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BEC CPA Exam > CPA Review for Free > Flashcards

CPA Review for Free Flashcards

1
Q

Systems control activities can generally be divided into what two categories?

A

General and application

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2
Q

The purchase and sale of commodities for current delivery is known as which market?

A

Spot Market

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3
Q

A reliable system is one that operates without

A

material, error, fault or failure during a specified period in a specified environment -

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4
Q

The Availability principle of the AICPA’s Trust Services framework is concerned with

A

the availability of the system for operations and uses as committed or agreed to in conformity with the entity’s availability policies.

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5
Q

System failures that result in an interruption of business operations or loss of data is:

A

An example of risk related to the Availability principle

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6
Q

A company produces a product in a long-series of automated steps that requires little direct material and direct labor but a lot of overhead. What costing system is the company most likely to use?

A

Activity Based Costing

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7
Q

Computer hardware is extremely reliable, primarily due to

A

chip technology.``

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8
Q

The country of Flattistan’s central bank is seeking to stabilize its nation’s economy in what has become a period of excessive inflation. To this end, the central bank would utilize which of the following tools of monetary policy?

A

Selling government securities

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9
Q

Which of the following best describes a cold site?

A

An alternate site where the organization provides and installs hardware

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10
Q

It is less expensive than a hot site but takes longer to recover after a disaster

A

Cold Site

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11
Q

process a large volume of transactions where management reporting systems provide information used to support business decisions.

A

Transaction processing systems

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12
Q

Posie Petunia is planning to start up an independent business producing organic hand lotions. Several independent producers already produce such lotions and each produces a differentiated product. The equipment and supplies Posie needs are relatively inexpensive to obtain. Which of the following best describes the market structure into which Posie is planning to enter?

A

monopolistic competition: several independent producers, low barriers to entry, and differentiated products.

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13
Q

refers to the pricing strategy for products and services bought and sold across international borders between related parties. Transfer pricing is closely tied to a firm’s international tax strategy

A

Transfer pricing

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14
Q

Caused by decrease in SRAS

A

Cost-push Inflation

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15
Q

What causes a cost-push inflation

A
  1. Increase in oil price

2. Increase in nominal wages

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16
Q

What causes inflation and /or deflation?

A

Shift in AD and SRAS curves

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17
Q

Shift Right in AD curve will cause

A

Price Level to rise, leading to inflation

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18
Q

Shift Left in SRAS curve will cause

A

Price Level to rise, leading to inflation

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19
Q

Demand pull inflation is caused by

A

an increase in AD

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20
Q

Demand pull inflation could be caused by factors such as

A
  1. Increase in gov’t spending
  2. Decrease in taxes
  3. Increase in wealth
  4. Increase in the money supply
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21
Q

Inflation has a inverse relationship with

A

Purchasing power (As the price level rises the value of money declines)

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22
Q

What are the two most common measures of money supply?

A
  1. M1

2. M2

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23
Q

A disaster recovery and business continuity plan should strive for the following goals:

A

minimize the extent of disruption, damage and loss, establish an alternate method of processing data, facilitate the return to normal operations as soon as possible and train employees to perform under emergency conditions. -

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24
Q

The level of a material misstatements is one of the most important professional judgments that an_______must make.

A

independent auditor(It is one that the auditor must make without any influence by the audit client.)

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25
Q

Stephanie Felix has been tasked with measuring how often certain manufacturing defects occur at his company’s Salt Lake City plant. Which of the following tools would be the most effective in this case?

A

A Pareto chart is essentially a bar chart or histogram that ranks the causes of variations in a process from most to least frequent, which is intended to indicate their effects on quality

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26
Q

Which of the following is the best explanation of a futures contract?

A

A contract to buy or sell a specified commodity at a certain date in the future, at a market-determined price

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27
Q

An agreement to buy 10,000 barrels of light, sweet crude oil (a particular grade of crude oil) on August 12 of the current year at the price being quoted today in the futures market,is an example of

A

A futures contract

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28
Q

Is a cost that is not described by a straight line over the relevant range

A

A nonlinear cost function

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29
Q

Can be fixed or variable and are costs that are common to multiple products.

A

Joint Cost

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30
Q

You see a simultaneous decrease in supply and demand for tobacco products. Which of the following represents the effect of these shifts on output quantity and market price?

A

Output quantity decreases and output price is indeterminate.

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31
Q

costs have both a fixed and variable component

A

Mixed costs or semi variable

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32
Q

vary proportionally in total with the level of activity

A

variable cost

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33
Q

When a bond pays a coupon rate below the prevailing market rate, it will sell

A

At a discount

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34
Q

If the coupon rate is greater than the current market rate, the bond will sell.

A

At a premium.

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35
Q

When the coupon rate is equal to the market rate, the bond will sell

A

At exactly par value

36
Q

The systems programmer is responsible for

A

implementing, modifying and debugging the software required to interface with the hardware

37
Q

A patch is

A

a change or modification to an existing program and/or may also be added for fraudulent purposes.

38
Q

An example of patch would be

A

changes in tax laws may require the implementation of a patch.

39
Q

An example of internal business process:

should be measured based on how well the company manages to do a particular process

A
  1. measures how quickly inventory is acquired and sold.
  2. measures how cheaply goods can be turned into finished products.
  3. measures how often goods get to a customer within the time allotted
40
Q

Useful and used by all levels of the organization not just for the exclusive use of upper management.

