 AICPA BEC : CPA Business Environment and Concepts ExamExam Dumps Organized by Martin Hoax
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BEC test
Format | BEC Course Contents | BEC Course Outline | BEC test
Syllabus | BEC test
Objectives
Business Environment and concept section is treated as one of the most challenging exams because of its extensive material and it deals with business and economic concepts. The CPA BEC section will help you to move one step further in business knowledge and help them apply the knowledge in real-world scenarios.
Business Environment and concepts covers:
Business environment in general, and its core concepts.
Foundational grounding in accounting and are exposed to underlying reasons for accounting implications
Financial management information technology, and business strategies in addition to accounting concepts.
Economic concepts, financial management, information systems and communications, strategic planning and operations management.
Testing to determine different business strategies with their knowledge in strategic planning and market risks.
Making financial decisions, forecasting trends in the market, and understanding internets implication in business.
Topic Percentage
Corporate Governance 16% 20%
Economic Concepts and Analysis 16% 20%
Financial Management 19% 23%
Information Systems and Communications 15% 19%
Strategic Planning 10% 14%
Operations Management 12% 16%
BEC1 Business Environment and Concepts (BEC)
BEC2 Section introduction
BEC6 Summary blueprint
BEC7 Area I Corporate Governance
BEC9 Area II Economic Concepts and Analysis
BEC11 Area III Financial Management
BEC13 Area IV Information Technology
BEC16 Area V Operations Management
The Business Environment and Concepts (BEC) section of the Uniform CPA
Examination (the Exam) tests knowledge and skills that a newly licensed CPA
must demonstrate when performing:
Audit, attest, accounting and review services
Financial reporting
Tax preparation
Other professional responsibilities in their role as certified public accountants
The content areas tested under the BEC section of the test
encompass five
diverse subject areas. These content areas are corporate governance, economic
concepts and analysis, financial management, information technology and
operations management. Reference materials relevant to the BEC section of the
Exam are included under References at the conclusion of this introduction.
Content organization and tasks
The BEC section blueprint is organized by content AREA, content GROUP and
content TOPIC. Each group or course includes one or more representative TASKS
that a newly licensed CPA may be expected to complete when performing audit,
attest, accounting and review services, financial reporting, tax preparation or
other professional responsibilities.
The tasks in the blueprint are representative. They are not intended to be (nor
should they be viewed as) an all-inclusive list of tasks that may be tested in the
BEC section of the Exam. Additionally, it should be noted that the number of
tasks associated with a particular content group or course is not indicative of
the extent such content group, course or related skill level will be assessed
on the Exam. Similarly, examples provided within the task statements should
not be viewed as all-inclusive.
Area II of the BEC section blueprint covers several courses related to Economic
Concepts and Analysis, including the following:
Knowledge of economic concepts and analysis that would demonstrate an
understanding of the impact of business cycles on an entitys industry or
business operation
Determining market influences on the business environment, such as
globalization
Determining the business reasons for, and the underlying economic substance
of, transactions and their accounting implications
Understanding financial risks and the methods for mitigating the impact of
these risks
Area III of the BEC section blueprint covers several courses related to Financial
Management, including the following:
Assessing the factors influencing a companys capital structure, such
as risk, leverage, cost of capital, growth rate, profitability, asset structure and
loan covenants
Calculating metrics associated with the components of working capital, such
as current ratio, quick ratio, cash conversion cycle, turnover ratios
Determining the impact of business decisions on working capital
Understanding commonly used financial valuation and decision models and
applying that knowledge to assess assumptions, calculate the value
of assets and compare investment alternatives
Area IV of the BEC section blueprint covers several courses related to
Information Technology (IT), including the following:
Understanding the role of IT and systems, including the use of data in
supporting business decisions.
Identifying IT-related risks associated with an entitys information systems
and processes, such as processing integrity, protection of information and
system availability, including those risks introduced by the relationships with
third-parties.
Identifying application and IT general control activities, whether manual,
IT dependent or automated, that are responsive to IT-related risks, such
as access and authorization controls, system implementation testing and
incident response plans.
Area V of the BEC section blueprint covers several courses related to Operations
Management, including the following:
Understanding business operations and use of quality control initiatives and
performance measures to Excellerate operations
Application of cost accounting concepts and use of variance analysis
techniques
Utilizing budgeting and forecasting techniques to monitor progress and
enhance accountability
The test
focuses on testing higher order skills. Based on the nature of the task,
each representative task in the BEC section blueprint is assigned a skill level.
