[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

[Leena_1101]

Sorry I missed the post where you have all the answers

[Anonymous]

Not sure if free cash flow is in Becker or not….

Formula is NOPAT + Depreciation – Capital Expenditures – change in working capital requirement

[In God I trust]

np. Here's another group of questions

Control activities constitute one of the five components of internal control described in the COSO model. Control activities do not encompass

A. Information processing.

B. Performance reviews.

C. An internal auditing function.

D. Physical controls.

The Sarbanes-Oxley Act of 2002 has strengthened auditor independence by requiring that management

A. Hire a different CPA firm from the one that performs the audit to perform the company’s tax work.

B. Report the nature of disagreements with former auditors.

C. Engage auditors to report in accordance with the Foreign Corrupt Practices Act.

D. Select auditors through audit committees.

ERM is least expected to provide reasonable assurance of achieving which objectives?

A. Strategic and operations.

B. Compliance.

C. Reporting.

D. Safeguarding of resources.

Each of the following is a method to evaluate internal controls based on the framework set by the Committee of Sponsoring Organizations (COSO), except

A. Evaluating internal control systems that focus first on risk identification of specific losses.

B. Identifying mitigating controls to prevent losses.

C. Distinguishing economy risk from industry risk and enterprise risk.

D. Testing to determine whether the controls are operating effectively and have prevented losses in the past.

[In God I trust]

answers&explanation

Answer (C) is correct.

C. An internal auditing function.

The COSO model describes control activities as policies and procedures that help ensure that management directives are carried out. They are intended to ensure that necessary actions are taken to address risks to achieve the entity’s objectives. Control activities have various objectives and are applied at various organizational and functional levels. However, an internal auditing function is part of the monitoring component.

Answer (D) is correct.

D. Select auditors through audit committees.

The Sarbanes-Oxley Act requires that the audit committee of a public company hire and pay the external auditors. Such affiliation inhibits management from changing auditors to gain acceptance of a questionable accounting method. Also, a potential successor auditor must inquire of the predecessor auditor before accepting an engagement.

Answer (A) is correct.

A. Strategic and operations.

Strategic and operational matters are affected by external events that the organization may not control. Thus, ERM is expected to provide reasonable assurance only that management and the board receive timely information about whether those objectives are being achieved. It does not provide reasonable assurance the objectives are being achieved.

Answer (C) is correct.

C. Distinguishing economy risk from industry risk and enterprise risk.

Evaluating internal controls based on the COSO framework does not require distinguishing economic risk from industry risk and enterprise risk. Therefore, it is NOT a method to evaluate internal controls based on the COSO framework.

[Leena_1101]

Its on the Wiley text book .. Module 45 pg. 303

[In God I trust]

Management considers risk appetite for all of the following reasons except

A. Increasing the net present value of investments.

B. Setting objectives.

C. Developing risk management techniques.

D. Evaluating strategic options.

Which of the following are elements included in the control environment as described by the COSO model for internal control?

A. Competence of personnel, backup facilities, laws, and regulations.

B. Integrity and ethical values, assignment of authority, and human resource policies.

C. Organizational structure, management philosophy, and planning.

D. Risk assessment, assignment of responsibility, and human resource practices.

Of the following reasons to establish internal control, which is the most comprehensive?

A. Encourage compliance with organizational objectives.

B. Ensure the accuracy, reliability, and timeliness of information.

C. Safeguard the resources of the organization.

D. Provide reasonable assurance that the objectives of the organization are achieved.

A company implements an enterprise resource planning application to help improve its financial and operational reporting while gaining other efficiencies related to sales and inventory management. For the implementation, the company hires an individual specializing in preparing the company for the changes through documenting new policies and procedures and developing new training. This is an example of

A. An economic event.

B. A social event.

C. Segregation of duties.

D. Change management.

The audit committee of a publicly traded company (an issuer) is in the process of selecting the independent public accounting firm to conduct the annual financial statement audit. Which of the following is a requirement of the Sarbanes-Oxley Act of 2002 that the committee must consider when selecting an auditor?

