WGU D215 – Auditing (Actual)Exam QUESTIONS AND VERIFIED
ANSWERS A+ Grade 2026\2027
Ability of cash flow from operations to cover current debt and dividends
- correct answer Measures ability to cover current debt maturities and dividends with operating cash
flow.
Accounting estimate
- correct answer An approximation of a monetary amount when a precise means of measurement is not
available.
Accounting records
- correct answer Client's records of the initial accounting entry and supporting documents.
Acid-test (quick) ratio
- correct answer Measures ability to meet short-term obligations with liquid assets such as cash, short-
term investments, and receivables.
Advance shipping notice (ASN)
- correct answer An electronic acknowledgement of a transaction by a supplier indicating goods shipped,
prices, and other information such as freight costs or taxes.
Adverse interest threat
- correct answer The threat that a CPA will not act with objectivity because the CPA's interests are
opposed to the client's interests.
Adverse opinion
- correct answer Auditors state the financial statements are not fairly presented due to a pervasively
material departure from the applicable financial reporting framework.
Advocacy threat
- correct answer The threat that a CPA will promote a client's interests or position to the point that his
or her objectivity or independence is compromised.
,Allowance for sampling risk (ASR)
- correct answer A measure of the uncertainty associated with not sampling the entire population.
Analytical procedures
- correct answer Evaluations of financial information through analysis of plausible relationships among
both financial and nonfinancial data; analytical procedures also encompass such investigation, as is
necessary, of identified fluctuations or relationships that are inconsistent with other relevant
information or that differ from expected values by a significant amount.
Appropriate
- correct answer Refers to the quality of audit evidence gathered.
Assertions
- correct answer Statements or representations, explicit or implied, made by management regarding the
recognition, measurement, presentation, and disclosure of items included in the financial statements.
Assurance services
- correct answer Independent professional services that improve the quality of information, or its
context, for decision makers.
Attestation services
- correct answer Services performed when an independent practitioner, or CPA, is engaged to issue a
report on subject matter that is the responsibility of another party.
Attribute sampling
- correct answer A sampling technique used to reach a conclusion about a population in terms of a rate
(frequency) of occurrence.
Audit committee
- correct answer A committee of the board of directors responsible for oversight of internal controls,
financial reporting and disclosure in the financial statements, regulatory compliance, and the company's
independent auditors.
,Audit data analytics (ADA)
- correct answer The science and art of discovering and analyzing patterns, identifying anomalies, and
extracting other useful information in data underlying or related to the subject matter of an audit
through analysis, modeling, and visualization for planning and performing the audit.
Audit evidence
- correct answer Information gathered by the auditor that is used when forming an opinion on the fair
presentation of a client's financial statements.
Audit program
- correct answer A listing of details of the audit procedures to be used when testing controls, conducting
detailed substantive audit procedures, and completing the audit.
Audit risk
- correct answer The risk that an auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated.
Audit sampling
- correct answer The selection and evaluation of less than 100% of the population of audit relevance
such that the auditor expects the items selected (the sample) to be representative of the population
and, thus, likely to provide a reasonable basis for conclusions about the population.
Audit services
- correct answer Services by an independent CPA that provide financial statement users with (1) an
opinion on whether the financial statements are presented fairly, in all material respects, in accordance
with an applicable financial reporting framework and, in some cases, (2) an opinion on the effectiveness
of ICFR, which enhances the degree of confidence that intended users can place in the financial
statements.
Audit strategy
- correct answer The determination of the amount of time spent testing the client's internal controls and
conducting detailed testing of transactions and account balances.
Bank confirmation
- correct answer Correspondence sent directly by the auditors to their client's bank requesting
information such as cash held in the bank and details of any loans with the bank and interest rates
charged.
, Basic precision (BP)
- correct answer The amount of estimated misstatement in the population, even if no misstatements are
detected in the sample.
Benchmarking
- correct answer An audit testing strategy that can be used to allow evidence obtained in prior audit
periods to support a conclusion about IT application controls in the current audit period.
Bid rigging
- correct answer An employee assists a vendor in winning a competitive bid for a contract; employee is
compensated, usually in the form of a cash payment.
Bill-and-hold transactions
- correct answer A customer is billed for goods, but goods are not shipped; accounting principles have
very narrow criteria for when revenue can be recognized for a bill-and-hold transaction; the transaction
must be initiated by the customer, and the customer must have a sound economic reason for
purchasing the goods and asking the seller to continue to hold the goods.
Board of directors
- correct answer A group that represents the shareholders and is responsible for ensuring the company
is being run to benefit the shareholders.
Bond trustee
- correct answer A bond trustee is usually a commercial bank or a trust company that is given fiduciary
powers by a bond issuer to enforce the terms of a bond indenture; the trustee sees that bond interest
payments are made as scheduled and protects the interests of the bondholders if the issuer defaults.
Breach of contract
- correct answer A binding agreement is not honored by one or more parties to a contract.
Cash earnings per share (CEPS) ratio
- correct answer Shows cash flow capacity of a company for each common share issued.
