D251 WGU 2025 EXAM QUESTIONS AND
CORRECT ANSWERS!!
What is materiality level that an auditor uses for determining significant accounts,
significant locations, and audit procedures for those accounts and locations?
a. Planning Materiality
b. Overall Materiality
c. Posting Materiality
d. Performance Materiality
d. Performance Materiality
An auditor has determined performance materiality has been set too high at the beginning
of the audit. Which procedures should this auditor consider to detect misstatements?
a. The auditor should perform additional substantive audit procedures
b. The auditor should perform additional control audit procedures.
c. The auditor should perform fewer control audit procedures
d. The auditor should perform fewer substantive procedures
a. The auditor should perform additional substantive audit procedures
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?
a. Client business risk
b. Auditor business risk
c. Engagement risk
d. Risk of material misstatement
d. Risk of material misstatement
What represents an identified and assessed risk of material misstatement that requires
special audit consideration?
,a. Audit risk
b. Significant risk
c. Control risk
d. Inherent risk
b. Significant risk
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?
a. The acceptable audit risk is zero
b. The acceptable audit risk is reduced
c. The acceptable audit risk is increased
d. The acceptable audit risk remains the same
b. The acceptable audit risk is reduced
Which factor should lead an auditor to assess inherent risk as high?
a. The account balance consists of a high volume of routine transactions
b. The account balance consists of a large number of complex transactions
c. The account balance is subject to a large number of routine year-end adjustments
d. The account balance requires a high level of client estimation, which the auditor has
audited
b. The account balance consists of a large number of complex transactions
Which factor would lead an auditor to assess client business risk at a higher level?
a. The overall business climate for the client appears to be mixed for the foreseeable future
b. The client has hired somewhat experienced personnel to deal with industry changes
c. The client's use of information technology is incompatible across systems and processes
d. The client has developed technology-related partnerships
, c. The client's use of information technology is incompatible across systems and processes
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?
a. $1,000,000
b. 75% of $1,000,000
c. 75% of $500,000
d. $500,000
c. 75% of $500,00
At which percentage do auditors commonly set posting materiality?
a. 5 % of planning materiality
b. 6 % of performance materiality
c. 5 % of performance materiality
d. 6 % of planning materiality
a. 5 % of planning materiality
What is quantitative evaluation?
a. Determining whether sample failures are systematic or random
b. Determining the level at which a control's failure to operate effectively would likely be
present in the remainder of the population
c. Determining whether sample failures are intentional or unintentional
d. Determining whether the upper limit of the possible deviation rate exceeds the tolerable
deviation rate
d. Determining whether the upper limit of the possible deviation rate exceeds the tolerable
deviation rate
CORRECT ANSWERS!!
What is materiality level that an auditor uses for determining significant accounts,
significant locations, and audit procedures for those accounts and locations?
a. Planning Materiality
b. Overall Materiality
c. Posting Materiality
d. Performance Materiality
d. Performance Materiality
An auditor has determined performance materiality has been set too high at the beginning
of the audit. Which procedures should this auditor consider to detect misstatements?
a. The auditor should perform additional substantive audit procedures
b. The auditor should perform additional control audit procedures.
c. The auditor should perform fewer control audit procedures
d. The auditor should perform fewer substantive procedures
a. The auditor should perform additional substantive audit procedures
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?
a. Client business risk
b. Auditor business risk
c. Engagement risk
d. Risk of material misstatement
d. Risk of material misstatement
What represents an identified and assessed risk of material misstatement that requires
special audit consideration?
,a. Audit risk
b. Significant risk
c. Control risk
d. Inherent risk
b. Significant risk
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?
a. The acceptable audit risk is zero
b. The acceptable audit risk is reduced
c. The acceptable audit risk is increased
d. The acceptable audit risk remains the same
b. The acceptable audit risk is reduced
Which factor should lead an auditor to assess inherent risk as high?
a. The account balance consists of a high volume of routine transactions
b. The account balance consists of a large number of complex transactions
c. The account balance is subject to a large number of routine year-end adjustments
d. The account balance requires a high level of client estimation, which the auditor has
audited
b. The account balance consists of a large number of complex transactions
Which factor would lead an auditor to assess client business risk at a higher level?
a. The overall business climate for the client appears to be mixed for the foreseeable future
b. The client has hired somewhat experienced personnel to deal with industry changes
c. The client's use of information technology is incompatible across systems and processes
d. The client has developed technology-related partnerships
, c. The client's use of information technology is incompatible across systems and processes
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?
a. $1,000,000
b. 75% of $1,000,000
c. 75% of $500,000
d. $500,000
c. 75% of $500,00
At which percentage do auditors commonly set posting materiality?
a. 5 % of planning materiality
b. 6 % of performance materiality
c. 5 % of performance materiality
d. 6 % of planning materiality
a. 5 % of planning materiality
What is quantitative evaluation?
a. Determining whether sample failures are systematic or random
b. Determining the level at which a control's failure to operate effectively would likely be
present in the remainder of the population
c. Determining whether sample failures are intentional or unintentional
d. Determining whether the upper limit of the possible deviation rate exceeds the tolerable
deviation rate
d. Determining whether the upper limit of the possible deviation rate exceeds the tolerable
deviation rate
