WGU C254 Topic 4 Exam 2026 Questions
and Answers
Revenues and Accounts Receivable - Correct answer-Which are the two most
commonly manipulated to perpetrate financial statement fraud?
True - Correct answer-SAS 99 requires auditors to assume there are material
misstatements in revenue, though realizing there are situation-specific methods to
recognize revenue and interpret the associated rules.
Revenue - Correct answer-Barry Minkow (a convicted fraudster) said:
"Receivables are a wonderful thing - you create a receivable and you have
________________."
True - Correct answer-Stuffing distribution channels with promises to take back
excess inventory free of charge directly violates GAAP revenue recognition rules.
Overstate Receivables and Net Income - Correct answer-Understating the
Allowance for Doubtful Accounts allows fraudsters to
False
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, Most of the time only symptoms, indicators and red flags are observable - Correct
answer-Auditors can usually quickly detect fraud because when it's committed, it's
obvious.
Analytical Symptoms - Correct answer-Symptoms involving activities,
relationships, or unusual events (too big, too small, off-season, etc.) are part of
which fraud symptom category?
True - Correct answer-Changes in behavior can be an excellent indicator of a first-
time offender of fraud.
All of the above - Correct answer-Which of the following are considered Control
Fraud Symptoms?
a. Management override of significant internal controls relating to the revenue
cycle
b. New, unusual, or large clients that appear to have bypassed usual customer-
approval process
c. All of the above
d. None of the above
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and Answers
Revenues and Accounts Receivable - Correct answer-Which are the two most
commonly manipulated to perpetrate financial statement fraud?
True - Correct answer-SAS 99 requires auditors to assume there are material
misstatements in revenue, though realizing there are situation-specific methods to
recognize revenue and interpret the associated rules.
Revenue - Correct answer-Barry Minkow (a convicted fraudster) said:
"Receivables are a wonderful thing - you create a receivable and you have
________________."
True - Correct answer-Stuffing distribution channels with promises to take back
excess inventory free of charge directly violates GAAP revenue recognition rules.
Overstate Receivables and Net Income - Correct answer-Understating the
Allowance for Doubtful Accounts allows fraudsters to
False
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
, Most of the time only symptoms, indicators and red flags are observable - Correct
answer-Auditors can usually quickly detect fraud because when it's committed, it's
obvious.
Analytical Symptoms - Correct answer-Symptoms involving activities,
relationships, or unusual events (too big, too small, off-season, etc.) are part of
which fraud symptom category?
True - Correct answer-Changes in behavior can be an excellent indicator of a first-
time offender of fraud.
All of the above - Correct answer-Which of the following are considered Control
Fraud Symptoms?
a. Management override of significant internal controls relating to the revenue
cycle
b. New, unusual, or large clients that appear to have bypassed usual customer-
approval process
c. All of the above
d. None of the above
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
