BEC 真题直播. Feifei Yang

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1 BEC 真题直播 Feifei Yang

2 Writing 1: Location of information system faces the threats of flood. Risks of information system have an impact on integrity, security and availability. Please write a memo to explain risks highlighted by the location of the systems and controls that could be done to mitigate risk

3 Writing 1: Content Disaster >>> you can write about: Suggest to safeguard records and files: backup files, encryption Get a disaster recovery plan Multiple data center backups: full backup, incremental backup, differential backup Get an off-site locations: cold site, hot, site, warm site

4 Writing 2: Write a memo to discuss the major points of setting up a cloud-based disaster recovery plan

5 Writing 2: Content Steps to take to set up a cloud-based disaster recovery plan: Evaluate your data protection needs Choose your cloud provider Estimate the costs Develop a bandwidth management strategy Determine the logistical requirements Virtual machine replication Pros: ease of getting started; flexible, lower cost alternative; simplified environment; management consistency; scalable to any size business Cons: reliability of the cloud provider is in doubt; data security; access risk

6 Writing 3: A company decides to convert from U.S. GAAP to IFRS. The company need to implement a new accounting information system. As a consultant of the company, write a memo about necessary control consideration when implementing a new AIS. You are writing about necessary consideration when implementing a new AIS. NOT the conversion from U.S. GAAP to IFRS.

7 Writing 3: Content Define AIS Three key division within AIS: analysis, design and implementation. All thee key divisions must by complemented with a system of control. --- Internal control plays a key role in the success of the AIS Write about IC CRIME How each of them works within AIS What the difference or need to be done for the conversion from U.S. GAAP to IFRS E.g.: Control environment >>> Tone at the top>>> make sure employees know the conversion from U.S. GAAP to IFRS and encourage them to learn and follow the new rules E.g.: monitoring>>>evaluate the effectiveness of IC>> ongoing and separate monitoring should be adopted to evaluate whether the new AIS record transactions in compliance with IFRS Make a conclusion and thank god you done with it

8 写作技巧建议采用总分总模板来写普遍情况下采用 : 三段式 ( 适用于说明式 ) 四段式 ( 适用于对比式 ) 逻辑清晰, 尽量避免重复性叙述用语职业化, 尽可能多的使用专业术语在使用缩写时, 如 COSO 时, 若能写全称, 第一次写时用全称 The Committee on Sponsoring Organizations (COSO), 后面再出现时, 可用缩写避免低级语法错误, 若语法不好, 使用简单的句式描述多用主动句式

9 写作技巧多使用连接词及转折词来加强逻辑感如 :and, but, at least, however, therefore, in the summary, not only but also, in a word 不要使用语气过于强烈的词语如 :only, one, never, must, have to, remote, impossible, perfect 如果想要弱化语气或降低可能性时, 不要使用 possible, probable, maybe 类似词汇多使用 may be, could, might 来满足需求

10 选择题技巧因为 BEC 这门科目的特性, 选择题多为概念题, 其它为计算题选择题排除法!!! 对于概念题的选择题 : 选项中出现 only, one, never, have to 类似的词语时, 警惕! 如果是选对的, 建议考虑排除如果选错的, 十有八九是它注意选项中的逻辑顺序, 谨防出现指鹿为马或者混淆概念的选项考试中总有知识是你不懂的, 努力把问题和选项建立起逻辑关系或者选你熟悉的, 看书时候出现过的词避免语气过于强硬的选项

11 COSO Components of IC - CRIME Control environment Ethics Risk assessment FS misstated or fraud Information and communication systems Fair, Accurate, Complete, Timely (FACT) Monitoring Efficiencies of IC and report deficiencies (Existing) Control activities Policies or procedures to mitigate risk

12 Sample Question 1 The Golden Corp. has adopted the internal control integrated framework and regularly surveys local employers and uses national services to ensure that the accounting staff is appropriately compensated. The principle of the control environment most closely related to this practice is: A. Financial reporting competencies B. Management philosophy and operating style C. Authority responsibility D. Human resources Ans.: D. IC integrated framework: CRIME>> control environment>> PHRASED>>H stands for HR Compensation>>>employee salary>>>hr

13 COSO Components of ERM IS EAR AIM 1. Internal environment CRIME 2. Setting objectives S+ORC 3. Event identification CRIME 4. Assessment of risk CRIME 5. Risk Response CRIME 6. Control activities CRIME 7. Information and communication CRIME 8. Monitoring CRIME

