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C254 WGU Practice Review (Questions & Answers) Rated 100% Correct!!
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C254 WGU Practice Review (Questions & Answers) Rated 100% Correct!!
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Name: Score:262 Multiple choice questions
Term 1 of 262
Which of the following would not typically be used as potential sources of information regarding
inadequate disclosures?
Confirmations from tax authorities (e.g., the IRS)
Invoices from attorneys
Board of Director minutes
Loan agreements
Term 2 of 262
The Bre-X disclosure fraud involved promises that are conceptually similar to the promises made
in investment scams and Ponzi schemes.
True
False
Term 3 of 262
By increasing sample size, the auditor is decreasing the ________________ .
Professional skepticism
Chance to catch fraud
Confidence there is no fraud
Risking of missing fraud
,Term 4 of 262
What can indicate potential fraud related to an overstatement of inventory?
Cost of goods sold being the same for book and tax
Purchase returns that are too low
Documented cutoff procedures
Vendors not listed in telephone directory
Term 5 of 262
Which is the best example of effective inquiry of management?
Are you familiar and do you fully understand the inventory controls associated with your
department?
What internal control problems do you have in your department in relation to inventory?
Are your inventory controls functioning properly?
Do you regularly check and test your controls for deficiencies?
Term 6 of 262
Which of the following is the most efficient method to analyze recorded amounts from one
period to another?
Horizontal Analysis (compare percentages)
Statement of Changes in Stockholders' Equity
Compare dollar amount changes from period to period
Examine changes from period to period in study of statement of cash flows
,Term 7 of 262
The COSO definition of inappropriate disclosure fraud is fraud that involves the issuance of
fraudulent or misleading statements or press releases regarding financial statement line item
effects.
True
False
Term 8 of 262
Which standard recognizes that GAAS auditors are not required to detect all material financial
statement frauds, especially frauds involving forgery or collusion?
SAS 16
SAS 53
SAS 82
SAS 99
Term 9 of 262
Generating random numbers to select samples is not an ASB-certified auditing method.
True
False
Term 10 of 262
Which SAS instructs auditors how to document fraud risk?
SAS 16
SAS 53
SAS 82
SAS 99
, Term 11 of 262
When offsetting /inflating ending inventory amounts to the fraud, the fraudster needs to continue
inflating that amount from year to year to continue the farce.
True
False
Term 12 of 262
Having one person make bank deposits and another person reconcile the bank statements is an
example of:
Segregation of duties
Independent checks
A system of authorizations
Physical safeguards
Term 13 of 262
Which of the following ratios is not useful in detecting overstatement of asset fraud?
Individual fixed asset account balances/Total fixed assets.
Fixed asset/Total current liabilities.
Total deferred charges/Total assets.
Deferred charge write-offs (amortization)/Deferred charge balance.
Term 14 of 262
Which category of symptom does non-recording or under-recording contingent liabilities fit in?
Analytical
Complaints
Lifestyle
Documentary
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