WGU D251 ADVANCED AUDITING
OBJECTIVE ASSESSMENT TERMINAL
CERTIFICATION EVALUATION COMPLETE
QUESTIONS WITH FULL SOLUTION
ALREADY PASSED
⩥ Top-stratum.
Answer: Population items whose book values exceed the sampling
interval and are therefore all included in the sample. The top stratum
consists of all account balances exceeding a specific dollar amount.
⩥ Trend analysis.
Answer: An analytical technique that includes simple year-to-year
comparisons of account balances, graphic presentations, analysis of
financial data, histograms of ratios, and projections of account balances
based on the history of changes in the account.
⩥ Type I subsequent events.
Answer: Events that existed at the balance sheet date.
⩥ Type II subsequent events.
Answer: Events that did not exist at the balance sheet date, but that may
require disclosure.
,⩥ unmodified opinion.
Answer: The opinion expressed by the auditor when the auditor
concludes that the financial statements are presented fairly, in all
material respects, in accordance with the applicable financial reporting
framework.
⩥ unqualified opinion.
Answer: The opinion expressed by the auditor when the auditor
concludes that the financial statements are presented fairly, in all
material respects, in accordance with the applicable financial reporting
framework.
⩥ vendor fraud.
Answer: These fraud schemes involve improper payments to real or
fictitious vendors; vendor fraud can occur through an internal employee
or employees (i.e., collusion), through an outside vendor, or through
collusion between an outside vendor and an internal employee.
⩥ Worker misclassification fraud.
Answer: The organization fraudulently classifies employees as
independent contractors (i.e., 1099 employees) when these employees
are actually full-time employees (i.e., W-2 employees) to avoid having
to pay payroll taxes, healthcare premiums, and pension benefits.
,⩥ Which phrase or term regarding materiality is used by the Supreme
Court of the United States and is not found in FASB Concepts
Statements No. 2?.
Answer: significantly altered the total mix of information available
⩥ A new client is audited for the first time, and there is insufficient
evidence to support the inventory beginning balance. Which type of
audit limitation is this?.
Answer: Scope limitation
⩥ After identifying the risks of material misstatement, an auditor
develops an audit plan in response to those risks. Which plan for testing
revenue should the auditor implement if the auditor believes that the
control risk is high?.
Answer: Obtain necessary audit evidence only from tests of details
⩥ An auditor discovered facts after an audit report release date that may
have affected the financial statements and the auditor's report had the
auditor known the facts at the report release date. Which steps should the
auditor take to prevent further reliance on the financial statements and
audit report?.
Answer: Advise the client to make appropriate and timely disclosure of
the newly discovered facts
, ⩥ An auditor discovered facts after an audit report release date that may
have affected the financial statements and the auditor's report if the
auditor had known the facts at the audit report release date. The auditor
notified the client to make appropriate and timely disclosure of these
new facts, but the client did not cooperate. Which steps should the
auditor take to prevent further reliance on the financial statements and
audit report?.
Answer: Notify the client and any regulatory agency with jurisdiction
over the client that the audit report should no longer be associated with
the client's financial statements
⩥ An auditor feels some pressure to acquiesce to management's demands
to not require that misstatements be corrected. What is one of the most
important drivers of audit quality in this situation?.
Answer: Audit firm culture
⩥ An auditor has assessed a client's risk of material misstatement related
to the existence of inventory as high. This client has incentives to
overstate income to achieve profit targets that affect management
bonuses. The oversight of the vice president of finance is relatively weak
because of a lack of supervision by top management. Other controls are
effectively designed. Which mix of audit evidence would be most
appropriate?.
Answer: 50% tests of details, 30% analytics, and 20% tests of controls
OBJECTIVE ASSESSMENT TERMINAL
CERTIFICATION EVALUATION COMPLETE
QUESTIONS WITH FULL SOLUTION
ALREADY PASSED
⩥ Top-stratum.
Answer: Population items whose book values exceed the sampling
interval and are therefore all included in the sample. The top stratum
consists of all account balances exceeding a specific dollar amount.
⩥ Trend analysis.
Answer: An analytical technique that includes simple year-to-year
comparisons of account balances, graphic presentations, analysis of
financial data, histograms of ratios, and projections of account balances
based on the history of changes in the account.
⩥ Type I subsequent events.
Answer: Events that existed at the balance sheet date.
⩥ Type II subsequent events.
Answer: Events that did not exist at the balance sheet date, but that may
require disclosure.
,⩥ unmodified opinion.
Answer: The opinion expressed by the auditor when the auditor
concludes that the financial statements are presented fairly, in all
material respects, in accordance with the applicable financial reporting
framework.
⩥ unqualified opinion.
Answer: The opinion expressed by the auditor when the auditor
concludes that the financial statements are presented fairly, in all
material respects, in accordance with the applicable financial reporting
framework.
⩥ vendor fraud.
Answer: These fraud schemes involve improper payments to real or
fictitious vendors; vendor fraud can occur through an internal employee
or employees (i.e., collusion), through an outside vendor, or through
collusion between an outside vendor and an internal employee.
⩥ Worker misclassification fraud.
Answer: The organization fraudulently classifies employees as
independent contractors (i.e., 1099 employees) when these employees
are actually full-time employees (i.e., W-2 employees) to avoid having
to pay payroll taxes, healthcare premiums, and pension benefits.
,⩥ Which phrase or term regarding materiality is used by the Supreme
Court of the United States and is not found in FASB Concepts
Statements No. 2?.
Answer: significantly altered the total mix of information available
⩥ A new client is audited for the first time, and there is insufficient
evidence to support the inventory beginning balance. Which type of
audit limitation is this?.
Answer: Scope limitation
⩥ After identifying the risks of material misstatement, an auditor
develops an audit plan in response to those risks. Which plan for testing
revenue should the auditor implement if the auditor believes that the
control risk is high?.
Answer: Obtain necessary audit evidence only from tests of details
⩥ An auditor discovered facts after an audit report release date that may
have affected the financial statements and the auditor's report had the
auditor known the facts at the report release date. Which steps should the
auditor take to prevent further reliance on the financial statements and
audit report?.
Answer: Advise the client to make appropriate and timely disclosure of
the newly discovered facts
, ⩥ An auditor discovered facts after an audit report release date that may
have affected the financial statements and the auditor's report if the
auditor had known the facts at the audit report release date. The auditor
notified the client to make appropriate and timely disclosure of these
new facts, but the client did not cooperate. Which steps should the
auditor take to prevent further reliance on the financial statements and
audit report?.
Answer: Notify the client and any regulatory agency with jurisdiction
over the client that the audit report should no longer be associated with
the client's financial statements
⩥ An auditor feels some pressure to acquiesce to management's demands
to not require that misstatements be corrected. What is one of the most
important drivers of audit quality in this situation?.
Answer: Audit firm culture
⩥ An auditor has assessed a client's risk of material misstatement related
to the existence of inventory as high. This client has incentives to
overstate income to achieve profit targets that affect management
bonuses. The oversight of the vice president of finance is relatively weak
because of a lack of supervision by top management. Other controls are
effectively designed. Which mix of audit evidence would be most
appropriate?.
Answer: 50% tests of details, 30% analytics, and 20% tests of controls
