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CMA Exam Part 2 Review Questions
IMA's Overarching Principles - Correct Answer-1. Honesty
2. Fairness
3. Objectivity
4. Responsibility
IMA's Four Standards - Correct Answer-1. Competence
2. Confidentiality
3. Integrity
4. Credibility
Resolution of Ethical Conflict - Correct Answer-a. Discuss the issue with
your immediate supervisor
b. Advance to the next level of management until addressed
c. Consult with confidential IMA ethics advisor
d. Seek external counsel
Competence (4) - Correct Answer-1. Maintain expertise though
continued learning
2. Adhere to laws, regulations, etc.
3. Provide adequate decision support
4. Recognize and communicate professional limitations
Confidentiality (3) - Correct Answer-1. Maintain unless authorized or
legally required
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, 2
2. Inform relevant parties of appropriate use
3. Do not use for unethical or illegal advantage
Integrity (3) - Correct Answer-1. Mitigate actual, avoid apparent, advise
possible
2. Avoid activities to cause prejudice
3. Abstain from discrediting activities
Credibility (3) - Correct Answer-1. Communicate fair and objectively
2. Disclose all relevant information
3. Disclose all delays or deficiencies in conforming with controls, leads,
etc.
Describe the provisions of the Foreign Corrupt Practices Act of 1977 -
Correct Answer-1. Accounting
a. Internal Controls
b. Accurate Records
2. Anti-Bribery
a. No domestic concern may offer corrupt payments
('grease' payments ok)
SOX 406(a) & 406(c) - Correct Answer-a. Companies must issue a Code
of Ethics to senior financial officers.
c. Code of Ethics must include standards to promote (basically IMA's
standards)
Corporate Responsibility for Ethical Behavior (7) - Correct Answer-1.
Foster ethics
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2. Ethical vs. Legal
3. Tone from the Top
4. Culture
5. Training
6. Monitoring (KPI's, whistleblower framework, etc.)
7. Ethical behavior framework is prerequisite for internal control
Process Controls for Ethical Behavior (3) - Correct Answer-1. Business
Process Reengineering
2. Quality Management
3. Continuous Process Improvement
Types of Fraud (2) - Correct Answer-1. Financial Misreporting - usually
management
2. Misappropriation of Asset - usually employee (immaterial)
Fraud Risk Model - Correct Answer-1. Opportunity - Controllable
2. Rationalization - Inherent
3. Motivation - Generally external
Fraud Investigation Techniques (3) - Correct Answer-1. Interviewing
2. Public Search
3. Documentation
Primary/Secondary Fraud Controls (4/2) - Correct Answer-1.
Preventative
2. Detective
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, 4
3. Corrective
4. Directive
A. Compensatory - Manager Review
B. Complementary - Deposit Slips
Segregation of Duties - Correct Answer-1. Custody
2. Authority
3. Record-Keeping
Net Working Capital Ratio - Correct Answer-= Net Working Capital/Total
Assets
Accounts Payable Turnover - Correct Answer-= Purchases/Average AP
Days' Purchases in AP - Correct Answer-= Days in Year/AP Turnover
Operating Cycle - Correct Answer-= Days' Sales in AR + Days' Sales in
Inventory
Cash Cycle - Correct Answer-= Operating Cycle - Days' Purchases in AP
Fixed Asset Turnover Ratio - Correct Answer-= Net Sales/Net Average
PPE
Total Assets Turnover - Correct Answer-= Net Sales/Average Total
Assets
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CMA Exam Part 2 Review Questions
IMA's Overarching Principles - Correct Answer-1. Honesty
2. Fairness
3. Objectivity
4. Responsibility
IMA's Four Standards - Correct Answer-1. Competence
2. Confidentiality
3. Integrity
4. Credibility
Resolution of Ethical Conflict - Correct Answer-a. Discuss the issue with
your immediate supervisor
b. Advance to the next level of management until addressed
c. Consult with confidential IMA ethics advisor
d. Seek external counsel
Competence (4) - Correct Answer-1. Maintain expertise though
continued learning
2. Adhere to laws, regulations, etc.
3. Provide adequate decision support
4. Recognize and communicate professional limitations
Confidentiality (3) - Correct Answer-1. Maintain unless authorized or
legally required
1
, 2
2. Inform relevant parties of appropriate use
3. Do not use for unethical or illegal advantage
Integrity (3) - Correct Answer-1. Mitigate actual, avoid apparent, advise
possible
2. Avoid activities to cause prejudice
3. Abstain from discrediting activities
Credibility (3) - Correct Answer-1. Communicate fair and objectively
2. Disclose all relevant information
3. Disclose all delays or deficiencies in conforming with controls, leads,
etc.
Describe the provisions of the Foreign Corrupt Practices Act of 1977 -
Correct Answer-1. Accounting
a. Internal Controls
b. Accurate Records
2. Anti-Bribery
a. No domestic concern may offer corrupt payments
('grease' payments ok)
SOX 406(a) & 406(c) - Correct Answer-a. Companies must issue a Code
of Ethics to senior financial officers.
c. Code of Ethics must include standards to promote (basically IMA's
standards)
Corporate Responsibility for Ethical Behavior (7) - Correct Answer-1.
Foster ethics
2
, 3
2. Ethical vs. Legal
3. Tone from the Top
4. Culture
5. Training
6. Monitoring (KPI's, whistleblower framework, etc.)
7. Ethical behavior framework is prerequisite for internal control
Process Controls for Ethical Behavior (3) - Correct Answer-1. Business
Process Reengineering
2. Quality Management
3. Continuous Process Improvement
Types of Fraud (2) - Correct Answer-1. Financial Misreporting - usually
management
2. Misappropriation of Asset - usually employee (immaterial)
Fraud Risk Model - Correct Answer-1. Opportunity - Controllable
2. Rationalization - Inherent
3. Motivation - Generally external
Fraud Investigation Techniques (3) - Correct Answer-1. Interviewing
2. Public Search
3. Documentation
Primary/Secondary Fraud Controls (4/2) - Correct Answer-1.
Preventative
2. Detective
3
, 4
3. Corrective
4. Directive
A. Compensatory - Manager Review
B. Complementary - Deposit Slips
Segregation of Duties - Correct Answer-1. Custody
2. Authority
3. Record-Keeping
Net Working Capital Ratio - Correct Answer-= Net Working Capital/Total
Assets
Accounts Payable Turnover - Correct Answer-= Purchases/Average AP
Days' Purchases in AP - Correct Answer-= Days in Year/AP Turnover
Operating Cycle - Correct Answer-= Days' Sales in AR + Days' Sales in
Inventory
Cash Cycle - Correct Answer-= Operating Cycle - Days' Purchases in AP
Fixed Asset Turnover Ratio - Correct Answer-= Net Sales/Net Average
PPE
Total Assets Turnover - Correct Answer-= Net Sales/Average Total
Assets
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