Core 1 – CPA-Questions and All Correct
Answers.
4 Criteria for Finance Lease - Answer TT - Title Transfer
BPO - Bargain purchase option
75% - Lease term is more than 75% of its useful life
90% - PV of min lease payment is 90% or more of fair value of assets
Income statement structure - Answer ON the TIDE iN OC
Operating Income
Non-op income
Taxes
Income for continued ops
Discontinued ops
Extraordinary items
Net income
Other comprehensive income
Comprehensive Income
Components in OCI - Answer DENT
Derivative Cash Flow Hedges
Excess Adjustment of Pension
Net unrealized holding gains on AFS
Translation adjustments of Foreign Currency
Audit Planning - Answer BRAINSTOPS
Basic discussions with client
Ask about recent developments
Interim F/S
Non-audit personnel
Staffing
Timing
Outside assistance
Pronouncements
Scheduling with the client
, Audit Risk - Answer AR = IR x CR x DR
If reliance on CR is low, RMM is high, DR is low, Substantive testing is high
Fraud Triangle - Answer Motivation
Rationalization
Opportunity
Quality control elements - Answer HEAL ME (applies to entire firm, all engagements)
HR
Ethical Requirements
Acceptance & continuance of client relationships
Leadership responsibilities for quality within firm
Monitoring
Engagement performance
Audit stages - Answer CPER
Client acceptance & continuance
Planning
Execution
Reporting
10 Fundamental GAAS - Answer TIPPICANOE (Applies to each individual engagement)
Training & Proficiency
Independence
Professional care
Planning & supervision
Internal controls
Corroborative Audit Evidence
Accounting Principles
No change
Omitted disclosures - none
Express opinion
Inherent Limitations of Internal Control - Answer COCO
Answers.
4 Criteria for Finance Lease - Answer TT - Title Transfer
BPO - Bargain purchase option
75% - Lease term is more than 75% of its useful life
90% - PV of min lease payment is 90% or more of fair value of assets
Income statement structure - Answer ON the TIDE iN OC
Operating Income
Non-op income
Taxes
Income for continued ops
Discontinued ops
Extraordinary items
Net income
Other comprehensive income
Comprehensive Income
Components in OCI - Answer DENT
Derivative Cash Flow Hedges
Excess Adjustment of Pension
Net unrealized holding gains on AFS
Translation adjustments of Foreign Currency
Audit Planning - Answer BRAINSTOPS
Basic discussions with client
Ask about recent developments
Interim F/S
Non-audit personnel
Staffing
Timing
Outside assistance
Pronouncements
Scheduling with the client
, Audit Risk - Answer AR = IR x CR x DR
If reliance on CR is low, RMM is high, DR is low, Substantive testing is high
Fraud Triangle - Answer Motivation
Rationalization
Opportunity
Quality control elements - Answer HEAL ME (applies to entire firm, all engagements)
HR
Ethical Requirements
Acceptance & continuance of client relationships
Leadership responsibilities for quality within firm
Monitoring
Engagement performance
Audit stages - Answer CPER
Client acceptance & continuance
Planning
Execution
Reporting
10 Fundamental GAAS - Answer TIPPICANOE (Applies to each individual engagement)
Training & Proficiency
Independence
Professional care
Planning & supervision
Internal controls
Corroborative Audit Evidence
Accounting Principles
No change
Omitted disclosures - none
Express opinion
Inherent Limitations of Internal Control - Answer COCO
