Wiley CPAexcel Exam Review 2019 Study Guide: Business Environment and Concepts

Table of Contents:
About the Authors ix About the Business Professors xi Welcome to Business Environment and Concepts xiii Corporate Governance 1 Internal Control Frameworks 2 Introduction to COSO, Internal Control, and the COSO Cube 2 17 Principles of Internal Control 6 Types and Limitations of Accounting Controls 10 Internal Control Roles and Responsibilities 13 Internal Control Monitoring—Purpose and Terminology 16 Internal Control Monitoring and Change Control Processes 20 Enterprise Risk Management Frameworks 26 Introduction to Enterprise Risk Management: Strategy and Risk 26 ERM Components, Principles, and Terms 33 ERM Governance and Culture 36 ERM Strategy and Objective Setting 42 ERM and Performance 52 ERM Monitoring, Review, and Revision 62 ERM Communication and Reporting 66 Fraud Risk Management 72 Other Regulatory Frameworks and Provisions 79 Economic Concepts and Analysis 85 Introduction to Economic Concepts 86 Microeconomics 90 Introduction and Free-Market Model 90 Demand 92 Supply 95 Market Equilibrium 98 Elasticity 101 Consumer Demand and Utility Theory 107 Inputs and the Cost of Production 109 Market Structure and Firm Strategy 112 Introduction to Market Structure 112 Perfect Competition 113 Perfect Monopoly 116 Monopolistic Competition 118 Oligopoly 120 Summary of Market Structures 122 Macroeconomics 123 Introduction to Macroeconomics 123 Aggregate Demand 126 Aggregate Supply 132 Aggregate (Economy) Equilibrium 134 Gross Measures—Economic Activity 136 Gross Measures—Employment/Unemployment 140 Business Cycles and Indicators 143 Price Levels and Inflation/Deflation 146 Money, Banking, and Monetary/Fiscal Policy 150 International Economics 157 Introduction and Reasons for International Activity 157 Issues at the National Level 160 Role of Exchange Rates 163 Issues at Entity Level 167 Currency Exchange Rate Issue 167 International Transfer Price Issue 172 Globalization 176 Introduction to Globalization 176 Globalization of Trade 179 Globalization of Production 183 Globalization of Capital Markets 185 Globalization and Power Shifts 189 Becoming Global 193 Business Strategy andMarket Analysis 197 Introduction to Business Strategy and Market Analysis 197 Macro-Environmental Analysis 199 Industry Analysis 201 Entity/Environment Relationship Analysis 204 Generic Strategies 206 Summary and Extensions 210 FinancialManagement 213 Introduction to Financial Management 214 Concepts and Tools 215 Cost Concepts 215 Time Value of Money Tools 220 Interest Rate Concepts and Calculations 228 Financial Valuation 236 Introduction to Financial Valuation 236 Valuation Techniques—General 239 Valuation Techniques—CAPM 241 Valuation Techniques—Option Pricing 245 Valuation Techniques—Business Entity 248 Hedging and Derivatives 256 Capital Budgeting 264 Introduction and Project Risk 264 Evaluation Techniques 267 Introduction and the Payback Period Approach 267 Discounted Payback Period Approach 270 Accounting Rate of Return Approach 272 Net Present Value Approach 274 Internal Rate of Return Approach 277 Project Ranking 281 Capital Project Ranking Decisions 284 Financing Options 287 Introduction and Financial/Capital Structure 287 Short-Term (Working Capital) Financing 288 Introduction to Short-Term Financing 288 Payables 289 Standby Credit and Commercial Paper 292 Receivables and Inventory 294 Long-Term (Capital) Financing 296 Introduction to Long-Term Financing 296 Long-Term Notes and Financial Leases 297 Bonds 300 Preferred Stock 304 Common Stock 307 Cost of Capital and Financing Strategies 311 Working Capital Management 314 Introduction to Working Capital Management 314 Cash Management 316 Short-Term Securities Management 322 Accounts Receivable Management 326 Inventory Management 330 Current Liabilities Management 334 Ratios and Measures for Working Capital Management 335 Introduction to Ratios and Measures 335 Liquidity Measures 337 Operational Activity Measures 340 Financial Management Risk Concepts—Summary 343 Information Technology 349 Information Technology Governance 350 Risks and Controls in Computer-Based Accounting-Information Systems 350 The COBIT Model of IT Governance and Management 353 Introduction to Enterprise-Wide and Cloud-Based Systems 355 IT Functions and Controls Related to People 358 Role of Information Technology in Business 362 IT and Business Strategy 362 System Types by Activity 364 System Types by Data Structure 366 Data Structures, Software, and Databases 368 Information Systems Hardware 372 Transaction Processing 374 Emerging Technologies 378 Emerging Technologies in AIS 378 Big Data 382 Bitcoin and Blockchain 384 Artificial Intelligence and Machine Learning 389 Information Security/Availability 393 Protection of Information 393 IT Security Principles 393 Managing Cyber Risk: Part I—Applying COSO Principles to Cyber Risk 396 Managing Cyber Risk: Part II—A Framework for Cybersecurity 399 IT Policies 405 Introduction to E-Business and E-Commerce 407 E-Commerce Applications 409 ERM for Cloud Computing 412 Mobile Device, End-User, and Small Business Computing 414 Multi-Location System Structure 417 Computer Networks and Data Communication 418 The Internet—Structure and Protocols 422 Logical and Physical Access Controls 424 Logical Access Controls 424 Physical Access Controls 427 Encryption and Secure Exchanges 429 System Disruption/Resolution 432 Organizational Continuity Planning and Disaster Recovery 432 Backup and Restoration 435 Computer Crime, Attack Methods, and Cyber-Incident Response 437 Processing Integrity (Input/Processing/Output Controls) 441 Program Library, Documentation, and Record Management 441 Input and Origination Controls 443 Processing, File, and Output Controls 446 Accounting System Cycles 448 The Accounting System Cycle: Introduction 448 Revenue Cycle 451 Expenditure Cycle 455 Production Cycle 458 HR and Payroll Cycle 461 General Ledger, Reporting, and Financing Cycle 465 Systems Development and Maintenance 468 System Development and Implementation 468 Operations Management 473 Financial and Non-FinancialMeasures of Performance 474 Quality Management 474 Balanced Scorecard and Benchmarking 478 Competitive Analysis 482 Ratio Analysis 486 Risk Management 490 Performance Improvement Tools 493 Cost Accounting 498 Manufacturing Costs 498 Spoilage, Cost, and Inventory Flow 504 Cost Behavior Patterns 508 Cost-Volume-Profit Analysis 511 Absorption and Direct Costing 519 Job Costing 526 Process Costing 530 Joint and By-Product Costing 537 Sales and Direct Cost Variance Analysis 540 Overhead Variance Analysis 546 Process Management 551 Cost Relevance 551 Special Decisions 557 Transfer Pricing 561 Activity-Based Costing and Process Management 565 Planning Techniques 569 Budgeting 569 Forecasting Techniques 574 Index 579

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