A

Data Mining

41
Q

The definition of a data warehouse is:

A

An integrated collection of data used for reporting and analysis to support management decisions

42
Q

Which of the following is a requirement established by the New York Stock Exchange for the companies that are officially listed on that exchange?

A

A code of conduct must be adopted by the governing board and made public.

43
Q

What is meant by the term “economic profit?”

A

any profit earned in excess of a normal amount of profit.

44
Q

Internal control systems should be designed to achieve operations and information process goals. What are three examples of operations goals?

A
  1. Effectiveness of operations
  2. Efficient resources
  3. Security of resources
45
Q

a small number of powerful firms that dominate the marketplace and significant barriers to entry

A

An oligopoly

46
Q

Which of the following definitions best describes an internal site for disaster recovery?

A

The organization’s site or intranet -

47
Q

The steps to process improvement are:

A

1) design
2) modeling (which involves simulation of the process)
3) execution (including training of personnel and testing of the process)
4) monitoring
5) optimization

48
Q

A disaster recovery and business continuity plan should include

A

Specific assignments for personnel who are familiar with the plan and their responsibilities

49
Q

is a second generation language that requires an assembler to translate assembly language into machine language.

A

Assembly language

50
Q

the risk to the firm’s earnings associated with translating its financial statements into functional currencies

A

Translation risk

51
Q

Responsible for creating the visual content of the website?

A

The Web Designer

52
Q

Examples of confidential data are:

A
  1. Engineering details of products
  2. legal documents
  3. customer lists
53
Q

Internal control systems should be designed to achieve operations and information process goals. Which of the following are five examples of information goals?

A

Input validity, input completeness, input accuracy, update completeness, and update accuracy -

54
Q

The COBIT framework describes four categories of IT resources:

A

applications, which include systems and manual procedures to process information; the information itself; infrastructure, which includes hardware, equipment, and operating systems needed to process information; and people.

55
Q

The seven criteria set forth in the COBIT framework are:

A

1) effectiveness, 2) efficiency, 3) confidentiality, 4) integrity, 5) availability, 6) compliance, and 7) reliability

56
Q

Two methods to control access to appropriate users include

A

Passwords and user IDs and Independent review of transactions -

57
Q

A character is a

A

letter, number or symbol

58
Q

System failures that result in an interruption of business operations or loss of data is an example of risk related to:

A

the Availability principle

59
Q

Computer software designed to help humans make decisions?

A

Artificial intelligence

60
Q

An example of a tool used by a Systems Analyst?

A

A systems flowchart

61
Q

An example of a Master File is:

A

Vendor names and addresses

62
Q

responsible of overseeing the development, planning and the implementation of a website. -

A

The Web Administrator or also called a Web Developer

63
Q

Batch processing accumulates and processes similar

A

transactions in batches

64
Q

On-line processing processes transactions as

A

they occur

65
Q

Unemployment that occurs when unemployed laborers have manufacturing skills but job openings are for laborers with service skills is known as

A

Structural Employment

66
Q

Frictional unemployment occurs

A

when there is job turnover

67
Q

Cyclical unemployment occurs when

A

aggregate labor supply exceeds aggregate labor demand in a low point of the business cycle.

68
Q

Full employment occurs when

A

all workers willing to work at market wages are employed using their skills

69
Q

A period cost cannot be directly associated with

A

the production of a good and is expensed as incurred rather than being capitalized.

70
Q

Product costs or “inventoriable” costs (such as direct material and direct labor) are directly associated with the

A

production of a good and are, thus, capitalized, or added to the cost of those items

71
Q

if the cost of capital is 8 percent per year, then the IRR must be

A

above 8 percent for an investment to be a worthwhile venture

72
Q

The potential that the present value of an organization’s cash flows could increase or decrease as a result of changes in the exchanges rate

A

Economic Exposure

73
Q

Measurement of transaction exposure is generally done in two steps

A
  1. Project foreign currency inflows and foreign currency outflows
  2. Estimate the variability(risk) associated with the foreign currency.
74
Q

Exchange rate risk is defined , in part, by

A

Transaction Exposure

75
Q

Globalization is often measured using

A

World trade growth as a percentage of GDP

76
Q

An increase in the discount rate would cause

A

MS ↓ INTEREST RATES ↑

77
Q

When do differentiation strategies fail

A

The value of the firm’s premium does not exceed its cost

78
Q

Occurs when an investor’s certainty equivalent is equal to the expected return on the investment

A

Risk indifferent

79
Q

Occurs when an investor’s certainty equivalent is less than the expected rate of return

A

Risk-Averse(investor seeks higher returns for more risk)

80
Q

Inelastic supply curve occurs when

A

the percentage change in Qty supplied is LESS than the percentage change in price

81
Q

Subsidy is:

A

effectively reduces the costs of producing a product

82
Q

Ideally, functions in a control environment should be segregated. This is not always possible. At a minimum, an attempt should be made to segregate what three functions?

A

Programming, operations and the data library

83
Q

Which function is generally responsible for the custody of removable media?

A

The Librarian

84
Q

An economist is hoping to see a future increase in gross domestic product. The economist is looking for evidence that might indicate this future change will happen. Which of the following is most likely to indicate this possibility?

-

A

Increase in the hours worked each week by production workers

85
Q

GDP is a measure of

A

Productivity

86
Q

definition for GDP using the expenditure (input) approach?

A

Consumption + investment + government expenditure + net exports.

87
Q

When a firm uses standard unit costs for elements of production, budget variances are calculated by

A

comparing actual costs with those based on standard unit costs at the actual level of production -

BEC CPA Exam (6 decks)

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