WGU D215 – AUDITING EXAM
QUESTIONS WITH COMPLETE
SOLUTIONS
/.Which type of report should be issued if an auditor has determined that a company has
maintained effective internal controls over financial reporting for the period under audit?
Adverse
Qualified
Disclaimer
Unqualified - Answer-✅Unqualified
/.Which type of work performed by a CPA is an attestation service?
Risk advisory
Website security assurance
Data integrity
Financial statement review - Answer-✅Financial statement review
/.Which entity may obtain audited financial statements to ensure a company is
complying with industry regulations?
Lenders
Consumers
Governments
General public - Answer-✅Governments
/.Which group performs an audit and review of financial statements to ensure financial
statement users' needs are met?
Internal auditors
The Internal Revenue Service (IRS)
Independent third-party auditors
The Financial Accounting Standards Board (FASB) - Answer-✅Independent third-party
auditors
/.A new CPA is aware of how accounting affects stakeholders. Which characteristic of
professionalism is motivating this awareness?
Level of expertise
Advanced certification
,Professional judgment
Concern for the public interest - Answer-✅Concern for the public interest
/.Which component of the AICPA Code of Professional Conduct provides the tenets of
ethical conduct that govern the professional responsibility of its members?
Morals
Principles
Interpretations
Rules of conduct - Answer-✅Principles
/.A CPA firm provides tax services for a large automotive client. Over the years, the
client has continually pushed for aggressive tax strategies that the CPA does not always
agree with. While performing the current year tax return, the client threatens to
discontinue the relationship with the CPA firm if they continue to disagree with the
strategies presented. Which type of threat to ethical decision-making is demonstrated
by this practice?
Self-review
Self-interest
Adverse interest
Undue influence - Answer-✅Undue influence
/.A CPA has prepared a couple's joint tax returns for 10 years, but the couple is now
experiencing a complicated divorce where both parties wish to claim the same child as
a dependent. The CPA agrees to work with both clients on their tax returns. Which
standard of the AICPA Code of Professional Conduct is being violated by this CPA's
action?
Independence
Contingent Fees
Accounting Principles
Integrity and Objectivity - Answer-✅Integrity and Objectivity
/.A large client asks a CPA firm for consulting help with their quarterly sales and use tax
reporting. The CPA firm specializes in audit and tax preparation and has not dealt with
this type of work in the past but would like to add it. The firm decides to accept the job.
Which step is required to maintain compliance with the general standards of the AICPA
Code of Professional Conduct?
The CPA firm must send the CPAs to a continuing professional education course on
sales and use tax reporting.
The CPA firm must be independent of the client to perform consulting services on sales
and use tax reports.
The CPA firm must develop this line of work by adding additional clients who need
assistance with sales and use tax reports.
, The CPA firm must collect sufficient relevant data to complete sales and use tax
reports. - Answer-✅The CPA firm must send the CPAs to a continuing professional
education course on sales and use tax reporting.
/.A junior accountant is providing tax and audit services to a large company that is
pressuring the accountant to reduce the amount of taxes the company owes. The junior
accountant decides to use last year's tax laws instead of the current year's laws since
the older laws will save the company money. Which general standard of the AICPA
Code of Professional Conduct is the junior accountant violating?
Due Professional Care
Sufficient Relevant Data
Planning and Supervision
Professional Competence - Answer-✅Due Professional Care
/.A CPA firm has been retained to audit a client's financial statements. The client's bank
has requested audited financial statements in order to approve or deny a loan to the
client. The client has suggested that the CPA firm will earn a $20,000 bonus if the bank
grants the loan to the client. Which statement characterizes the permissibility of this fee
structure?
The CPA will need to obtain a ruling letter from the AICPA before agreeing to this fee
structure.
This fee structure is not permitted under ethical standards applicable to the auditing
profession.
The CPA will need to obtain written permission from the client's bank before agreeing to
this fee structure.
This fee structure is an acceptable arrangement under ethical standards applicable to
the auditing profession. - Answer-✅This fee structure is not permitted under ethical
standards applicable to the auditing profession.
/.A CPA is auditing a car dealership and is identifying factors that affect the likelihood of
overstated revenue. During which phase of the audit does the CPA take this action?
Reporting
Regulatory
Risk response
Risk assessment - Answer-✅Risk assessment
/.After performing risk assessment procedures and tests of controls, an auditor has
determined that the risk of a material misstatement (RMM) is high. How should the
auditor proceed?
