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Accounting-for-Decision-Makers WGU Accounting for Decision Makers C213 VAC2

  • WGU
  • 5 free sample questions

About this exam

Accounting-for-Decision-Makers is the WGU exam WGU Accounting for Decision Makers C213 VAC2. Paid practice material for this exam is not available yet, but you can try its free sample questions.

Exam code
Accounting-for-Decision-Makers
Vendor
WGU
Practice questions
Not available yet
Free sample questions
5
Question bank last updated
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Try 2 sample questions

Taken from the free sample set for Accounting-for-Decision-Makers.

Question 1

Which body regulates a certified public accounting firm’s audit practices when the firm is auditing a large, publicly traded company?

  1. Option A:

     The Financial Accounting Standards Board (FASB)

  2. Option B:
    The Financial Accounting Standards Advisory Council (FASAC)
  3. Option C:
    The Internal Revenue Service (IRS)
  4. Option D:
    The Public Company Accounting Oversight Board (PCAOB) 
Show answer and explanation

Correct answer: D

The correct answer is D. The Public Company Accounting Oversight Board (PCAOB). The PCAOB was created to oversee the audits of public companies and SEC-registered brokers and dealers in order to protect investors and support the public interest in accurate, independent audit reports. Its responsibilities include registration of audit firms, inspections, enforcement, and audit-related standard-setting. Because the question refers to a CPA firm auditing a large, publicly traded company, PCAOB oversight is the correct regulatory answer. Option A is incorrect because FASB sets accounting standards, not audit practice regulation for public company auditors. Option B, FASAC, is an advisory council to FASB and does not regulate audit firms. Option C, the IRS, administers tax laws and does not oversee external audit practices for public companies. In accounting and auditing, it is essential to distinguish between those who set accounting rules and those who supervise auditors. For publicly traded companies, that audit oversight role belongs to the PCAOB, making Option D the only accurate choice. 

Question 2

Which organization establishes rules U.S. companies use to record and report accounting transactions? 

  1. Option A:
    Accounting Principles Board
  2. Option B:
    Securities and Exchange Commission
  3. Option C:
    Financial Accounting Standards Board
  4. Option D:
    Internal Revenue Service 
Show answer and explanation

Correct answer: C

The correct answer is C. Financial Accounting Standards Board (FASB). The FASB is the private-sector standard-setting body whose accounting and financial reporting standards are recognized as authoritative U.S. generally accepted accounting principles (GAAP) for purposes of the federal securities laws. The SEC has explicitly recognized FASB standards as “generally accepted,” which is why U.S. companies rely on FASB guidance when recording and reporting accounting transactions. Option A is incorrect because the Accounting Principles Board (APB) was a former standard-setting body that was replaced by the FASB. Option B, the SEC, does have legal authority over public company reporting, but it does not serve as the primary day-to-day accounting standard setter in the same way FASB does. Option D, the IRS, is responsible for tax administration, not financial accounting standards for general-purpose financial statements. For exam purposes, when the question asks which organization establishes the accounting rules U.S. companies use to record and report transactions, the best and most accurate answer is FASB
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