WGU D215 Auditing Study Guide Questions and
Answers with Complete Solutions | New Update
2026/27
Ability of cash flow from operations to cover current debt and dividends -
ANSWERS Measures ability to cover current debt maturities and dividends
with operating cash flow.
Accounting estimate - ANSWERS An approximation of a monetary amount
when a precise means of measurement is not available.
Accounting records - ANSWERS Client's records of the initial accounting entry
and supporting documents.
Acid-test (quick) ratio - ANSWERS Measures ability to meet short-term
obligations with liquid assets such as cash, short-term investments, and
receivables.
Advance shipping notice (ASN) - ANSWERS 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 - ANSWERS The threat that a CPA will not act with
objectivity because the CPA's interests are opposed to the client's interests.
,Adverse opinion - ANSWERS Auditors state the financial statements are not
fairly presented due to a pervasively material departure from the applicable
financial reporting framework.
Advocacy threat - ANSWERS 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) - ANSWERS A measure of the uncertainty
associated with not sampling the entire population.
Analytical procedures - ANSWERS 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 - ANSWERS Refers to the quality of audit evidence gathered.
Assertions - ANSWERS 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 - ANSWERS Independent professional services that
improve the quality of information, or its context, for decision makers.
,Attestation services - ANSWERS 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 - ANSWERS A sampling technique used to reach a
conclusion about a population in terms of a rate (frequency) of occurrence.
Audit committee - ANSWERS 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) - ANSWERS 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 - ANSWERS Information gathered by the auditor that is used
when forming an opinion on the fair presentation of a client's financial
statements.
Audit program - ANSWERS 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 - ANSWERS The risk that an auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
, Audit sampling - ANSWERS 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 - ANSWERS 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 - ANSWERS 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 - ANSWERS 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) - ANSWERS The amount of estimated misstatement in the
population, even if no misstatements are detected in the sample.
Benchmarking - ANSWERS 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.
Answers with Complete Solutions | New Update
2026/27
Ability of cash flow from operations to cover current debt and dividends -
ANSWERS Measures ability to cover current debt maturities and dividends
with operating cash flow.
Accounting estimate - ANSWERS An approximation of a monetary amount
when a precise means of measurement is not available.
Accounting records - ANSWERS Client's records of the initial accounting entry
and supporting documents.
Acid-test (quick) ratio - ANSWERS Measures ability to meet short-term
obligations with liquid assets such as cash, short-term investments, and
receivables.
Advance shipping notice (ASN) - ANSWERS 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 - ANSWERS The threat that a CPA will not act with
objectivity because the CPA's interests are opposed to the client's interests.
,Adverse opinion - ANSWERS Auditors state the financial statements are not
fairly presented due to a pervasively material departure from the applicable
financial reporting framework.
Advocacy threat - ANSWERS 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) - ANSWERS A measure of the uncertainty
associated with not sampling the entire population.
Analytical procedures - ANSWERS 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 - ANSWERS Refers to the quality of audit evidence gathered.
Assertions - ANSWERS 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 - ANSWERS Independent professional services that
improve the quality of information, or its context, for decision makers.
,Attestation services - ANSWERS 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 - ANSWERS A sampling technique used to reach a
conclusion about a population in terms of a rate (frequency) of occurrence.
Audit committee - ANSWERS 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) - ANSWERS 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 - ANSWERS Information gathered by the auditor that is used
when forming an opinion on the fair presentation of a client's financial
statements.
Audit program - ANSWERS 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 - ANSWERS The risk that an auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated.
, Audit sampling - ANSWERS 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 - ANSWERS 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 - ANSWERS 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 - ANSWERS 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) - ANSWERS The amount of estimated misstatement in the
population, even if no misstatements are detected in the sample.
Benchmarking - ANSWERS 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.
