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ARE 5.0 PcM - Practice Management > Practice > Flashcards

Practice Flashcards

1
Q

What is a sole proprietorship?

A

This business structure is a single architect who provides architectural services

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2
Q

What is a partnership?

A

This business structure is when two or more people join together to share ownership of a business organization.

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3
Q

What are three subcategories of partnerships?

A

General Partnerships, Limited Partnerships, & Joint Ventures are all what?

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4
Q

What are the profit shares under General Partnerships?

A

Profit is either shared equally or a specified percentage of profits as defined in the partnership agreement.

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5
Q

What is the advantage & disadvantage of a Limited Partnership?

A

Limited Partnerships provide limited liability to the individual partners. In turn the partners have limited decision-making powers based on their percentage of investment.

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6
Q

What makes a Joint Venture different from a General Partnership?

A

While Joint Ventures have the characteristics of a General Partnership, they are formed only for a single project or specified period of time.
Profits and losses are passed through to the individual partners and reported on their personal tax returns.

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7
Q

What is a corporation (C corporation or C corp)?

A

This business model is owned by shareholders but is a wholly independent, legally separate, unique entity. The shareholders are protected from any liability or debt incurred by this business type.

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8
Q

What is a sub-chapter S corporation (S corp)?

A

This business model is a variation of a C corporation in which only the wages paid to the shareholder employees are subject to employment taxes. This business model is typically for small businesses under 100 shareholders

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9
Q

What is a Limited Liability Company (LLC)?

A

This business structure provides some liability protection similar to a corporation but offers the tax simplicity of a partnership.

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10
Q

What are the six general archetypes that a firm identity can fall into?

A

The six categories are what?

  • Innovators
  • Project-type Specialists
  • Client Partners
  • Community Contributors
  • Project Management Experts
  • Cost and Quality Leaders
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11
Q

What are ethics?

A

This concept refers to a person’s adherence to a set of rules or values, based on moral principles of what is considered right or wrong.

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12
Q

What is duty?

A

This concept refers to a moral or legal obligation. The responsibility of persons or legal entities to abide by the terms of an agreement.

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13
Q

What is the AIA Code of Ethics and Professional Conduct?

A

This provides guidelines and rules for fulfilling an architect’s obligation to the public, clients, users of architecture, the profession, and professional colleagues in the building industry.

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14
Q

What are Canons?

A

There are 6 of these and they provide broad principles of conduct.

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15
Q

What are Ethical Standards (E.S.)?

A

These are more specific goals toward which Members should aspire in professional performance and behavior.

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16
Q

What are Rules of Conduct (Rule)?

A

These are mandatory; violation of these is ground for disciplinary action by the Institute.

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17
Q

What are the 6 Canons of the AIA Code of Ethics?

A

These forn what part of the AIA Code of Ethics?

1: General Obligations
2: Obligations to the Public
3: Obligations to the Client
4: Obligations to the Profession
5: Obligations to Colleagues
6: Obligations to the Environment

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18
Q

Canon 1: General Obligations

A

Members should maintain and advance their knowledge of the art and science of architecture, respect the body of architectural accomplishments, contribute to its growth, thoughtfully consider the social and environmental impact of their professional activities, and exercise learned and compromised professional judgement.

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19
Q

Canon 2: Obligation to the Public

A

Members should embrace the spirit and letter of the law governing their professional affairs and should promote and serve the public interest in their personal and professional activities.

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20
Q

Canon 3: Obligations to the Client

A

Members should serve their clients competently and in a professional manner, and should exercise unprejudiced and unbiased judgement when performing all professional services.

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21
Q

Canon 4: Obligations to the Profession

A

Members should uphold the integrity and dignity of the profession.

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22
Q

Canon 5: Obligations to Colleagues

A

Members should respect the rights and acknowledge the professional aspiration and contributions of their colleagues.

23
Q

Canon 6: Obligations to the Environment

A

Members should promote sustainable design and development principles in their professional activities.

24
Q

What is the Professional Standard of reasonable care?

A

This is the minimum expectations for professional performance. An architect must do what any reasonably prudent architect would do in the same community, in the same time frame, given the same facts and circumstances.

25
Q

What could cause an architect to be held negligent leading to liability?

A

What could happen to an architect who fails to meet the standard of reasonable care?

26
Q

What is profitability?

A

The effectiveness of generating more income than expenses defines what term?

27
Q

What is liquidity?

A

The proficiency of converting resources into cash when required defines what term?

28
Q

What is solvency?

A

The ability to pay bills on time defines what term?

29
Q

What is the indirect expense factor?

