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CPA Regulation > R-5 > Flashcards

R-5 Flashcards

1
Q

What is the hierarchy of determining authority?

A

IRC code
Revenue rulings
Court cases

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2
Q

What is listed transaction?

A

Transaction specifically identified as tax avoidance

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3
Q

What is more likely than not?

A

There is greater than 50% likelihood of tax position being upheld.

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4
Q

How long should tax return copies be maintained?

A

3 years

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5
Q

For how many years does workpapers for audit be maintained?

A

7 years

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6
Q

After how long should the auditors rotate?

A

5 years

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7
Q

What is the form after the tax audit?

A

Form 870

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8
Q

What is reasonable basic standard?

A

more than 20% chance of succeeding.

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9
Q

What is tort by CPA?

A

Duty of care
Breach of duty
caused injury
Damages.

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10
Q

What is fraud?

A 
misrepresentation
Intent
Actual and justifiable reliance
induce reliance
damages
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11
Q

What is Section 11 of 1933 act?

A

Material Misstatement in financial statements
acquired stock
suffered a loss

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12
Q

What rule 10b-5?

A

Material Misstatement in financial statements
acquired stock
suffered a loss

Scienter
Relied on misrepresentation

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13
Q

What are securities exemption for 1933 act?

A

banks and saving loans
not for profit organizations
government
regulated common carriers

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14
Q

What is regulation A?

A

simplified form of registration and may not exceed 5 million in 12 months of sale

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15
Q

What is Regulation D?

A

No advertising
purchasers will hold 2 years or more
SEC must be informed within 15 days

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16
Q

What is 504, 505, 506?

A

See R-5 pg 49

17
Q

What is section 11 cause of action?

A

acquired stock
suffered a loss
material misrepresentation

18
Q

What is 1934 act registration requirements?

A

traded on national exchange

10 million in assets or 500 shareholders who are not accredited. or 2000 shareholders

19
Q

What is periodic reports filing timings?

A

10-K: 60 days for large corps, 90 days small corps
10 Q: 40 days for large corps, 45 days small corps
8-K: major change in the company

20
Q

Who are insiders?

A

officers, directors and 10% shareholders

21
Q

What are anti-fraud provisions as per 10b-5?

A

fraud in connection with purchase or sale of security

22
Q

What will interstate laws apply?

A

10b-5 and Section 11 of 1933 law.

23
Q

What is comparison of 10b-5 and section 11 of 1933 law?

A

See R-5 page 55

CPA Regulation (26 decks)

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