WGU D251 UPDATED ACTUAL Questions and CORRECT
Answers
Performance materiality What is the materiality level that an auditor uses for determining significant
accounts, significant locations, and audit procedures for those accounts and
locations?
The auditor should perform additional substantive audit An auditor has determined performance materiality has been set too high at the
procedures beginning of the audit. Which procedures should this auditor consider to detect
misstatements?
Risk of material misstatement Which risk exists at the overall financial statement level and at the assertion level
and can be categorized as involving inherent risk and control risk?
Significant risk What represents an identified and assessed risk of material misstatement that
requires special audit consideration?
The acceptable audit risk is reduced. What is the impact on the amount of acceptable audit risk if an auditor believes
the chance of financial failure of a client is high?
The account balance consists of a large number of Which factor should lead an auditor to assess inherent risk as high?
complex transactions.
The client's use of information technology is incompatible Which factor would lead an auditor to assess client business risk at a higher level?
across systems and processes.
75% of $500,000 An auditor determines overall materiality of $500,000 would be material to the
income statement and $1,000,000 would be material to the balance sheet. Which
amount would an auditor typically assess performance materiality to be for this
client?
5% of planning materiality At which percentage do auditors commonly set posting materiality?
Determining whether the upper limit of the possible What is quantitative evaluation?
deviation rate exceeds the tolerable deviation rate
When the total estimated misstatement exceeds the In which circumstance would an auditor change an audit objective to estimating
tolerable misstatement the correct value?
The percentage of misstatement present in a logical unit What describes tainting percentage?
95% confidence level that the actual rate of deviation will Which statement reflects a 5% risk of overreliance?
not exceed the tolerable deviation
To determine whether controls are operating effectively What is the objective of sampling when testing controls?
To identify overstatement errors What is the primary objective of monetary unit sampling?
Answers
Performance materiality What is the materiality level that an auditor uses for determining significant
accounts, significant locations, and audit procedures for those accounts and
locations?
The auditor should perform additional substantive audit An auditor has determined performance materiality has been set too high at the
procedures beginning of the audit. Which procedures should this auditor consider to detect
misstatements?
Risk of material misstatement Which risk exists at the overall financial statement level and at the assertion level
and can be categorized as involving inherent risk and control risk?
Significant risk What represents an identified and assessed risk of material misstatement that
requires special audit consideration?
The acceptable audit risk is reduced. What is the impact on the amount of acceptable audit risk if an auditor believes
the chance of financial failure of a client is high?
The account balance consists of a large number of Which factor should lead an auditor to assess inherent risk as high?
complex transactions.
The client's use of information technology is incompatible Which factor would lead an auditor to assess client business risk at a higher level?
across systems and processes.
75% of $500,000 An auditor determines overall materiality of $500,000 would be material to the
income statement and $1,000,000 would be material to the balance sheet. Which
amount would an auditor typically assess performance materiality to be for this
client?
5% of planning materiality At which percentage do auditors commonly set posting materiality?
Determining whether the upper limit of the possible What is quantitative evaluation?
deviation rate exceeds the tolerable deviation rate
When the total estimated misstatement exceeds the In which circumstance would an auditor change an audit objective to estimating
tolerable misstatement the correct value?
The percentage of misstatement present in a logical unit What describes tainting percentage?
95% confidence level that the actual rate of deviation will Which statement reflects a 5% risk of overreliance?
not exceed the tolerable deviation
To determine whether controls are operating effectively What is the objective of sampling when testing controls?
To identify overstatement errors What is the primary objective of monetary unit sampling?