14 Sample Question 2 According to COSO, which of the following components of enterprise risk management addresses an entity s assignment of authority and responsibility? A. Internal environment B. Control activities C. Information and communication D. Monitoring Ans. A. COSO ERM: IS EAR AIM. Component I is internal control = tone at the top, it addresses an entity s assignment of authority and responsibility. Internal control for ERM: EBOCA HR

15 Sample Question 3 According to COSO, which of the following components of enterprise risk management addresses an entity s reporting deficiencies? A. Internal environment B. Event identification C. Control activities D. Monitoring Ans.: D. Monitoring: make needed modifications, catch deficiencies in control and then REPORT the deficiency! Event identification is part of risk assessment. It distinguish risks and opportunities. It might report risks or opportunities. Not reporting deficiencies

16 Sample Question 4 Which of the following is not a goal of an Enterprise Risk Management Framework? A. Provide reasonable assurance that company objectives and goals are achieved and problems and surprises are minimized B. Achieve financial and performance targets C. Assess risks continuously and identify the steps to take and resources to allocate to overcome or mitigate risk D. Avoid adverse publicity and damage to the entity s reputation Ans.: D

17 Internal Rate of Return and ROI Determines the present value factor that yields an NPC equal to 0 PV of the after-tax net CF = initial investment Accept when IRR > Hurdle rate Reject when IRR < Hurdle rate NPV = 0 IRR= Discount rate (Hurdle Rate) Limitations of IRR Return on investment (ROI) the assessment of a company s percentage return relative to its capital at risk

18 Sample Question 5 Which of the following metrics equates the present value of a project s expected cash inflows to the present value of the project s expected costs? A. Net present value B. Return on assets C. Internal rate of return D. Economic value-added Ans.: C. The IRR is the rate to arrive at a NPV of 0. NPV= discounted future CF-PV of investment

19 Sample Question 6 What is the primary disadvantage of using return on investment (ROI) rather than residual income (RI) to evaluate the performance of investment center managers? A. ROI is a percentage, while RI is a dollar amount B. ROI may lead to rejecting projects that yield positive cash flows C. ROI does not necessarily reflect the company s cost capital D. ROI does not reflect all economic gains Ans.: B. Managers might be reluctant to invest in projects that might lower their ROI. disincentive to invest

20 IT Cold Site physical requirements ready for data processing; 1-3 days Hot Site equipped to take over data processing; few hours Warm Site have all the hardware; days Batch Processing - always a time delay

21 Sample Question 7 A client is concerned that a power outage or disaster cloud impair the computer hardware s ability to function as designed. The client desires off-site backup hardware facilities that are fully configured and ready to operate within several hours. The client most likely should consider a: A. Cold site B. Cool site C. Warm site D. Hot site Ans.: D. hot site haves everything in place. It only takes few hours to get everyone back to work. Almost no interruption or delay.

22 Sample Question 8 Which transaction is appropriate to be handled by batch processing? A. Sales B. Inventory C. Material D. Payroll Ans.: D. Examples of batch processing systems include payroll systems and examination report card system.

23 Segregation of Duties In general, segregation of duties means dividing responsibilities for recording, authorizing, and approving transactions and handling the related asset Segregation of duties in an IT environment is defined as dividing responsibilities for different portions of a transaction among several different people normally revolves around granting and/or restricting access to production data and/or production programs

24 Sample Question 9 Which of the following statement best describes the importance of segregation of duties? A. Within the IT department, the duties of system analysts, computer programmers, computer operators, and security administrators should all be the responsibility of one individual B. Good internal control requires that no single employee be given too much responsibility over business transactions or processes. An employee should not be in a position to commit and conceal fraud C. Segregation of duties is defined as dividing responsibilities for different portions of a transaction (authorization, recording, and custody) for those employees who are on probation D. The objective is to encourage any one person from having total control over all aspects of the transaction Ans.: B

25 GDP Calculation Expenditure(Spending/Input) Approach - GICE Income (Output) Approach - I PIRATED Government purchases Gross private domestic Investment Personal Consumption expenditures Net Exports (exportsimports) Income of proprietors Profits of corporations Interest (net) Rental income Adjustments for net foreign income and miscellaneous items Taxes (indirect biz taxes) Employee compensation Depreciation

26 Sample Question 10 Assume the following data for the U.S. economy in a recent year: Personal consumption expenditures $5,015 billion Exports 106 billion Government purchases of goods/services 1,040 billion M1 262 billion Imports 183 billion Gross private domestic investment 975 billion Open market purchases by Federal Reserve 5 billion Based on this information, what s the U.S. GDP for the year? Government purchase $ gross private domestic Investments personal Consumption expenditures net Exports (exports imports) +( ) GDP $6,953 billion

