CPA Review BEC - Becker B1.txt

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CPA Review BEC - Becker B1.txt
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2012-04-25 17:04:33
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REVIEW
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  1. Internal Control Framework
    • Control Activites
    • Risk Assessment
    • Information & Communication
    • Monitoring
    • Environment - Control
    • .....Philosophy & Operating Style
    • .....Human Resources
    • .....Reporting Competencies - Financial
    • .....Authority & Responsibility
    • .....Structure - Organizational
    • .....Ethical Values
    • .....Directors
  2. Enterprise Risk Management Framework
    • Control Activities
    • Risk Assessment
    • Information & Communication
    • Monitoring
    • Environment - Internal
    • .....Philosophy & Risk Management
    • .....Human Resources
    • .....Risk Appetite
    • .....Authority & Responsibility
    • .....Structure - Organizational
    • .....Ethical Values
    • .....Directors
    • .....Competencies - Commitment
    • Objective Setting
    • Risk Response
    • Event Identification
  3. Control Activities
    Policies & procedures used to implement internal control
  4. Risk Management
    • Financial Reporting Risks & Objectives
    • Fraud Risks
    • Risking Technics & Data Sources
    • Inherent & Residual Risk Evaluation
  5. Information & Communication
    Financial reporting & internal control information and internal & external communication thereof
  6. Monitoring
    Ongoing monitoring, evaluations & reporting of deficiencies
  7. Environment - Control
    • Philosophy & Operating Style
    • Human Resources
    • Reporting Competencies - Financial
    • Authority & Responsibility
    • Structure - Organizational
    • Ethical Values
    • Directors
  8. Environment - Internal
    • Philosophy & Risk Management
    • Human Resources
    • Risk Appetite
    • Authority & Responsibility
    • Structure - Organizational
    • Ethical Values
    • Directors
    • Competencies - Commitment
  9. Objective Setting
    Objectives/Risk Analysis
  10. Risk Response
    • Risk Avoidance
    • Risk Reduction
    • Risk Sharing
    • Risk Acceptance
  11. Event Identification
    Event Analysis
  12. SOX 2002 Requirements
    • Corporate Responsibilities
    • Enhanced Financial Reporting
  13. SOX 2002 - Corporate Responsibilies
    • Establish Audit Comitee
    • CEO/CFO Certification of Financial Rep
    • CEO/CFO Bonus Comp Forfeiture for Non-Compliance
    • No Improper Audit Influence
  14. SOX 2002 - Enhanced Financial Reporting
    • Disclosures
    • Conflict of Interest Provisions
    • Related Party Transactions
    • Management Evaluation of Internal Control
    • Code of Ethics for Officers (Silent on CEO)
    • Audit Comitee Finacial Expert Requirements
  15. SOX 2002 - Enhanced Financial Reporting - Management Evaluation of Internal Control
    • Assumption of Responsibility
    • Assessment of Effectiveness
    • Auditor Reporting of Management Evaluation
  16. The Treadway Commission was established by:
    Private sponsoring organizations
  17. Why did COSO prepare the Internal Control Intergrated Framework?
    To assist businesses in assessing internal control
  18. Risk Response - Risk Avoidance
    Terminating Risk
  19. Risk Response - Risk Reduction
    Mitigating Risk (Diversification of Portfolio)
  20. Risk Response - Risk Sharing
    Transferring Risk (Insurance)
  21. Risk Response - Risk Acceptance
    No Action
  22. Event Inventories
    An event identification technic which lists potential events common to companies in a particular industry
  23. Risk Management - Inherent Risk
    Amount of risk that exists to an organisation if management takes no action
  24. Risk Management - Residual Risk
    Amount of risk that exists to an organization after management takes action to mitigate risk
  25. What is the maximum # of layers between CFO and those responsible for financial reporting?
    3
  26. Transaction Marketing
    Customers are attracted for the sake of a single sale (i.e. auto based on lowest price)
  27. Interaction-based Marketing
    Customers are attracted for the purpose of a sale that serves as a basis for an ongoing relationship (repeat business, i.e., insurance)
  28. Database Marketing
    Customer information is gathered in a database and is used to segment customers into target markets for more attractive selling effort
  29. E-Marketing
    Use of the internet to accomplish marketing objectives
  30. Network Marketing
    Use of relationships and referrals to accomplish marketing objectives
  31. Control Charts
    A technic used to determine zero defects and goalpost performance
  32. Cause-and-Effect (Fishbone) Diagram
    A technic used to analyze the source of potential problems and their locations within a process by tracing back to the source (Materials, Machinery, Methods and Manpower)
  33. Benchmarking
    A technic used by a company in comparing data to published information to determine if optimal
  34. An annual profit plan is most effectively based on:

    A. Financial Measures
    B. Quantitative Measures
    C. Qualitative Measures
    D. All of the Above
    D. All of the Above
  35. Non-Financial Measures are viewed as:
    Attention Getters
  36. ROI Disadvantages as a Motivational Technic:
    • Management may delay increasing the investment based in order to make ROI targets easier to meet
    • Does not balance long and short-term issues (encourages shortsighted behavior)
  37. Balanced Scorecard
    Fully integrates financial measures of performance with non-financial measures of performance
  38. Total Productivity Ratio
    • All output relative to the value of all input
    • Considers all inputs & prices of inputs
    • =Quantity of Ouput Produced/Cost of Inputs
  39. Partial Productivity Ratio
    • All output relative to the value of some input
    • Considers single input & no price
    • =Quantity of Output Produced/Quantity of Single Input Used
  40. Pareto Diagrams
    Combine the elements of a histrogram of quality control issues displayed in order of most to least frequent with a line graph that displays the cumulative occurrence of the problems
  41. Effective Performance Measures Characteristics
    • Relate to Organizational Goals
    • Be Objective & Easily Measured
    • Be Under Control & Understood by the Employee
    • Balance ST & LT Objectives
  42. Impacts of IFRS Conversion
    • Increased Revenue Recognition
    • Increased Impairment & Impairment Reversal Frequency
    • Debt & Equity Classification Changes
    • Increased Entity Consolidation
  43. What industries typically use Standard Costing Systems?
    • Manufacturing Industry
    • Service Industry
  44. Prime Costs (PMC) Formula
    PMC = DMU + DLU
  45. Product Costs Definition
    Costs assigned to goods & products that were purchased or manufactured for resale
  46. Direct Materials Used (DMU) Formula
    DMU = BDM + DMP - EDM
  47. Relevant Costs Definition
    Costs relevant to a particular decision
  48. Period Costs
    Costs expensed during a period (not capitalized or charged to a product)
  49. Opportunity Costs
    Costs that would have been saved or earned if an alternate decision would have been made
  50. Cost of Goods Manufactured (COGM) Formula
    COGM = BWIP + TMC - EWIP
  51. Weighted Average Cost Inventory Valuation Method
    • 1. #UC + EWIP(%) = EUP
    • 2. TC/EUP = CPU
    • 3. CPU * EWIP(%) = TV EWIP
  52. What two costing systems can Activity Base Costing be used with?
    • 1. Job Costing
    • 2. Process Costing
  53. FIFO Cost Inventory Valuation Method
    • 1. #UC - BWIP + BWIP(%) + EWIP(%)=EUP
    • 2. CC / EUP = CPU
    • 3. CPU * EWIP(%) = TV EWIP
  54. Activity Based Costing Attributes
    • Assigned based on the consumption of resources
    • Multiple cause and effect relationships
    • Not acceptable for External Reporting
  55. Cost of Goods Sold (COGS) Formula
    COGS = BFG + COGM - EFG
  56. Normal Spoilage Attributes
    • Product Costs
    • Inventoriable
  57. Abnormal Spoilage Attributes
    • Period Costs
    • Non-Inventoriable
  58. What is a Cost Driver?
    A causal factor that increases the total cost of a cost objective
  59. When can Conversion Cost Pricing be used?
    When the customer furnishes the material to be used in manufacturing a product
  60. Engineered Cost
    A cost that bears an observable and known relationship to a quantifiable activity base
  61. Operation Cost System
    • Like Process Costing System except materials are allocated on the basis of batches of production
    • Hybrid System applied to batches of similar products
    • Has features of both processing & job costing
  62. Process Costing System
    • Allocates costs by averaging costs over the total units produced
    • Costs are usually accumulated by department rather than job
    • Used for homogeneous goods
  63. Purpose of Cost Allocation
    Measuring Income and Assets for External Reporting
  64. Disposition of over/under applied factory overhead
    • Isignificant - Costs of Goods Sold
    • Significant - Cost of Goods Sold & Finished Goods Inventory
  65. Total Manufacturing Costs (TMC) Formula
    • TMC = DMU + DLU + MOHA
    • or
    • TMC = PMC + MOHA
    • or
    • TMC = DMU + CVC
  66. Conversion Costs (CVC) Formula
    CVC = DLU + MOHA
  67. Summary of Cost Formulas
    • DMU = BDM + DMP - EDM
    • TMC = DMU + DLU + MOHA
    • COGM = BWIP + TMC -EWIP
    • COGS = BFG + COGM - EFG
  68. Just-In-Time production environment characteristics (JIT)
    • Lot sizes equal to one
    • Insignificant setup costs
    • Balanced & level workloads
  69. Theory of Constraints
    Concerned with max throughput by identifying & alleviating constraints
  70. Six Sigma
    Quality control putting cost reduction above production constraints
  71. 5 Major Processes carried out by Project Manager
    • Budget
    • Risk
    • Time
    • Quality
    • Resources
  72. Project Manager Responsibility
    Identifying & Managing internal & external stakeholder expectations
  73. Project Sponser Responsibility
    Overall project delivery
  74. Methods for Evaluating Project Costs
    • Judgement
    • Reserve Analysis
    • Vendor Bid Analysis
  75. Apparaisal Costs
    • Testing
    • Lab Maintenance
    • Quality Control
    • Inspections
  76. Prevention Costs
    Maintenance
  77. Internal Failure Costs
    • Rework
    • Tooling Changes
  78. External Failure Costs
    • Returns
    • Warranties
  79. Conformance Costs
    • Appraisal Costs
    • Prevention Costs
  80. Non-Conformance Costs
    • Internal Failure
    • External Failure
  81. Total Quality Costs
    • Appraisal Costs
    • Prevention Costs
    • Internal Failure Costs
    • External Failure Costs
  82. Total Quality Management
    An organizational commitment to customer-focused performance that empasizes quality & continous improvement
  83. Kaizen
    Uses analysis of production process to ensure that resource uses stay within target costs
  84. GAP Analysis
    Determines differences between industry best practices & current practices to target improvement in quality
  85. Lean Manufacturing
    Seeks only to meet customer requirements by investing in value-added activities only
  86. Absolute Conformance
    Most rigorous standard of quality, represents perfect or ideal level of completion
  87. Just-In-Time Requirements
    • Continuous Supplies Received
    • Reduced Setup Time
    • Employee Empowerment
  88. Business Process Engineer
    Seeks radical change
  89. Business Process Management
    Seeks incremental change

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