BEC section considerations related to the skill levels are discussed below.
Remembering and Understanding is tested in all five areas of the BEC section.
Remembering and understanding tasks focus on the knowledge necessary
to demonstrate an understanding of the general business environment and
business concepts, such as those involving enterprise risk management.
Application is also tested in all five areas of the BEC section. Application
tasks focus on general courses such as those found in the subjects of
economics and information technology, and the day-to-day financial
management tasks that newly licensed CPAs perform, such as those
involving calculations involving ratios, valuation and budgeting.
Analysis skills, tested in Areas II, III and V involve tasks that require a
higher level of analysis and interpretation. These tasks, such as comparing
investment alternatives using calculations of financial metrics, financial
modeling, forecasting and projection, frequently require newly licensed CPAs
to gather evidence to support inferences.
The representative tasks combine both the applicable content knowledge
and the skills required in the context of the work that a newly licensed CPA
would reasonably be expected to perform. The BEC section does not test any
content at the Evaluation skill level as newly licensed CPAs are not expected to
demonstrate that level of skill in regards to the BEC content.
References Business Environment and Concepts
The Committee of Sponsoring Organizations of the Treadway Commission (COSO):
Internal Control Integrated Framework
Enterprise Risk Management Integrating with Strategy and Performance
COSO-issued application material, thought papers and guides related to the above frameworks
Sarbanes-Oxley Act of 2002:
Title III, Corporate Responsibility
Title IV, Enhanced Financial Disclosures
Title VIII, Corporate and Criminal Fraud Accountability
Title IX, White-Collar Crime Penalty Enhancements
Title XI, Corporate Fraud Accountability
Current business periodicals
Current textbooks on:
Accounting Information Systems
Budgeting and Measurement
Corporate Governance
Economics
Enterprise Risk Management
Finance
Management
Management Information Systems
Managerial Accounting
Production Operations
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The mobilephone buzzed on the nightstand—as soon as, twice, three times—waking Ankit Jain from what had been a restful sleep. before he may attain the mobilephone, three more texts came via. He knew who it would be: his boss, Thorsten Konig, the CEO of Ivory Tower, the realm’s leading on-line training platform.
In solar Valley speakme crypto.It’s time.payments + funding.How fast can they do it?Pls name ASAP to discuss.bring in Shira and Paul.
Ankit sighed. Thorsten changed into an excellent technologist who had begun and sold DayTradz, one of the most first on-line retail trading platforms, earlier than he turned into even 30. Ivory Tower become his 2d, also vastly successful, project—one that become disrupting greater schooling through providing notable college and graduate-school lessons to students all over the world. Some, such because the intro to economics class taught by means of a Nobel Prize winner donating his time, had been extremely good value, while others, akin to courses on personal branding with Kris Jenner and on M&A with Carl Icahn, were obscenely high priced. The conception changed into to have the platform’s wealthiest users subsidize its poorest. The influence Ivory Tower had executed within the 5 years due to the fact that its launch—and within the 13 months since its IPO—became marvelous. however from time to time being the CFO of a quick-relocating business led via a “loopy genius” become onerous.
For months now Thorsten had been talking about integrating cryptocurrency into the company. He turned into an enormous proponent of Bitcoin1 and had put about 5% of his own portfolio into it. a couple of weeks in the past the CEO had asked Ankit to have his crew seem to be into accepting lessons payments and maintaining a few of Ivory Tower’s money reserves in crypto. In media interviews, Thorsten had additionally started alluding to “our crypto future,” sparking speculation that he would construct or purchase a crypto buying and selling platform.2 however Ankit knew that Thorsten become committed to Ivory Tower for at least the following few years; he simply wanted to mix it along with his new passion.
To Thorsten, taking charges and making investments in Bitcoin were elementary concerns—equivalent to doing company in euros as well as bucks, which Ivory Tower already did. Bitcoin adoption may enable the U.S.-based mostly business to further hedge itself in opposition t dollar inflation.3
Ankit knew that things had been an awful lot more complex. besides the fact that children cryptocurrencies have been gaining mainstream appeal, even based ones like Bitcoin have been enormously volatile, with value swings that made them seem to be more like speculative shares. sure, it changed into feasible to take price in Bitcoin and then convert it to dollars, however the business had to work out even if it made sense to construct the interior capability vital or to rent a 3rd-birthday party seller to deal with transactions. And investing income in crypto turned into a further factor thoroughly. Ankit’s head damage just considering in regards to the monetary-reporting challenges. Then there become his fiduciary accountability as CFO: Did shareholders in reality need Ivory Tower to bet on crypto if doing so might chance the capital crucial down the road for developing improved expertise and classes and expanding the company’s reach?
