Core 1 - CPA NEW EXAM WITH COMPLETE SOLUTIONS
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
Overstaement of Pension
Net unrealized holding gains on AFS
Translation adjustments of Foreign Currency
Audit Planning - ANSWER BRAINSTOPS
Preliminary meetings with client
, Inquiry about new developments
Interim F/S
Non-audit staff
Assignments
Scheduling
External expertise
Pronouncements
Scheduling with the client
Audit Risk - ANSWER AR = IR x CR x DR
If dependence on CR is low, RMM is high, DR is low, Substantive testing is high
Fraud Triangle - ANSWER Motive
Rationalization
Opportunity
Quality control components- 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 phases- ANSWER CPER
Client acceptance & continuance
Planning
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
Overstaement of Pension
Net unrealized holding gains on AFS
Translation adjustments of Foreign Currency
Audit Planning - ANSWER BRAINSTOPS
Preliminary meetings with client
, Inquiry about new developments
Interim F/S
Non-audit staff
Assignments
Scheduling
External expertise
Pronouncements
Scheduling with the client
Audit Risk - ANSWER AR = IR x CR x DR
If dependence on CR is low, RMM is high, DR is low, Substantive testing is high
Fraud Triangle - ANSWER Motive
Rationalization
Opportunity
Quality control components- 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 phases- ANSWER CPER
Client acceptance & continuance
Planning
