WGU D251 ADVANCED AUDITING
OBJECTIVE ASSESSMENT FINAL
COMPREHENSIVE ASSESSMENT TEST
PAPER QUESTIONS AND SOLUTIONS
⩥ alternative procedures.
Answer: 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.
Answer: 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.
Answer: A characteristic of the population of interest to the auditor.
⩥ Attributes sampling.
Answer: 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.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
⩥ Audit Risk Model.
Answer: Audit Risk = Inherent Risk X Control Risk X Detention Risk
⩥ audit risk model.
Answer: A conceptual depiction of the relationship between inherent
risk, control risk, detection risk, and audit risk.
⩥ Audit sampling.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: A sampling technique that involves selecting a sample that
consists of contiguous population items, such as selecting transactions
by day or week.
⩥ brainstorming.
Answer: 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.
Answer: The process of transforming all of the raw data that companies
(providers) collect from their various operations into actionable
information.
⩥ busy season.
Answer: 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.
Answer: Risks affecting the business operations and potential outcomes
of an organization's activities.
OBJECTIVE ASSESSMENT FINAL
COMPREHENSIVE ASSESSMENT TEST
PAPER QUESTIONS AND SOLUTIONS
⩥ alternative procedures.
Answer: 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.
Answer: 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.
Answer: A characteristic of the population of interest to the auditor.
⩥ Attributes sampling.
Answer: 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.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
⩥ Audit Risk Model.
Answer: Audit Risk = Inherent Risk X Control Risk X Detention Risk
⩥ audit risk model.
Answer: A conceptual depiction of the relationship between inherent
risk, control risk, detection risk, and audit risk.
⩥ Audit sampling.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: A sampling technique that involves selecting a sample that
consists of contiguous population items, such as selecting transactions
by day or week.
⩥ brainstorming.
Answer: 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.
Answer: The process of transforming all of the raw data that companies
(providers) collect from their various operations into actionable
information.
⩥ busy season.
Answer: 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.
Answer: Risks affecting the business operations and potential outcomes
of an organization's activities.