ANSWERS A+ Grade 2026\2027
Ability of cash flow from operations to cover current debt and dividends
- correct answer Measures ability to cover current debt maturities and dividends with operating cash
flow.
Accounting estimate
- correct answer An approximation of a monetary amount when a precise means of measurement is not
available.
Accounting records
- correct answer Client's records of the initial accounting entry and supporting documents.
Acid-test (quick) ratio
- correct answer Measures ability to meet short-term obligations with liquid assets such as cash, short-
term investments, and receivables.
Advance shipping notice (ASN)
- correct answer An electronic acknowledgement of a transaction by a supplier indicating goods shipped,
prices, and other information such as freight costs or taxes.
Adverse interest threat
- correct answer The threat that a CPA will not act with objectivity because the CPA's interests are
opposed to the client's interests.
Adverse opinion
- correct answer Auditors state the financial statements are not fairly presented due to a pervasively
material departure from the applicable financial reporting framework.
Advocacy threat
- correct answer The threat that a CPA will promote a client's interests or position to the point that his
or her objectivity or independence is compromised.
,Allowance for sampling risk (ASR)
- correct answer A measure of the uncertainty associated with not sampling the entire population.
Analytical procedures
- correct answer Evaluations of financial information through analysis of plausible relationships among
both financial and nonfinancial data; analytical procedures also encompass such investigation, as is
necessary, of identified fluctuations or relationships that are inconsistent with other relevant
information or that differ from expected values by a significant amount.
Appropriate
- correct answer Refers to the quality of audit evidence gathered.
Assertions
- correct answer Statements or representations, explicit or implied, made by management regarding the
recognition, measurement, presentation, and disclosure of items included in the financial statements.
Assurance services
- correct answer Independent professional services that improve the quality of information, or its
context, for decision makers.
Attestation services
- correct answer Services performed when an independent practitioner, or CPA, is engaged to issue a
report on subject matter that is the responsibility of another party.
Attribute sampling
- correct answer A sampling technique used to reach a conclusion about a population in terms of a rate
(frequency) of occurrence.
Audit committee
- correct answer A committee of the board of directors responsible for oversight of internal controls,
financial reporting and disclosure in the financial statements, regulatory compliance, and the company's
independent auditors.
,Audit data analytics (ADA)
- correct answer The science and art of discovering and analyzing patterns, identifying anomalies, and
extracting other useful information in data underlying or related to the subject matter of an audit
through analysis, modeling, and visualization for planning and performing the audit.
Audit evidence
- correct answer Information gathered by the auditor that is used when forming an opinion on the fair
presentation of a client's financial statements.
Audit program
- correct answer A listing of details of the audit procedures to be used when testing controls, conducting
detailed substantive audit procedures, and completing the audit.
Audit risk
- correct answer The risk that an auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated.
Audit sampling
- correct answer The selection and evaluation of less than 100% of the population of audit relevance
such that the auditor expects the items selected (the sample) to be representative of the population
and, thus, likely to provide a reasonable basis for conclusions about the population.
Audit services
- correct answer Services by an independent CPA that provide financial statement users with (1) an
opinion on whether the financial statements are presented fairly, in all material respects, in accordance
with an applicable financial reporting framework and, in some cases, (2) an opinion on the effectiveness
of ICFR, which enhances the degree of confidence that intended users can place in the financial
statements.
Audit strategy
- correct answer The determination of the amount of time spent testing the client's internal controls and
conducting detailed testing of transactions and account balances.
Bank confirmation
- correct answer Correspondence sent directly by the auditors to their client's bank requesting
information such as cash held in the bank and details of any loans with the bank and interest rates
charged.
, Basic precision (BP)
- correct answer The amount of estimated misstatement in the population, even if no misstatements are
detected in the sample.
Benchmarking
- correct answer An audit testing strategy that can be used to allow evidence obtained in prior audit
periods to support a conclusion about IT application controls in the current audit period.
Bid rigging
- correct answer An employee assists a vendor in winning a competitive bid for a contract; employee is
compensated, usually in the form of a cash payment.
Bill-and-hold transactions
- correct answer A customer is billed for goods, but goods are not shipped; accounting principles have
very narrow criteria for when revenue can be recognized for a bill-and-hold transaction; the transaction
must be initiated by the customer, and the customer must have a sound economic reason for
purchasing the goods and asking the seller to continue to hold the goods.
Board of directors
- correct answer A group that represents the shareholders and is responsible for ensuring the company
is being run to benefit the shareholders.
Bond trustee
- correct answer A bond trustee is usually a commercial bank or a trust company that is given fiduciary
powers by a bond issuer to enforce the terms of a bond indenture; the trustee sees that bond interest
payments are made as scheduled and protects the interests of the bondholders if the issuer defaults.
Breach of contract
- correct answer A binding agreement is not honored by one or more parties to a contract.
Cash earnings per share (CEPS) ratio
- correct answer Shows cash flow capacity of a company for each common share issued.