unluckily, Thorsten rarely took no for a solution. So Ankit rolled off the bed and texted his teammates. “Morning. T asking about crypto again. Zoom at 8 to discuss? He’ll be a part of at 8:30.”
within a minute, he’d bought two thumbs up. through now each person changed into used to Thorsten’s impromptu meetings. Ankit just hoped this one wouldn’t conclusion with an edict.
Evaluating the alternate options
“I imply they will accept lessons funds in Bitcoin.” Paul Abebe, Ivory Tower’s controller, had jumped in immediately on the Zoom name. everyone had been working from home on the grounds that the beginning of the pandemic, and the enterprise had decided it wouldn’t require any person to return to its big apple headquarters. “It’s stressful—not as liquid as nondigital currencies, undoubtedly. There would be IRS reporting and anti-money-laundering compliance concerns to believe. however the query is: Why should still they do it?”
“Thorsten says it suits with their ethos: embracing the future, spearheading new applied sciences, shaking up the stodgy academic neighborhood,” Shira Peretz, Ankit’s deputy, noted. “Edo loves the theory too.” She was relating to Edo Sanger, Ivory Tower’s CMO. “He thinks it's going to make for tremendous press.”
“and should that translate into more clients and revenues?” Paul asked skeptically. “how many of their college students even care about this?”four
“neatly, their blockchain and crypto classes are truly a few of their most generic, however Thorsten admits that at this point most individuals probably received’t pay in Bitcoin,”5 Ankit referred to. “He’s more attracted to investing their extra cash in it. thoughts?”
“It’s a bad idea,” Paul pointed out.
“Agree,” Shira stated. “There’s no GAAP suggestions on how to account for these things yet.6 but the AICPA says Bitcoin isn’t considered cash or a cash equal, inventory, or a financial instrument, so it must be handled like an intangible asset, which skill that if its cost falls, they need to mark it down on their balance sheet. but if it goes up, they file these positive aspects simplest after they promote. So if we’re meaningfully invested, they may be taking huge, random hits to their web salary for no business-connected intent. speaking the company’s performance will get extra complex.”
“but if Bitcoin goes up in the end, could it supply us good points that smooth out or raise profitability?” Ankit asked. “Our shareholders aren’t trying to find superb quarterly results. They desire us to invest accurately to grow the company.”
“I’m sorry, but an asset that goes from a valuation of $60K to $30K in a single month can't be regarded a prudent investment,” Paul countered. “How will they know that Bitcoin can be value as lots subsequent 12 months because it is now? and should they use just Bitcoin or additionally Ether or any of the thousands of different cryptocurrencies?”
“For now, Thorsten’s speakme best about Bitcoin,” Ankit mentioned. “It has the greatest user base and longest heritage. And he’s convinced it will go up in value.”
“If their shareholders wish to guess on crypto, they could do it at once,” Paul mentioned. “after they filed their S-1 for the IPO, they didn’t say the rest a couple of Bitcoin treasury.”
“smartly, we’d disclose it, and investors could sell if they’re not on board,” Shira stated. Then she shook her head. “however I agree that it’s too soon, too risky. I vote for accepting Bitcoin funds—if it’s manageable with out too tons compliance and IT complications. Investments, no.”
“I’m a no and a no,” Paul mentioned.
simply then, Ankit noticed that Thorsten turned into in the Zoom waiting room. “adequate, guys, here comes T,” he spoke of, letting the CEO in.
“hi there, friends!” Thorsten said as his face popped up on-reveal. “What a superb day to be speaking in regards to the future. seize me up on their crypto plans.”
Ankit took the lead. “We’ve evaluated their alternate options, and whereas they appreciate the expertise merits of Bitcoin, we’re going to advise against—”
“Aha! I knew you guys would say this. Your job is to be concerned concerning the spreadsheets. I be mindful. but that’s why I’m here: to assist you see the large photograph. Bitcoin is the long run. There isn't any world in which it underperforms relative to main currencies over the next decade.7 they now have so plenty profit reserves. Why wouldn’t they put a few of it into property that produce high returns they might make investments within the enterprise? They may get appreciation up to 10 times what we’d otherwise see. We’ll aid propel Bitcoin ahead and democratize the movement of funds, simply as we’re democratizing schooling. They have to do that!”