27 Economics Change in exchange rates Appreciated currencies: AD,GDP,unemployment,Prices $ more expensive relative to foreign currency Depreciated currencies: AD,GDP,unemployment,Prices $ less expensive relative to foreign currency CPI calculation Anything nominal is unadjusted for inflation; in economics, real means adjusted for inflation

28 Sample Question 11 A country s currency conversion value has recently changed from 1.5 to the U.S. dollar to 1.7 to the U.S. dollar. Which of the following statements about the country is correct? A. Its exports are less expensive for the U.S. B. Its currency has appreciated C. Its imports of U.S. goods are more affordable D. Its purchases of the U.S. dollar will cost less Ans.: A. Foreign currency depreciates. $ becomes more expensive relative to foreign currency.

29 Sample Question 12 Given: CPI Year 1, CPI Year 2, Nominal Price Year 2, and Real Price Year 1. how to calculate real price for Year 2? Solution: Real Price = (inflation rate+1)*nominal price

30 Cost Accounting Prime cost = DM + DL Conversion cost = DL + Mfg O/H WIP Inventory, beg Add: DM used DL Mfg O/H applied Total mgf costs incurred Total mfg cost available Less: WIP, ending Cost of goods manufactured

31 Sample Question 13 Which one of the following best describes direct labor? A. A prime cost B. A product cost C. Both a period cost and a prime cost D. Both a product cost and a prime cost Ans.: D. Direct labor is a prime cost, a conversion cost and a product cost. Product costs are direct material, direct labor and overhead.

32 Formulas Residual income = NI Required return Required return = NBV(equity)*Hurdle rate ROI = Income/investment capital (average) = Profit margin*investment turnover AR average collection period = Average AR/Average sales per day WACC = Cost of equity*% equity in capital structure + weighted average cost of debt (after tax) * % debt in capital structure Cost of debt = interest rate * (1-tax rate)

33 Sample Question 14 Golden Inc. needs $30,000,000 of new financing. In keeping with its capital structure, Golden plans to use debt & equity financing as follows: Issue $10,000,000 of 20-year bonds at a price of 101.5, with a coupon of 10%, and flotation costs of 2.5% of par value Use internal funds generated from earnings of $20,000,000 The equity market is expected to earn 15%. U.S. treasury bonds currently are yielding 9%. The beta coefficient for Golden s common stock is estimated to be 0.8. Golden is subject to a 40% corporate income tax rate. Golden has a price/earnings ratio of 10, a constant dividend payout ratio of 40%, and an expected growth rate of 12%. Assume Golden has an after-tax cost of debt of 9% and an after-tax cost of equity of 15%. Golden s WACC is: Solution: WACC = Cost of equity*% equity in capital structure + weighted average cost of debt (after tax) * % debt in capital structure = 15%*(20/30) + 9%*(10/30)= 13%

34 Sample Question 15 A company has two divisions. Division A has operating income of $500 and total assets of $1,000. Division B has operating income of $400 and total assets of $1,600. The required rate of return for the company is 10%. The company s residual income would be? Solution: Residual income = NI Required return A: RI = *0.1 = 400 B: RI = *0.1 = 240 Total RI for company = = 640

35 Process Management and Quality Control Conformance costs Prevention costs incurred to prevent the production of defective units Appraisal costs incurred to discover and remove defective parts before they are shipped Nonconformance costs: Internal failure costs to cure a defect discovered before the product is sent to customer External failure costs to cure a defect discovered after the product is sent to customer

36 Sample Question 16 Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of: A. Prevention cost B. Appraisal cost C. Internal failure cost D. External failure cost Ans.: B. appraisal costs would detect individual products that do not conform to specifications. Prevention costs would prevent defective products. Internal failure costs are the costs of fixing defective products. External failure costs result when defective goods are not detected and are sold to a customer.

