2 BEC Flashcards
FORMULA FOR DISCOUNTING INVESTMENT BACK TO NPV A YEAR LATER
THEY GIVE YOU THE IR GUARANTEED BY THE BANK AND THE GROSS VALUE OF THE INVESTMENT AFTER 1 YEAR
1/1+ The Interst Rate = this factor
Multiply the factor X the gross ending value of the investment
this will give you the present value of the investment at the end
subtract out the initial investment to get the net
Profitability Index
Can’t remember fill this in
What is the performance measure that is calculated as an investment centers after tax operating income minus the product of it’s assets multiplied by the company’s WACC
Economic Value Add
Think here that the value adds are about investment centers, cost centers, what the unit adds to the company’s bottom line. versus ROI and NRV which are more investments in a specific asset or the profitability index which is the PV of future cash flows/initial investment. To evaluate costs and benefits of a proposed project versus evaluating what’s already there.
Economic Value Add versus
ROI
Profitability Index
Net Realizable Value
The latter three are an investment you haven’t made yet
What does SOX have to do with COSO?
sucks for old for S OS X404 requires management in a public companies to select in the internal control framework and then assess and report on the design ineffectiveness of their internal controls anuli the majority of US publicly traded companies have adopted COS oaths framework to do this
what sex it section of the Sarbanes-Oxley act requires reporting on internal control
section 404
is COS oh space voluntary
yes section 404 of the Sarbanes-Oxley act is not that requires an annual framework for annual report on internal control
what are the five sponsoring organizations for the committee of sponsoring organization of the Treadway commission
The American accounting so CA shin, the American Institute of certified public accountant, financial executives international, institute of internal auditors, Institute of management accounts
official definition of internal control in the committee of sponsoring organizations documentation
internal control is a process effected by and entities Board of Directors management and other personnel designed to provide reasonable assurance regarding the achievement of objectives relating to operations reporting in compliance
what are the five organizational structures in COS of
entity level… Division… Operating unit… Function the sewer the levels that company can consider internal controls from the viewpoint of each of those
what does COS zero emphasize FRF rolls and designing and implementing in maintaining internal control and assessing it’s effectiveness
importance of the role of management
COSO how was the reporting category expanded
now more clearly encompasses internal and Extertal financial reporting
The 17 blank
principles
what are the control environment principles. How many are there
there are five control environment principles. The old way to remember was chopper
One. Demonstrates commitment to integrity and ethical values.
Exercises oversight responsibility.
Establish a structure, authority, and responsibility
Demonstrates a commitment to competency
Enforces accountability
risk assessment
How many are there
risk assessment there are four Specify suitable objectives Identifies and analyzes risk Assesses fraud risk Identifies in analyzes significant change