Ankit might inform that Paul and Shira have been deflated, if now not shocked. This did seem like a fait accompli. What Thorsten desired, Thorsten usually bought.
The Board’s issues
After setting his crew to work finding out how to take crypto payments and spending just a few hours modeling quite a lot of degrees of investment in Bitcoin, Ankit checked his email. Cindy Yu, the company’s latest director and the pinnacle of its audit committee, had sent a message asking him to call her.
“Cindy, hi! I simply saw your message. What’s up?”
“hello, Ankit. Thanks for getting lower back to me. I’m calling with some board considerations. will they speak off the checklist?”
“Of course.”
“Thorsten has outlined to several administrators that he’s attracted to making Bitcoin a bigger part of Ivory Tower’s business. at the equal time, he’s for my part—and never insignificantly—invested in Bitcoin. some of us are concerned that this at least has the look of a conflict of pastime.” eight
“I see.”
“greater vital, a few of us have questions about the wisdom of taking their treasury into crypto. obviously, I are expecting that we’ll discuss this at the board meeting subsequent week, but i needed to provide you with a heads-up. i believe that Thorsten has asked you to latest a plan to us. youngsters, they desire your candid opinion. He has his allies, of route. however as nonexecutive administrators, they need to make selections within the enterprise’s most suitable hobby, and they predict the finance crew to make thoughts based on the equal standards.”
“Of path.”
“i do know Thorsten is a force of nature and doesn’t make it convenient to disagree with him.9 but if you do, the board needs to hear it, and you may have their support.”
pressure from the CEO
At 7, Ankit became out for a jog when his mobilephone rang: Thorsten.
“Ankit. Hope I didn’t trap you at a bad time. i needed to reconnect on crypto.”
“just on a run. No difficulty.”
“Ah, retain operating. i can speak as you go,” Thorsten pointed out. “I need you to grasp that I take note your hesitancy. And they are able to take it sluggish. but I have a tune list of realizing what’s subsequent in enterprise. First DayTradz, now Ivory Tower—both huge successes, notwithstanding many didn’t consider they may well be. that you could have confidence me again now. Bitcoin has outperformed the greenback on the grounds that its inception, is gaining recognition with their person base, and personally could be greater productive and secure than typical currencies. different reducing-aspect organizations are already starting to bounce in. now could be the time for us to as neatly. Their support will assist the crypto circulate. We’ll take power from tremendous institutions and put it into the hands of the americans. This matches completely with their mission.”
Ankit wasn’t bound a way to reply, but Thorsten didn’t press any extra. “good enough, proceed your exercise, my buddy. And tomorrow we’ll run towards the long run together!”
After the name, Ankit picked up his pace and tried unsuccessfully to zone out to his iPhone track. become Thorsten appropriate? If financial trade turned into going to movement towards crypto, Ivory Tower should still actually get forward of the shift. but what if governments clamped down on cryptocurrency? If Bitcoin misplaced all its cost? The board members had been appropriate to ask hard questions. And Ankit wasn’t at all sure how to answer them.
The consultants respond: should still Ankit again Thorsten’s Bitcoin plans or now not?
Amrita Ahuja is the CFO of rectangular.
Ankit should help the rush into Bitcoin—as both an permitted form of payment and an investment on the balance sheet. At rectangular they agree with there’s a excessive chance that the information superhighway will have its personal native cryptocurrency, and Bitcoin is the strongest contender. It’s probably the most comfortable and resilient, with a principled, decentralized, clear, and consensus-based mostly building mannequin. They foresee a future in which agencies gained’t should navigate fiat currencies and local guidelines and laws that create complexity and high costs for purchaser transactions across borders. cost, time, and safety inefficiencies will fall away, and corporations that accept Bitcoin funds will be in a position to serve any one on the planet, including people who've historically been marginalized by using economic programs or who distrust federal banks (as in Latin the usa and likely other areas). This matches completely with Ivory Tower’s mission of bringing pleasant greater schooling to underserved communities globally, and the business should still get forward of the game.
