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BEC (CPA Exam) (1).
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Exam of 9 pages for the course CISA: Domain #2, Part A: IT Governance at CISA: Domain #2, Part A: IT Governance (BEC (CPA Exam) (1).)
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BEC (CPA Exam)5 Components of COSO ERM framework - ANS-GO PRO
1. Governance and Culture
2. Strategy and Objective-Setting
3. Performance
4. Review and Revision
5. Information, Communication, and Reporting
5 components of COSO internal control framework - ANS-CRIME
1. Control Activities
2. Risk assessment
3. information and communication
4. monitoring of controls
5. control enviroment
COSO - ANS-Committee of Sponsoring Organizations
Who does the audit committee comprise of? - ANS-- a financial expert
- independent directors
Inflation calculation - ANS-[(Current year CPI - Last year CPI) / Last year CPI] x 100]
Consumer Price index Calculation - ANS-(Prices in a period / Prices in the base year) x 100
cross elasticity - ANS-- degree of change in the demand for one product due to a change in the
demand for another product
- % change in demand for product X / % change in the price of product Y
- if cross elasticity is a positive number, it implies the goods are substitutes
- if cross elasticity is negative number, it implies goods are complementary
Demand elasticity - ANS-- the percentage change in quantity demanded divided by the
percentage change in price.
- % change in quantity demand/ % change in price
How are the price and quantity supplied related - ANS-- directly related
- if price goes up, quantity supplied goes up
- ex. tesla
, opportunity cost - ANS-equals the benefits of selecting the alternative activity
Nominal rate of interest - ANS-= real rate of inflation + inflation rate
What is a business cycle trough? - ANS-- low levels of economic activity
- under-use of resources
- investors unwilling to risk new investments in productive capacity
- purchase power remains stable
Absolute value of price elasticity of demand > than 1.. - ANS-demand is elastic
- as price increases, demand decreases
Expansionary phase - ANS-- business incr. capital inv
If demand is inelastic.. - ANS-- elasticity less than one
- 1% price decr. would lead to a less than 1% quantity incr. and total revenue will decrease w/
decr. in price
What increases the money supply? - ANS-- federal reserve purchasing federal securities
Increase in demand & decrease in product supply = - ANS-price increases and output quantity
remains uncertain
inflation adjustment factor - ANS-current yr CPI/last year CPI
business cycle in order of occurrence - ANS-- peak, contraction, recession, trough, recovery
Economies of scale - ANS-- present when average costs diminish with higher productive
volumes
- results in decr. average costs over a range of increased output
When price elasticity of demand is elastic... - ANS-- revenue will decrease
Characteristics of a recession - ANS-- increase in unemployment
- incr in inventories
- decline in income levels
- potential national income > actual national incomes
- 2 consecutive periods of economic decline
Deflation - ANS-- decrease in the general level of prices
Incremental Cost - ANS-the difference in total cost b/w two alternatives
"Peak" of the business cycle - ANS-- economy at natural rate of unemployment
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