CEBS GBA/RPA3 - Module 5 - Overseeing
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
The Financial Accounting Standards Board (FASB) issued the
FASB Accounting Standards Codification (ASC or Codification)
as the single source of authoritative, nongovernmental, U.S.
generally accepted accounting principles (GAAP). The
Codification is updated through the issuances of FASB
Accounting Standards Updates (ASUs). What are the purposes
of these ASUs? - Correct Answers ✅FASB does not consider
ASUs as authoritative in their own right. Instead, new ASUs
serve only to update the Codification and provide background
information about the new guidance.
Explain how the Codification treats the accounting and
reporting standards for employee benefit plans. - Correct
Answers ✅The Codification addresses employee benefit
plans by locating their treatment in three separate topics
concerned with reporting standards:
1. FASB ASC Topic 960, Plan Accounting - Defined Benefit
Pension Plans, establishes the accounting and financial
reporting standards for defined benefit retirement plans.
2. FASB ASC Topic 962, Plan Accounting - Defined
Contribution Plans, includes the accounting and financial
reporting standards for defined contribution retirement plans.
3. FASB ASC Topic 965, Plan Accounting - Health and Welfare
Benefit Plans, provides the accounting and financial reporting
standards for health and welfare benefit plans.
,CEBS GBA/RPA3 - Module 5 - Overseeing
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
Explain the purpose of ASC Topic 960. - Correct Answers
✅ASC Topic 960 establishes financial accounting and
reporting standards for the annual financial statements of
defined benefit pension plans. FASB believes ASC Topic 960 is
generally consistent with the views of the U.S. DOL and the
American Academy of Actuaries. This means that most
private pension plans will be able to prepare one set of
financial statements in accordance with ASC Topic 960 for
filings under ERISA and for distribution to other users.
ASC Topic 960 applies to which plans? - Correct Answers
✅ASC Topic 960 applies to all ongoing plans, funded or
unfunded, that provide pension benefits for the employees of
one or more employers or for the members of a trade or
other employee association, including the following:
a. Plans subject to ERIA
b. Plans not subject to ERISA
c. Plans with no intermediary funding agency or plans that
may be financed through (1) one or more trust funds, (2) one
or more contracts with insurance entities, or (3) a
combination thereof.
Plans maintained outside the US that are similar to plans
maintained within the US are also subject to these rules if the
financial statements of such plans are intended to conform to
GAAP.
, CEBS GBA/RPA3 - Module 5 - Overseeing
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
ASC Topic 960 does not apply to government-sponsored
social security plans.
All pension plans that issue financial statements in conformity
with GAAP, including plans with fewer than 100 participants,
are covered by ASC Topic 960.
Summarize the accounting and reporting requirements of
ASC Topic 960. - Correct Answers ✅a. The plan financial
statements should be prepared on the accrual basis of
accounting and should include a statement of net assets
available for benefits as of the end of the plan year and a
statement of charges in net assets available for benefits for
the plan year then ended.
b. Plan investments should be presented at their fair value,
except for insurance contracts, which should be presented in
the same manner as required for filing under ERISA (i.e. fair
value or contract value)
c. Information should be included about the actuarial present
value of accumulated plan benefits and significant changes
therein
d. Accumulated plan benefit information may be disclosed in
one of three places: (1) on the face of the statement of net
assets available for benefits and on changes in the net assets
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
The Financial Accounting Standards Board (FASB) issued the
FASB Accounting Standards Codification (ASC or Codification)
as the single source of authoritative, nongovernmental, U.S.
generally accepted accounting principles (GAAP). The
Codification is updated through the issuances of FASB
Accounting Standards Updates (ASUs). What are the purposes
of these ASUs? - Correct Answers ✅FASB does not consider
ASUs as authoritative in their own right. Instead, new ASUs
serve only to update the Codification and provide background
information about the new guidance.
Explain how the Codification treats the accounting and
reporting standards for employee benefit plans. - Correct
Answers ✅The Codification addresses employee benefit
plans by locating their treatment in three separate topics
concerned with reporting standards:
1. FASB ASC Topic 960, Plan Accounting - Defined Benefit
Pension Plans, establishes the accounting and financial
reporting standards for defined benefit retirement plans.
2. FASB ASC Topic 962, Plan Accounting - Defined
Contribution Plans, includes the accounting and financial
reporting standards for defined contribution retirement plans.
3. FASB ASC Topic 965, Plan Accounting - Health and Welfare
Benefit Plans, provides the accounting and financial reporting
standards for health and welfare benefit plans.
,CEBS GBA/RPA3 - Module 5 - Overseeing
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
Explain the purpose of ASC Topic 960. - Correct Answers
✅ASC Topic 960 establishes financial accounting and
reporting standards for the annual financial statements of
defined benefit pension plans. FASB believes ASC Topic 960 is
generally consistent with the views of the U.S. DOL and the
American Academy of Actuaries. This means that most
private pension plans will be able to prepare one set of
financial statements in accordance with ASC Topic 960 for
filings under ERISA and for distribution to other users.
ASC Topic 960 applies to which plans? - Correct Answers
✅ASC Topic 960 applies to all ongoing plans, funded or
unfunded, that provide pension benefits for the employees of
one or more employers or for the members of a trade or
other employee association, including the following:
a. Plans subject to ERIA
b. Plans not subject to ERISA
c. Plans with no intermediary funding agency or plans that
may be financed through (1) one or more trust funds, (2) one
or more contracts with insurance entities, or (3) a
combination thereof.
Plans maintained outside the US that are similar to plans
maintained within the US are also subject to these rules if the
financial statements of such plans are intended to conform to
GAAP.
, CEBS GBA/RPA3 - Module 5 - Overseeing
and Managing Plan Audits Practice
Questions with Complete Solutions
(Latest 2025)
ASC Topic 960 does not apply to government-sponsored
social security plans.
All pension plans that issue financial statements in conformity
with GAAP, including plans with fewer than 100 participants,
are covered by ASC Topic 960.
Summarize the accounting and reporting requirements of
ASC Topic 960. - Correct Answers ✅a. The plan financial
statements should be prepared on the accrual basis of
accounting and should include a statement of net assets
available for benefits as of the end of the plan year and a
statement of charges in net assets available for benefits for
the plan year then ended.
b. Plan investments should be presented at their fair value,
except for insurance contracts, which should be presented in
the same manner as required for filing under ERISA (i.e. fair
value or contract value)
c. Information should be included about the actuarial present
value of accumulated plan benefits and significant changes
therein
d. Accumulated plan benefit information may be disclosed in
one of three places: (1) on the face of the statement of net
assets available for benefits and on changes in the net assets