Thorsten’s also correct that having Bitcoin on the stability sheet will exhibit to shoppers, personnel (existing and future), shareholders, and onlookers that it has “skin in the video game” and will aid make a more inclusive information superhighway forex a truth. furthermore, Bitcoin can supply attractive diversification and act as an inflation hedge.
rectangular invested 5% of its money and cash equivalents in Bitcoin. They believe that the lengthy-term possibility is value any close-time period volatility and that their funding will allow us to learn and help Excellerate the device whereas expanding have confidence in it. To that conclusion, rectangular has install the Crypto Open Patent Alliance to increase entry to cryptotechnology via a collaborative patent library; rectangular Crypto, an independent team entirely focused on contributing to the Bitcoin open-supply work; a $10 million Bitcoin clean-power initiative to incentivize miners to make use of renewable sources; and a $5 million endowment to fund training about Bitcoin and promote its adoption. Ivory Tower may similarly be on the leading edge of network development, building first rate relationships with regulators to allow client insurance plan and handle dangerous actors while additionally fostering innovation and identifying how to master custody, coverage, exchange, accounting, payroll, tax reporting, and compliance.
Ankit, of direction, needs to address the entire considerations that his team and Cindy Yu have raised. however with Thorsten’s aid and a clear strategy and execution plan, he can make the case that the enterprise has the chance to be at the forefront of this rapidly rising fashion. here is the time for him to truly lead as CFO.
Roxi Wen is the CFO of Invitae.
The case against Ivory Tower’s relocating to accept and hang Bitcoin is way better than the one for it. Ankit may still oppose the plan—however only after having a frank dialog with Thorsten to define the downsides and explore different ideas.
Paul is appropriate that cryptocurrency is just too unstable to be of balance-sheet exceptional. If Ivory Tower wishes an inflation hedge, many options—gold and genuine
property, for example—are much less risky. moreover, managing Bitcoin transactions and custody will require the finance branch to construct completely new capabilities, similar to safe storage for Bitcoin keys, and it’s uncertain that that could be a good use of workforce time. And the regulatory ambiance is extremely unclear; complicated disclosure guidelines or divestment necessities could crop up at any time.
I also discover it difficult to trust individuals will want to pay lessons in Bitcoin. Most buyers of crypto wish to grasp it for capital appreciation and as an inflation hedge, similar to Thorsten. Why would purchasers use their holdings to pay for classes, logging taxable capital features now?
Thorsten thinks Bitcoin will be more relaxed and efficient than currencies backed by governments. but that’s debatable, given that fiat funds, chiefly in developed nations, movement securely and infrequently more hastily than Bitcoin blocks do.
bound, Bitcoin can also in the future trade as commonly and simply as dollars, euros, and yen. Ivory Tower might get useful advertising value from being forward of the curve and solidifying its acceptance as a forward-looking innovator. although, given the complexities surrounding Bitcoin, I think there are more-positive methods to benefit competitive expertise.
Ankit must artfully control Thorsten. if you work with a smart, speedy-relocating leader who's full of concepts, you commonly think your job is to perpetually say no. but that’s no longer a productive relationship. in its place, you want to have candid strategic conversations.
both guys should still focus on what Thorsten truly needs. Is it to embrace Bitcoin? Or to develop into part of the blockchain revolution? And if it’s the latter, is there yet another option to deploy the know-how in the business? as an instance, may it be used to set up an open, disbursed operating device where clients might create their own classes? might price collection occur by means of blockchain even when valued clientele pay in usual currencies? These are plenty broader questions, and Thorsten’s solutions could aid Ankit discover a way to honor the CEO’s wishes without doing precisely as he says.
At my business my colleagues have lots of ideas about what to do with their enormous money reserves, but no rely how wild their guidance are, I in no way simply reject them. I sit down with individuals, ask what they’re trying to achieve, and brainstorm how to achieve these desires even if it’s in ways diverse from what they’ve counseled. Ankit should do the identical with Thorsten.
Of course, the CEO may put his foot down and persuade the board to lower back him. Elon Musk turned into capable of do this with Bitcoin investments at Tesla. but even then, Ankit may pitch a lessen-risk test—in all probability creating a small, separate holding enterprise to test Bitcoin in.
The CFO has authority and credibility with Thorsten and the board. He shouldn’t be afraid to use it.
HBR’s fictionalized case reviews existing complications faced via leaders in real businesses and present options from consultants. This one is in line with the HBS Case look at “Accounting for Bitcoin at Tesla” (case no. 121074-PDF-ENG ), through Charles C.Y. Wang and Siyu Zhang.
A edition of this article seemed within the November–December 2021 problem of Harvard enterprise assessment.
