WGU D251 ADVANCED AUDITING 2024 NEWEST EXAM
AND PRACTICE EXAM 400 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT) /A+ GRADE
ASSURED
Data Analytics - ANSWER: The process of obtaining, cleaning, transforming, and then
using data to identify and communicate meaningful patterns, trends, outliers, and
information in support of decision making ; Process of using technology to transform
data into information
Why is Data Analytics becoming more widespread - ANSWER: analyzing very large
datasets draw meaningful conclusions; advances in technology enable data to be
analyzed by more affordable and user-friendly software
Audit Data Analytics - ANSWER: The science and art of using analysis, modeling and
visualization to discover and analyze patterns, anomalies, and other information for
the purpose of planning and performing an audit
ADA's What is new/not new? - ANSWER: Using technology in the audit - not new;
accounting firms expect new audit associates to have some exposure to ADA's and
how to perform and understand their outputs in the context of the audit - new
Why does the effective use of ADA's go beyond IT skills or the use of software tool -
ANSWER: Effective use of ADA's requires combining technological skills and
knowledge of accounting and auditing and a sound understanding of the entity and
potential risk of misstatement
Two technological advances that reduced the number of times an auditor needs to
apply sampling techniques - ANSWER: Development of well-controlled, automated
accounting systems; powerful audit software to entire populations of data
Why will some sampling always be required? - ANSWER: Control processes require
human involvement; testing procedures require the auditor to physically inspect an
asset; required to obtain and evaluate evidence from third parties
Attribute Sampling - ANSWER: Used to estimate the proportion of a population that
possesses a specified characteristic
Desired Confidence Level - ANSWER: The desired level of assurance that the sample
results will support a conclusion that the control is functioning effectively
Allowance for Sampling Risk - ANSWER: the difference between expected and
tolerable deviation rate.
, Sampling Risk - ANSWER: The possibility that the sample drawn is not representative
of the population
Sampling Population - ANSWER: all or a subset of the items that constitute the class
of transactions
Nonstatistical Sampling - ANSWER: Allows the use of random or systematic selection,
but also permits the use of other methods such as haphazard sampling
Tolerable Deviation Rate - ANSWER: The maximum deviation rate from a prescribed
control that the auditor is willing to accept
Basic Precision - ANSWER: The difference between the expected and tolerable
deviation rates
Risk of Incorrect Rejection (Type I) - ANSWER: Internal Controls - Control is not
operating effectively when it is
Substantive Testing - Recorded balance is misstated when it is not
Relates to Efficiency
Risk of Incorrect Acceptance (Type II) - ANSWER: Internal Controls - Control is
operating effectively when it is not
Substantive Testing - Recorded balance is not misstated when it is
Relates to Effectiveness
Statistical Sampling - ANSWER: Uses the laws of probability to compute sample size
and evaluate results
Advantages of Statistical Sampling - ANSWER: 1. Design an efficient sample
2. Measure the sufficiency of evidence obtained
3. Quantify sampling risk
Disadvantages of Statistical Sampling - ANSWER: Cost of training auditors
Cost to design and conduct sampling application
Lack of consistent application
nonstatistical sampling - ANSWER: the auditor does not use statistical techniques to
determine sample size, select the sample items, or measure sampling risk
Relationship of Desired Confidence Level - ANSWER: Direct
Lower - Decrease
Higher - Increase
Relationship of Tolerable Misstatement - ANSWER: Inverse
Lower - Increase
Higher - Decrease
AND PRACTICE EXAM 400 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT) /A+ GRADE
ASSURED
Data Analytics - ANSWER: The process of obtaining, cleaning, transforming, and then
using data to identify and communicate meaningful patterns, trends, outliers, and
information in support of decision making ; Process of using technology to transform
data into information
Why is Data Analytics becoming more widespread - ANSWER: analyzing very large
datasets draw meaningful conclusions; advances in technology enable data to be
analyzed by more affordable and user-friendly software
Audit Data Analytics - ANSWER: The science and art of using analysis, modeling and
visualization to discover and analyze patterns, anomalies, and other information for
the purpose of planning and performing an audit
ADA's What is new/not new? - ANSWER: Using technology in the audit - not new;
accounting firms expect new audit associates to have some exposure to ADA's and
how to perform and understand their outputs in the context of the audit - new
Why does the effective use of ADA's go beyond IT skills or the use of software tool -
ANSWER: Effective use of ADA's requires combining technological skills and
knowledge of accounting and auditing and a sound understanding of the entity and
potential risk of misstatement
Two technological advances that reduced the number of times an auditor needs to
apply sampling techniques - ANSWER: Development of well-controlled, automated
accounting systems; powerful audit software to entire populations of data
Why will some sampling always be required? - ANSWER: Control processes require
human involvement; testing procedures require the auditor to physically inspect an
asset; required to obtain and evaluate evidence from third parties
Attribute Sampling - ANSWER: Used to estimate the proportion of a population that
possesses a specified characteristic
Desired Confidence Level - ANSWER: The desired level of assurance that the sample
results will support a conclusion that the control is functioning effectively
Allowance for Sampling Risk - ANSWER: the difference between expected and
tolerable deviation rate.
, Sampling Risk - ANSWER: The possibility that the sample drawn is not representative
of the population
Sampling Population - ANSWER: all or a subset of the items that constitute the class
of transactions
Nonstatistical Sampling - ANSWER: Allows the use of random or systematic selection,
but also permits the use of other methods such as haphazard sampling
Tolerable Deviation Rate - ANSWER: The maximum deviation rate from a prescribed
control that the auditor is willing to accept
Basic Precision - ANSWER: The difference between the expected and tolerable
deviation rates
Risk of Incorrect Rejection (Type I) - ANSWER: Internal Controls - Control is not
operating effectively when it is
Substantive Testing - Recorded balance is misstated when it is not
Relates to Efficiency
Risk of Incorrect Acceptance (Type II) - ANSWER: Internal Controls - Control is
operating effectively when it is not
Substantive Testing - Recorded balance is not misstated when it is
Relates to Effectiveness
Statistical Sampling - ANSWER: Uses the laws of probability to compute sample size
and evaluate results
Advantages of Statistical Sampling - ANSWER: 1. Design an efficient sample
2. Measure the sufficiency of evidence obtained
3. Quantify sampling risk
Disadvantages of Statistical Sampling - ANSWER: Cost of training auditors
Cost to design and conduct sampling application
Lack of consistent application
nonstatistical sampling - ANSWER: the auditor does not use statistical techniques to
determine sample size, select the sample items, or measure sampling risk
Relationship of Desired Confidence Level - ANSWER: Direct
Lower - Decrease
Higher - Increase
Relationship of Tolerable Misstatement - ANSWER: Inverse
Lower - Increase
Higher - Decrease