37 Formulas Part 2 DuPont ROE = Net profit margin * Asset turnover * financial leverage Net profit margin = NI/Sales Asset turnover = Sales/Avg. total assets Financial leverage = Avg. total assets/equity Capital Asset Pricing Model(CAPM) Cost of equity capital = Risk free rate + Risk Premium = Risk free rate + Beta*(mkt return risk-free rate) Risk-free rate is treasury bond rate

38 Sample Question 17 Using the Capital Asset Pricing Model(CAPM), the required rate of return for a firm with a beta of 1.25 when the market return is 14% and risk-free rate is 6% is: Solution: Cost of equity capital = Risk free rate + Risk Premium = Risk free rate + Beta*(mkt return risk-free rate) = 6% *(14%-6%) = 16%

39 Regression Analysis The Coefficient of Correlation (r) Measures the strength of the linear relationship between the independent variable (x) and the dependent variable (y) Projecting total cost The Coefficient of Determination (R²) The proportion of the total variation in the dependent variable (y) explained by the independent variable (x). The higher the R², the better the fit of the regression line

40 Sample Question 18 A management accountant performs a linear regression of maintenance cost versus production using a computer spreadsheet. The regression output shows an intercept value of $322,897. How should the accountant interpret this information? A. Y has a value of $322,897 when X equals zero. B. X has a value of $322,897 when Y equals zero. C. The residual error of the regression is $322,897. D. Maintenance cost has an average value of $322,897. Ans.: A. Generally, the linear regression is y = ax +b, when x=0, y = b = intercept value on Y =

41 Others Price strategy to make weaker competitor out of the market If choices are predatory, dynamic and cost plus I will go with predatory In the short term, predatory pricing through sharp discounting reduces profit margins, as would a price war, and will cause profits to fall. Competitors who are not as financially stable or strong may be cleared out of the competition

42 Sample Question Payback Period 19 Harvey Co. is evaluating a capital investment proposal for a new machine. The investment proposal shows the following information: Initial cost $500,000 Life 10 years Annual net cash inflows $200,000 Salvage value $100,000 If acquired, the machine will be depreciated using the straight-line method. The payback period for this investment is Solution: Payback period = initial cost/annual net cash flows=$500,000/200,000 = 2.5 years

43 Corporate Governance Board of director: no individual authority; act as a group Directors are agents who act on the behalf of corporation s behalf Conflict of interest will be upheld only if: After full disclosure, the transaction is approved by a disinterested majority of BOD or shareholders, or the transaction was fair and reasonable to the corporation

44 Sample Question 20 Knox, president of Quick Corp., contracted with Tine Office Supplies, Inc. to supply Quick s stationery on customary terms at a cost less than that charged by any other supplier. Know later informed Quick s BOD that Know was a majority stockholder in Tine. Quick s contract with Tine is: A. Void because of Knox s self-dealing B. Void because the disclosure was made after execution of the contract C. Valid because of Knox s full disclosure D. Valid because the contract is fair to Quick Ans.: D. The contract is fair and reasonable to Quick Company. The cost is even less than that charged by other supplier. It s a good contract for Quick.

45 Variances DM variance: Usage variance = std cost*(aq used std Q used) Labor variance: Efficiency variance = std rate*(ah used std H used) Variable overhead variance Efficiency variance = std rate*(actual labor hours/machine hours used-std labor hours/machine hours used) Fixed overhead variance: Budget/spending variance: budget fixed overhead - actual fixed overhead Production volume variance: budgeted fixed overhead budgeted fixed overhead/normal capacity*actual capacity exploited

46 Sample Question 21 To meet its monthly budgeted production goals, Acme Mfg. Co. planned a need for 10,000 widgets at a price of $20 per widget. Acme s actual units were 11,200 at a price of $18.50 per widget. What amount reflected Acme s price variance? Solution: Price variance = (Actual price std price)*actual units = ( )*11,200 = 16,800 Favorable

47 Risk Risk appetite the amount of risk an organization is willing to accept to achieve its goals Reflects the organization s culture and operating style Risk tolerance relates to the organization s objectives. It is the acceptable variation with respect to a particular objective Objectives are aligned with risk appetite, which drives risk tolerance levels

48 Sample Question 22 Generally, an organization will not operate beyond the limits of their risk appetite. Risk appetite has generally been exceeded when: A. The likelihood and impact of negative events exceed residual risks B. The likelihood and impact of negative events significantly exceeds residual risks C. The likelihood and impact of positive events is within the residual risk D. The likelihood and impact of positive events is significantly below residual risk Ans.: B. Residual risk represents the risk that remains after management has taken actions to mitigate negative events. If the likelihood and impact of those negative events significantly exceeds the residual risk, the operation is likely to exceed the organization s risk appetite.

49 Good luck! - F.Y.

USCPA1 月大型考前辅导系列直播点石成金 --BEC

USCPA USCPA1 月大型考前辅导系列直播点石成金 --BEC 嘉宾讲师 :Lai 老师考点 1 Topic: cloud computing, disaster recovery plan Cloud-based disaster recovery plan Disaster recovery plan: Disaster recovery consists of an entity's