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CPA fast > NewBEC > Flashcards

NewBEC Flashcards

1
Q

Most effective external monitoring institution?

A

External auditors. Bc SEC depends on external auditors to monitor corporations

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2
Q

Chief audit executive should report to

A

CEO not CFO

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3
Q

Who is ultimately responsible for ERM?

A

CEO should take ownership

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4
Q

Determines disaster and evaluates effect

A

risk analysis. backup analysis, vendor analysis and contingent analysis are done to react to risk analysis

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5
Q

SOX requires to publish what type of info?

A

scope and capabilities of the internal control system and include procedures for financial reporting

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6
Q

Internal auditors assess organization’s risk by determining

A
  • objectives support and align with mission,
  • significant risks are identified and assessed,
  • risk responses are selected align with appetite,
  • information is captured and communicated
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7
Q

Difference b/w bylaws and articles of incorporation

A

articles of incorporation = state law and regulations, bylaws= how things are done in corporation involving BOD and officers

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8
Q

Change management

A

evaluates the design and implementation of changes and establishes new baseline.

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9
Q

Who will be entitle w/ reward for whistle blowing? BOD, external auditor, internal auditor or customer?

A

customer’s that discovers violation will be given a reward

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10
Q

risk appetite, residual risk and risk tolerance

A

maximum willing to accept, after response, acceptable variation

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11
Q

probabilistic analysis

A

part of risk assessment not event identification

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12
Q

Characteristics of efficient mkts hypothesis

A

investors are knowledgeable, capital mkt price reflects underlying value, acct change doesn’t influence stk price.

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13
Q

In regression analysis, coefficient measures

A

goodness of fit

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14
Q

ethics program consider what type of objective?

A

compliance objective

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15
Q

unit elastic demand change in price

A

no effect on total revenues

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16
Q

Code of ethics framework includes

A

4 rules of conduct: integrity, objective, confidentiality and competence for internal services by individuals and entities

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17
Q

Is decreasing the cash conversion time good news for organizations?

A

yes, increases profit and less need for financing

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18
Q

Difference b/w EVA and accounting profit

A

EVA= residual income after all cost of capital been deducted. accounting profit= income w/o deducting cost of capital

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19
Q

Calculation of reorder point (EOQ) includes

A

daily use, delivery time and stk out cost

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20
Q

Examples of carrying cost

A

cost incurred to cargar w/ asset. storage, insurance for loss, obsolescence, shrinkage

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21
Q

Examples of unsecured obligations

A

revolving credit, bank acceptance, lines of credit and commercial paper. credit lien, chattering mortgage and factoring are consider secured.

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22
Q

Fair value is best presented as

A

principal mkt, if none, then most advantageous

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23
Q

Payback period can also be use for

A

internal rate of return if cash flow is stable

24
Q

use of a cost (asset-based) approach is appropriate when

A
  • the company is in liquidation.
  • the company’s value related to the assets held.
  • the company has no income in recent years.
  • future benefit cannot be predicted
25
Q

Theory of constraints measurements

A

throughput, investment and operating cost in order to focus on quicker manufacturing process

26
Q

Business process supported by

A

approaches, techniques and measures

27
Q

strategic planning vs operating planning

A

strategic is high level focused on long goals vs operating in budget data

28
Q

steering committee

A

establishes policy and direction for an organization’s information system. not involved in the actual design, development, and direction of projects

29
Q

Methods of allocating joint costs

A

sales value at split off, physical measures and NRV. unlike flexible budget not used to allocate joint cost

30
Q

using a flexible budget, if production level changes,

A

FC per unit decreases and VC remain the same

31
Q

Commercial paper

A

generally doesn’t have 2ndary mkt

32
Q

required rate of return includes what risks?

A

default risk, maturity risk, purchase power risk. does not use credit risk

33
Q

How are exchange rates are determined?

A

based on demand and supply just like prices are determined

34
Q

risk margin

A

extra cushion for unexpected risks

35
Q

NPV assumes cash flow reinvested @ what rate?

A

discount rate not risk free

36
Q

top-down risk assessment focus on

A

material accounts, higher levels first

37
Q

IT steering committee should consist of

A

mgmt. controller and other personnel

38
Q

sensitivity analysis

A

analysis to use alternatives w/ expected inputs and changes options b4 making decision. calculates change in the result due to a potential change in a project

39
Q

collusive pricing and predatory pricing

A

collusive, to increase price to externals/ predatory, to lower price so others go out of business

40
Q

electronic vaulting

A

electronically storing backups at a remote data facility

41
Q

rule of thumb

A

formula that cannot be use as method of valuation but use to compare w/ other method for support of results

42
Q

using a company-wide cost of capital will

A

over invest in high risk divisions and under invest in low risk divisions

43
Q

taxes on NPV calculations effect

A

decreases both benefits and costs

44
Q

measures of ROEquity and profit margin

A

on equity measures effectiveness and profit measures operating efficiency

45
Q

byproduct is

A

output of a joint production process, no profit is recognized

46
Q

Treynor index

A

two components of risk:

  1. Risk produced by fluctuations in the market
  2. Risk produced by fluctuations of the individual stock
47
Q

Personal income

A

all income received by individuals whether earned or unearned before any personal income taxes

48
Q

real options approach

A

deals with uncertainty

49
Q

inflation affects which type of rate

A

historical rate are not influenced by the change in current price

50
Q

just in time inventory model makes EOQ

A

irrelevant since no inventory is needed. flexibility is not considered w/ EOQ.

51
Q

Multiple regression differs from simple regression in that

A

has more independent variables

52
Q

major concern with LANs

A

users responsible for capturing and processing data

53
Q

Magnetic ink character recognition

A

most often used by banks to read the magnetic ink on checks and deposit slips

54
Q

mutual interdependence

A

outcome of pricing decisions in an oligopoly is dependent upon the reactions of organization’s rivals

55
Q

levels of interdependence in integrated planning

A

Three levels: Pooled/Sequential/Reciprocal

56
Q

Imputed costs are

A

implied costs; not known with certainty and must be estimated

57
Q

strategic information system

A

allows management to make decisions

CPA fast (15 decks)

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