A. The firm must be registered with the Public Company Accounting Oversight Board (PCAOB).

B. The firm must agree not to staff the audit with any former employees of the issuer.

C. The firm must be registered with the stock exchange on which the issuer’s shares are traded.

D. The firm must be registered with the Securities and Exchange Commission (SEC).

[In God I trust]

answers below.

Answer (A) is correct.

A. Increasing the net present value of investments.

As described in the COSO ERM framework, risk appetite should be considered in

Evaluating strategic options

Setting related objectives

Developing risk management techniques

Increasing the net present value of investments is an operational objective. It would be determined after consideration of the entity’s risk appetite and other strategic factors.

Answer (B) is correct.

B. Integrity and ethical values, assignment of authority, and human resource policies.

According to the COSO model, the control environment includes the attitude and actions of the board and management regarding the significance of control within the entity. The control environment provides the discipline and structure for the achievement of the primary objectives of the system of internal control. The control environment includes the following elements:

• Human resource policies and practices

• Integrity and ethical values

• Organizational structure

• Commitment to competence

• Management’s philosophy and operating style

• Board of directors or audit committee

• Assignment of authority and responsibility

Answer (D) is correct.

D. Change management.

Hiring a specialized individual to help with the transition into a new enterprise resource planning application is a way to help manage the change. Thus, this is an example of change management.

Answer (A) is correct.

A. The firm must be registered with the Public Company Accounting Oversight Board (PCAOB).

Under the terms of SOX, public accounting firms that act as independent auditors must register with the PCAOB.

[jstay]

In God, what was the answer to the third question down?

internal control, most comprehensive?

[Anonymous]

Hey everyone,

Question for you all. I'm two weeks into studying for BEC and wrapping up Chapter 4 now in Becker, getting ready for the exam on Nov 21. This is my second exam after just taking FAR in mid October. Maybe I am just psyching myself out but when I reflect on what has sticked in my mind from these chapters I have to admit that not much has. I feel like compared to FAR, BEC is a lot more memorization mnemonics instead of really understanding the principles of things. For example memorizing CRIME and how that ties into IS EAR AIM, or ICE RACE and PO AIDS ME etc… It is all relatively easy in a sense but at the same time just not intuitive. Hopefully it all ties in together when I start reviewing after next week but in the mean time am second guessing my self. Has anyone else had a similar experience?

[lauren725]

agile – yep I pretty much feel the same with BEC vs. FAR. This material has proven to be the most difficult for me. There are things that I am trying to just “memorize” rather than it making total sense. I am trying not to get lost in the details though, but it is hard when there are so many random details that go into this material.

AUD - 73,91
FAR - 79 - Thank you God!
BEC - 73,79!!!!
REG - 92 whatttt??!

I used Becker review + flashcards, Ninja Audio, Ninja MCQ supplement on BEC and REG.

Done! Praise God!

[In God I trust]

@jstay

Answer (B) is correct.

B. Provide reasonable assurance that the objectives of the organization are achieved.

The COSO model broadly defines internal control as a “process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (1) effectiveness and efficiency of operations, (2) reliability of financial reporting, and (3) compliance with applicable laws and regulations.”

[jstay]

im doing non stop mcq from now until next wednesday. 13 days out…and im not feeling good at all

[Anonymous]

4 more days for me!!!!

[Anonymous]

Question: What is translation exposure?

[jstay]

Based on potential sales of 500 units per year, a new product has estimated traceable costs of $990,000. What is the target price per unit to obtain a 15% profit margin on sales using the traditional markup calculation?

Incorrect A.

$2,329

B.

$2,277

C.

$1,980

D.

$1,935

becker has this answer as being A. taking 990/.85 = 1,164,700/ 500 = 2,329

ninja has b…?

[Author]

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