Wiley CPAexcel® Exam Review FOCUS NOTES

Contents

Preface

Corporate Governance and Enterprise Risk Management

Corporate Governance: Establish Incentives and Monitoring

Incentives to Defeat Agency Problem

Internal Controls

Enterprise Risk Management: Eight Components

Enterprise Risk Management: Limitations

Information Technology

Attributes of Paper versus Electronic Systems

Benefits of IT

Risks of IT

Systems Design and Process Improvement

A Seven-Step Process (PADDTIM)

Hardware

Size and Power of Computers

Storage Devices

Data Entry Devices

Software

Data Structure

Types of Computer Systems

The Accounting Process in an IT Environment

Electronic Commerce

Risks of E-Commerce

Networks

The Internet

Networks and Control Risk

Control Objectives for Information and Related Technology (COBIT)

Organization of an IT Environment

Organization in a Segregated Department

Systems Development and Maintenance

Operations in an IT Function

Other Technical Services

Controls in an IT Environment

General Controls

Application Controls

Input Controls

Processing Controls

Output Controls

Control Totals

Controls Over Microcomputers

Flowcharts

Economic Concepts

Demand Curve

Demand Curve Shifts

Positive Demand Curve Shift

Negative Demand Curve Shift

Elasticity of Demand

Consumer Demand and Utility

Supply Curve

Supply Curve Shifts

Factors Causing a Supply Curve Shift

Market Equilibrium

Short-Run Costs of Production

Long-Run Costs of Production

Measures of Economic Activity

Aggregate Demand and Supply

Effects of Price Inflation

Measuring Price Inflation

Demand-Pull Inflation

Cost-Push Inflation

Multiplier Effect

Business Cycle

Indicators of Business Cycles

Unemployment

Interest Rates

Government Involvement in the Economy

International Trade

Obstacles to Free Trade

Balance of Payments

Foreign Exchange Rates

Strategic Planning

Financial Risk Management

Expected Returns

Average Returns

Standard Deviation

Portfolio Risk

Loan Risks

Yield Curve

Derivatives

Risks Associated with Derivatives

Using Derivatives as Hedges

Valuing Derivatives

Time Value of Money

Capital Budgeting

Payback Method

Accounting Rate of Return

Internal Rate of Return

Net Present Value

Special Analyses for Decision Making

Probability Analysis

Relevant Costing

Lease versus Buy: Compare Both Options Using Discounted Cash Flow

Financial Management

Working Capital Management

Cash Management

Marketable Securities

Inventory Management

Economic Order Quantity (EOQ)

Reorder Point and Safety Stock

Just-in-Time (JIT) Purchasing

Receivables Management

Capital Structure

Long-Term Debt

Debt Covenants

Secured and Unsecured Bonds

Provisions Affecting Repayment of Bonds

Bond Interest Rates

Variations on Bond Interest

Common Stock

Preferred Stock

Leverage

Cost of Capital

Mergers

Asset and Liability Valuation

Performance Measures and Management Techniques

Measurement Frameworks

Balanced Scorecard

Value-Based Management

Business Process Management: Focus on Continuous Improvement in Processes to Meet Customers’ Needs

Profitability Ratios

Asset Utilization Ratios

Liquidity Ratios

Debt Utilization Ratios

Market Ratios

Benchmarking

Quality Control

Cost of Quality

Project Management

Cost Measurement and assignment

Cost Classifications

Costing Methods

Manufacturing Overhead

Job Order Costing

Process Costing

Spoilage and Scrap

Activity Based Costing (ABC)

Cost Estimation

Calculating Total Costs

Cost Drivers

High-Low Method

Regression Analysis

Planning, Control, and Analysis

Flexible Budgeting

Master and Static Budgets

Preparing a Master Budget

Budgeting Material Purchases and Payments

Standard Costing

Responsibility Accounting and Performance Evaluation

Transfer Pricing

Cost-Volume-Profit Analysis

Graphical Approach to Breakeven

Joint Products and By-products

Joint Product Costing

Accounting for By-Products

Product and Service Pricing

Index

EULA