Withdraw from the audit engagement
Select a substantive approach for the audit strategy
Issue a qualified opinion in the auditor's report
QUESTIONS WITH COMPLETE
SOLUTIONS
/.Which type of report should be issued if an auditor has determined that a company has
maintained effective internal controls over financial reporting for the period under audit?
Adverse
Qualified
Disclaimer
Unqualified - Answer-✅Unqualified
/.Which type of work performed by a CPA is an attestation service?
Risk advisory
Website security assurance
Data integrity
Financial statement review - Answer-✅Financial statement review
/.Which entity may obtain audited financial statements to ensure a company is
complying with industry regulations?
Lenders
Consumers
Governments
General public - Answer-✅Governments
/.Which group performs an audit and review of financial statements to ensure financial
statement users' needs are met?
Internal auditors
The Internal Revenue Service (IRS)
Independent third-party auditors
The Financial Accounting Standards Board (FASB) - Answer-✅Independent third-party
auditors
/.A new CPA is aware of how accounting affects stakeholders. Which characteristic of
professionalism is motivating this awareness?
Level of expertise
Advanced certification
,Professional judgment
Concern for the public interest - Answer-✅Concern for the public interest
/.Which component of the AICPA Code of Professional Conduct provides the tenets of
ethical conduct that govern the professional responsibility of its members?
Morals
Principles
Interpretations
Rules of conduct - Answer-✅Principles
/.A CPA firm provides tax services for a large automotive client. Over the years, the
client has continually pushed for aggressive tax strategies that the CPA does not always
agree with. While performing the current year tax return, the client threatens to
discontinue the relationship with the CPA firm if they continue to disagree with the
strategies presented. Which type of threat to ethical decision-making is demonstrated
by this practice?
Self-review
Self-interest
Adverse interest
Undue influence - Answer-✅Undue influence
/.A CPA has prepared a couple's joint tax returns for 10 years, but the couple is now
experiencing a complicated divorce where both parties wish to claim the same child as
a dependent. The CPA agrees to work with both clients on their tax returns. Which
standard of the AICPA Code of Professional Conduct is being violated by this CPA's
action?
Independence
Contingent Fees
Accounting Principles
Integrity and Objectivity - Answer-✅Integrity and Objectivity
/.A large client asks a CPA firm for consulting help with their quarterly sales and use tax
reporting. The CPA firm specializes in audit and tax preparation and has not dealt with
this type of work in the past but would like to add it. The firm decides to accept the job.
Which step is required to maintain compliance with the general standards of the AICPA
Code of Professional Conduct?
The CPA firm must send the CPAs to a continuing professional education course on
sales and use tax reporting.
The CPA firm must be independent of the client to perform consulting services on sales
and use tax reports.
The CPA firm must develop this line of work by adding additional clients who need
assistance with sales and use tax reports.
, The CPA firm must collect sufficient relevant data to complete sales and use tax
reports. - Answer-✅The CPA firm must send the CPAs to a continuing professional
education course on sales and use tax reporting.
/.A junior accountant is providing tax and audit services to a large company that is
pressuring the accountant to reduce the amount of taxes the company owes. The junior
accountant decides to use last year's tax laws instead of the current year's laws since
the older laws will save the company money. Which general standard of the AICPA
Code of Professional Conduct is the junior accountant violating?
Due Professional Care
Sufficient Relevant Data
Planning and Supervision
Professional Competence - Answer-✅Due Professional Care
/.A CPA firm has been retained to audit a client's financial statements. The client's bank
has requested audited financial statements in order to approve or deny a loan to the
client. The client has suggested that the CPA firm will earn a $20,000 bonus if the bank
grants the loan to the client. Which statement characterizes the permissibility of this fee
structure?
The CPA will need to obtain a ruling letter from the AICPA before agreeing to this fee
structure.
This fee structure is not permitted under ethical standards applicable to the auditing
profession.
The CPA will need to obtain written permission from the client's bank before agreeing to
this fee structure.
This fee structure is an acceptable arrangement under ethical standards applicable to
the auditing profession. - Answer-✅This fee structure is not permitted under ethical
standards applicable to the auditing profession.
/.A CPA is auditing a car dealership and is identifying factors that affect the likelihood of
overstated revenue. During which phase of the audit does the CPA take this action?
Reporting
Regulatory
Risk response
Risk assessment - Answer-✅Risk assessment
/.After performing risk assessment procedures and tests of controls, an auditor has
determined that the risk of a material misstatement (RMM) is high. How should the
auditor proceed?
Withdraw from the audit engagement
Select a substantive approach for the audit strategy
Issue a qualified opinion in the auditor's report
