Understanding an entity and its environment

Question 1

When inflation is expected to be high _____ investments can be ____

Answer 1

Short term investments in precious metals (gold) can be an effective hedge because the value is driven by market conditions. Bonds return a fixed rate that is not impacted by inflation, and stock value is based on market conditions as well as industry and competitive pressures.

Question 2

PCAOB Composition

Answer 2

Question 3

In a compilation, an accountant is only required to _____

Answer 3

Understand reporting framework, accounting policies, and read FS and consider for obvious errors.

No procedure for accuracy included.

Question 4

Key concerns in macro economics

Answer 4

Unemployment, economic growth, government budget deficits.

Question 5

Major functions of board of directors

Answer 5

Question 6

Fiscal Policy responses

Answer 6

Question 7

Fiscal policy expansionary vs contractionary

Answer 7

Question 8

Stages of a business cycle

Answer 8

Question 9

Types of unemployment

Answer 9

Question 10

Effect of inflation on budgets

Answer 10

Question 11

Limitations on Monetary Policy

Answer 11

Question 12

Powers of the PCAOB

Answer 12

Question 13

Audit committee responsibilities

Answer 13

Question 14

Risks Relevant to Financial Reporting

Answer 14

Question 15

What is stagflation

Answer 15

Stagflation is caused by an increase in cost of production. High actual unemployment and high rates of inflation result from stagflation.

Question 16

Monetary Policy Tools

Answer 16

Question 17

Elasticity of demand

Answer 17

Question 18

Objectives of fiscal policy

Answer 18

Question 19

Those charged with governance.

Answer 19