A

This ratio of total amount of indirect expenses, divided by the total of direct salary expenses (DSE) typically ranges from 1 to 2.

30
Q

What conditions have to be met to successfully sue an architect for negligence?

A

To be sued for this, the following conditions must be met.

  1. Duty - having an obligated duty to the suing party.
  2. Breach - Doing something that should not have been done or failing to do something that should have been done.
  3. Cause - Actions or non-actions of the architect causing harm to the party suing.
  4. Damage - Actual harm occurred to the suing party because of the architect’s breach.
31
Q

What is Professional Liability Insurance?

A

This insurance protects the architect in case some action by the architect causes bodily injury, property damage, or other damage. It covers problems related to incorrect specifications, mistakes on the drawings, and negligence.

32
Q

This insurance is also known as malpractice insurance or errors and omission insurance.

A

What is professional liability insurance also known as?

33
Q

What is statutes of repose?

A

This is the beginning of the time period during which a legal action must be filed. It is based on the building’s certificate of occupancy or the completion date of the construction.

34
Q

What is statues of limitation?

A

This is the beginning of the time period during which a legal action must be filed. IT is based on the discovery of the defect in the project or when an injury occurs.

35
Q

What are two ways an architectural practice can assess its resources to determine what the billing rates and profit goal should be?

A

Estimating the firm’s revenue, and then determine the staffing needs, calculate the overhead expenses, and creating a profit plan. or determine the staff expenses, overhead costs, and profit targets, and then calculate what the billing revenue needs to be are two methods of determining what?

36
Q

What are the three facets of financial health that a firm needs to manage in order to survive

A

These are three facets of what that a firm needs to manage?

  • Profitability
  • Liquidity
  • Solvency
37
Q

What are direct expenses?

A

These are costs associated with a project.

38
Q

What are indirect expenses?

A

These are general costs to maintain and operate the business and not directly tied to a project.

39
Q

What is Liability?

A

This is a firms legal responsibility for injury or damage to another person or property.

40
Q

What is negligence?

A

This is the failure to use due care which results in the harm or damage to another party and can be the cause for liability.

41
Q

What are four basic ways of dealing with risk?

A

Retain, reduce, transfer, or avoid are 4 basic ways of dealing with this.

42
Q

What is General Liability insurance?

A

This insurance protects the architect against claims or property damage, liability, and personal injury caused by the architect, firm employees, consultants, or other people hired by the architect.

43
Q

What is agency?

A

This is when a person or entity represents someone else and acts on that person’s behalf.

44
Q

What are the primary areas of administration of a firm?

A

How do these relate to a firm?

  • Office administration
  • Finance
  • Human resources
  • Marketing
  • project administrative support
  • Information technology
45
Q

What is Office administration?

A

this is the day to day operations of running an office. This includes representing the firm on the phone, maintaining adequate equipment supplies, writing reports, and helping to enact general operational procedures.

46
Q

What are financial considerations of a firm?

A

Maintaining accounting software, processing payroll, preparing invoices, paying bills, monitoring budgets, working with Certified Public Accountants (CPAs), and filing government forms.

47
Q

What is human resources?

A

This covers the staffing of a firm and can include interviews, performance evaluations, investigating employee insurance plans, and maintaining employee records.

48
Q

What does Marketing involve?

A

This involves publicity and promotion of the firm and is not specific to an individual project. This can involve writing press releases, keeping the firm’s website up to date, or meeting with potential clients.

49
Q

What is Project administrative support?

A

This could include providing and distributing project binders, helping prepare contracts, helping create specifications, and maintaining project management software.

50
Q

What is the role of Information Technology (IT)?

A

This role is responsible for responsible for maintaining computer hardware, installing devices, managing software, monitoring the network infrastructure, performing computer backups and more.

51
Q

What is at-will employment?

A

This form of employment means that in the absence of a contract providing otherwise, an employee’s employment may be terminated at any time, for any reason, with or without notice.

52
Q

What is a general partnership?

A

This type of practice is formed by 2 or more architects practicing together. All members of this practice actively participate in management. taxes are passed though the individual members personal taxes.

53
Q

What is a limited partnership?

A

This type of business structure is generally used as an investment vehicle and while having ownership shares, there is limited management roles.

54
Q

What is a Limited Liability Partnership (LLP)?

A

this type of business structure offers liability protections that are not available to general partnerships. The personal assets of the partners other than there ownership interest in the business are protected against liability for business claims except in the case of fraud or other extreme wrongdoing.

ARE 5.0 PcM - Practice Management (5 decks)

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