WGU D251 - Advanced Auditing Exam Latest

WGU D251 - Advanced Auditing Exam Latest Update 2024-2025 355 Questions and 100% Verified Correct Answers Guaranteed A+ A vendor's invoice received and held by the client would be considered what type of evidence?

• External

B.Internal

• External-internal

D. Written representation - CORRECT ANSWER: C. External-internal

According to PCAOB Auditing Standard No. 2201 (AS 2201), the auditor should identify significant accounts and disclosures and their relevant assertions. Which of the following financial statement assertions is not explicitly identified in AS 2201?

A: Completeness.

B: Valuation or allocation.

C: Accuracy.

D: Existence or occurrence.

E: All of these are assertions identified in AS 5. - CORRECT ANSWER: C: Accuracy.

After obtaining an understanding of internal controls and assessing control risk on the audit of a non-public company, an auditor decided to perform tests of controls. The

auditor most likely decided that:

• there were many internal control weaknesses that could allow errors to enter the

accounting system.

• an increase in the assessed level of control risk is justified for certain financial

statement assertions.

• additional evidence to support a further reduction in control risk is not available.

• it would be efficient to perform tests of controls that would result in a reduction in

planned substantive tests. - CORRECT ANSWER: D. it would be efficient to perform tests of controls that would result in a reduction in planned substantive tests.

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all transactions and events that should have been recorded have been recorded and all related disclosures that should have been included in the financial statements have

been included. - CORRECT ANSWER: Completeness

amounts and other data relating to recorded transactions and events have been recorded appropriately, and related disclosures have been appropriately measured and

described. - CORRECT ANSWER: Accuracy

An audit engagement letter should normally include which of the following matters of agreement between the auditor and the client?

• Schedules and analyses to be prepared by the client's employees.

• Methods of statistical sampling the auditor will use.

• Client representations about availability of all minutes of meetings of the board of

directors.

• Specification of litigation in progress against the client. - CORRECT ANSWER: A.

Schedules and analyses to be prepared by the client's employees.

An auditor is considering whether the omission of the confirmation of investments impairs the auditor's ability to support a previously expressed unmodified opinion. The

auditor need not perform this omitted procedure if:

• the results of alternative procedures that were performed compensate for the

omission.

• the omission is documented in a communication with the audit committee.

• no individual investment is material to the financial statements taken as a whole.

• the auditor's assessed level of detection risk is low. - CORRECT ANSWER: A. the

results of alternative procedures that were performed compensate for the omission.

An auditor noted that client sales increased 10 percent for the year. At the same time, Cost of Goods Sold as a percentage of sales had decreased from 45 percent to 40 percent and year-end accounts receivable had increased by 8 percent. Based on this

information, the auditor is most likely concerned about:

• Unrecorded costs.

• Fictitious sales.

• Improper credit approvals.
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D. Improper sales cutoff. - CORRECT ANSWER: B. Fictitious sales.

Analytical procedures used when planning an audit should concentrate on:

• Accounts and relationships that can represent specific potential problems and risks in

the financial statements.

• Predictability of account balances based on individual significant transactions.

• Management assertions in financial statements.

• Weaknesses in the company's internal control activities. - CORRECT ANSWER: A.

Accounts and relationships that can represent specific potential problems and risks in the financial statements.

Assurance services involve all of the following, except:

A: relevance as well as the reliability of information.

B: non financial information as well as traditional financial statements.

C: providing absolute rather than reasonable assurance.

D: electronic databases as well as printed reports. - CORRECT ANSWER: C: providing absolute rather than reasonable assurance.

Embezzlement is a type of fraud that involves:

• A manager's falsification of financial statements for the purpose of misleading

investors and creditors.

• An employee's mistaken representation of opinion that causes incorrect accounting

entries.

• An employee's misappropriating an employer's money or property not entrusted to

him or her.

• An employee misappropriating an employer's money or property entrusted to the

employee's control in the employee's normal job. - CORRECT ANSWER: D. An

employee misappropriating an employer's money or property entrusted to the employee's control in the employee's normal job.

For each error/control objective, identify the assertion about classes of transactions and events most benefited by the control.

• Sales recorded, goods not shipped 3 / 4

• Goods shipped, sales not recorded

• Goods shipped to a bad credit risk customer

• Sales billed at the wrong price or wrong quantity

• Product line A sales recorded as Product line B

• Failure to post charges to customers for sales

g. January sales recorded in December - CORRECT ANSWER: a. occurence

• completeness

• accuracy

• accuracy

• classification

• completeness

• cutoff

Immediately upon receipt of cash, a responsible employee should:

• Record the amount in the cash receipts journal.

• Prepare a remittance listing.

• Prepare a deposit slip in triplicate.

D. Update the subsidiary accounts receivable records. - CORRECT ANSWER: B.

Prepare a remittance listing.

Incorporating elements of unpredictability in the selection of audit procedures to be

performed by auditors include all of the following except:

• Varying the timing of the audit procedures.

• Selecting items for testing that have lower amounts or are otherwise outside

customary selection parameters.

• Performing audit procedures on an unannounced basis.
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