements.
component auditor An auditor who performs work on the financial
information of a component that will be used as
audit evidence for the group audit. A component
auditor may be part of the group engagement
partner's firm, a network firm of the group
engagement partner's firm, or another firm.
concurring partner review A review at the end of each audit conducted by
an experienced auditor, usually a partner, who
was not a part of the audit team, but who has
appropriate competence, independence,
integrity, and objectivity. The purpose of this
review is to help make sure that the audit and
audit documentation are complete and support
the audit opinion on the financial statements and,
for public companies, on the client's internal
controls.
Questions and Answers (Verified Answers)
(Latest Update 2026) UPDATE!!
Save
Terms in this set (297)
misstatement An error, either intentional or unintentional, that
exists in a transaction or financial statement
account balance.
alternative procedures 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.
Altman Z-scores 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.
attribute A characteristic of the population of interest to
the auditor.
,Attributes sampling A statistical sampling method used to estimate
the rate of control procedure failures based on
selecting one sample and performing the
appropriate audit procedure.
Audit Risk The risk that the auditor expresses an
inappropriate audit opinion when the financial
statements are materially misstated.
Audit Risk Model Audit Risk = Inherent Risk X Control Risk X
Detention Risk
audit risk model A conceptual depiction of the relationship
between inherent risk, control risk, detection risk,
and audit risk.
Audit sampling The application of an audit procedure to less
than 100% of the items within an account balance
or class of transactions for the purpose of
evaluating some characteristic of the balance or
class.
audit scope The range of accounts and transactions that the
auditor evaluates, along with the amount of
evidence that they gather, assessments of which
accounts and transactions are material, as well as
the critical areas where the auditor employed
significant assumptions and made associated
professional judgments.
auditor business risk This risk reflects the potential for loss to the
auditor that the client poses, including being a
publicly traded client, not being a profitable
engagement, damaging the auditor's reputation,
and/or potential litigation relating to the
engagement.
,auditor-detected misstatements Such a misstatement occurs when, during the
audit, the auditor comes to find that there exists
an error in the recording of a particular
transaction, regardless of whether it was
intentional or unintentional.
automated purchasing system A networked software system that links a
company's website to other vendors whose
offerings and prices have been preapproved by
appropriate management.
Basic precision The amount of uncertainty associated with testing
only a part of the population (sampling risk).
Basic precision is calculated as the sampling
interval multiplied by a confidence factor.
big data High volume, high velocity, and/or high variety
information assets that require new forms of
processing to enable enhanced decision making,
insight discovery, and process optimization.
Block sampling A sampling technique that involves selecting a
sample that consists of contiguous population
items, such as selecting transactions by day or
week.
brainstorming A group discussion designed to encourage
auditors to creatively assess client risks,
particularly those relevant to the possible
existence of fraud in the organization.
business intelligence The process of transforming all of the raw data
that companies (providers) collect from their
various operations into actionable information.
, busy season An error, either intentional or unintentional, that
exists An intensive time of the year during which
the auditor faces the greatest deadline pressure
and work volume based upon the need to
provide assurance over the client's financial
reports.
Client business risks Risks affecting the business operations and
potential outcomes of an organization's activities.
Collectibility The risk that the seller will be unable to collect
the entitled contractual consideration from the
customer.
component An entity or business activity for which group or
component management prepares financial
information that is required by the applicable
financial reporting framework to be included in
the group financial statements.
component auditor An auditor who performs work on the financial
information of a component that will be used as
audit evidence for the group audit. A component
auditor may be part of the group engagement
partner's firm, a network firm of the group
engagement partner's firm, or another firm.
concurring partner review A review at the end of each audit conducted by
an experienced auditor, usually a partner, who
was not a part of the audit team, but who has
appropriate competence, independence,
integrity, and objectivity. The purpose of this
review is to help make sure that the audit and
audit documentation are complete and support
the audit opinion on the financial statements and,
for public companies, on the client's internal
controls.
