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PRE-ASSESSMENT: AUDITING (WJC1) PWJC
Attempt #1
Status: Passed
1.
Match the stakeholder with the benefit produced when high-quality, reliable information is
provided to that individual.
Answer options may be used more than once or not at all.
YOUR CORRECT
ANSWER ANSWER
The information helps The information helps this
this individual to reduce individual to reduce infor-
Potential investor information asymmetry, mation asymmetry, which
which helps to maximize helps to maximize the capi-
the capital raised. tal raised.
The information enables The information enables
this individual to provide this individual to provide
Financial analyst
high-quality investment high-quality investment
recommendations. recommendations.
The information enables
The information enables
this individual to obtain
this individual to obtain an
A lending officer an interest rate that is
interest rate that is repre-
representative of default
sentative of default risk.
risk.
The information allows The information allows this
this individual to expand a individual to expand a busi-
Inventory vendor
business by purchasing ness by purchasing goods
goods on credit. on credit.
2.
What is a benefit of having an auditor perform an audit of the financial statements?
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YOUR CORRECT
ANSWER ANSWER
To increase management's compensation
To increase the reliability of the information
To increase materiality of the financial report
To increase the value of the firm's common stock
3.
Why does the use of an auditor improve the reliability of financial information?
Choose 2 answers
YOUR CORRECT
ANSWER ANSWER
The auditor is an independent party.
The auditor’s review increases information asymmetry.
The auditor will detect any occurrences of fraud during the period.
The auditor may detect misstatements that management has missed.
4.
Match the definition with the term.
Answer options may be used more than once or not at all.
YOUR CORRECT
ANSWER ANSWER
A type of service in which Audit service Attest service
a certified public account-
ant (CPA) provides a writ-
ten report providing as-
surance regarding a sub-
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YOUR CORRECT
ANSWER ANSWER
ject matter that is the re-
sponsibility of another
party
A type of service in which
an independent profes-
sional improves the quali- Assurance service Assurance service
ty of information for deci-
sion makers
A service in which a certi-
fied public accountant
(CPA) obtains and evalu-
Attest service Audit service
ates evidence and pro-
vides a high level of assur-
ance
5.
Which characteristic is an auditor demonstrating if the auditor performs an audit with a
questioning mind?
YOUR CORRECT
ANSWER ANSWER
Objectivity
Competence
Professional skepticism
Understanding of their role
6.
Why is it necessary to create a framework of converging standards to govern audits?
YOUR CORRECT
ANSWER ANSWER
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YOUR CORRECT
ANSWER ANSWER
To endorse substance over form of audits
To improve consistency and quality of audits
To promote opportunity and popularity of audits
To establish separate standards for each country's audits
7.
What was the catalyst for establishing well-defined standards that evolve over time for auditing
procedures?
YOUR CORRECT
ANSWER ANSWER
The need for high-quality audits
The need for relevant financial reports
The need to increase auditor competence
The need to decrease the frequency of audits
8.
Which organization has the power to impose penalties or fines on auditors of publicly traded
companies but does not directly issue auditing standards?
YOUR CORRECT
ANSWER ANSWER
Auditing Standards Board (ASB)
International Auditing and Assurance Standards Board (IAASB)
Securities and Exchange Commission (SEC)
Public Company Accounting Oversight Board (PCAOB)
https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/400095/assessm... 4/13/2019
PRE-ASSESSMENT: AUDITING (WJC1) PWJC
Attempt #1
Status: Passed
1.
Match the stakeholder with the benefit produced when high-quality, reliable information is
provided to that individual.
Answer options may be used more than once or not at all.
YOUR CORRECT
ANSWER ANSWER
The information helps The information helps this
this individual to reduce individual to reduce infor-
Potential investor information asymmetry, mation asymmetry, which
which helps to maximize helps to maximize the capi-
the capital raised. tal raised.
The information enables The information enables
this individual to provide this individual to provide
Financial analyst
high-quality investment high-quality investment
recommendations. recommendations.
The information enables
The information enables
this individual to obtain
this individual to obtain an
A lending officer an interest rate that is
interest rate that is repre-
representative of default
sentative of default risk.
risk.
The information allows The information allows this
this individual to expand a individual to expand a busi-
Inventory vendor
business by purchasing ness by purchasing goods
goods on credit. on credit.
2.
What is a benefit of having an auditor perform an audit of the financial statements?
https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/400095/assessm... 4/13/2019
,WGU Student Portal | Coaching Report Page 2 of 38
YOUR CORRECT
ANSWER ANSWER
To increase management's compensation
To increase the reliability of the information
To increase materiality of the financial report
To increase the value of the firm's common stock
3.
Why does the use of an auditor improve the reliability of financial information?
Choose 2 answers
YOUR CORRECT
ANSWER ANSWER
The auditor is an independent party.
The auditor’s review increases information asymmetry.
The auditor will detect any occurrences of fraud during the period.
The auditor may detect misstatements that management has missed.
4.
Match the definition with the term.
Answer options may be used more than once or not at all.
YOUR CORRECT
ANSWER ANSWER
A type of service in which Audit service Attest service
a certified public account-
ant (CPA) provides a writ-
ten report providing as-
surance regarding a sub-
https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/400095/assessm... 4/13/2019
,WGU Student Portal | Coaching Report Page 3 of 38
YOUR CORRECT
ANSWER ANSWER
ject matter that is the re-
sponsibility of another
party
A type of service in which
an independent profes-
sional improves the quali- Assurance service Assurance service
ty of information for deci-
sion makers
A service in which a certi-
fied public accountant
(CPA) obtains and evalu-
Attest service Audit service
ates evidence and pro-
vides a high level of assur-
ance
5.
Which characteristic is an auditor demonstrating if the auditor performs an audit with a
questioning mind?
YOUR CORRECT
ANSWER ANSWER
Objectivity
Competence
Professional skepticism
Understanding of their role
6.
Why is it necessary to create a framework of converging standards to govern audits?
YOUR CORRECT
ANSWER ANSWER
https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/400095/assessm... 4/13/2019
, WGU Student Portal | Coaching Report Page 4 of 38
YOUR CORRECT
ANSWER ANSWER
To endorse substance over form of audits
To improve consistency and quality of audits
To promote opportunity and popularity of audits
To establish separate standards for each country's audits
7.
What was the catalyst for establishing well-defined standards that evolve over time for auditing
procedures?
YOUR CORRECT
ANSWER ANSWER
The need for high-quality audits
The need for relevant financial reports
The need to increase auditor competence
The need to decrease the frequency of audits
8.
Which organization has the power to impose penalties or fines on auditors of publicly traded
companies but does not directly issue auditing standards?
YOUR CORRECT
ANSWER ANSWER
Auditing Standards Board (ASB)
International Auditing and Assurance Standards Board (IAASB)
Securities and Exchange Commission (SEC)
Public Company Accounting Oversight Board (PCAOB)
https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/400095/assessm... 4/13/2019
