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macc exit exam
all info pulled from quizlet
| Term | Definition |
|---|---|
| cost accounting decision making process | 1. determine environment and strategy 2. specify criterion and identify alternatives 3. perform cost and strategic analysis 4. short term 5. long term 6. selected and implement best course of action 7. evaluate performance |
| utilitarianism | process of identifying various courses of action that evaluates the consequences of actions of all stakeholders, then selects the option that creates the greatest good for the greatest number of people |
| act utilitarianism | examines specific actions to determine whether the action provides the greatest net benefit |
| rule utilitarianism | select the action that conforms to the correct moral rule that produces the greatest net benefits |
| rights principles | 1. john locke's rights theory- humans were born with natural rights 2. kant's categorical imperative-maintains that each of us has a worth or dignity that must be respected. humanity should not be treated as means to an end |
| justice theory (rawls) | liberty- everyone has equal right 2 basic liberty difference- social & econmic inequalities are to be sorted so both meant to be to everyones advantage justice-fairness- basis of objectivity prcpl. in AICPA code creating stdrd of providing unbiased info |
| giving voice to values | near term skills neded to deal with ethical challenges know what to say, who to say it to, how to say it, and when it is right to say it |
| KPMG Framework | professional judgment-clarifies issues, considers alternatives, gathers and evaluates information, reach conclusion, and document rationale |
| integrated ethical framework | ethical sensitivity- identify ethical issues ethical judgment- identify and evaluate courses of action ethical intent- reflect on moral intensity of situation ethical behavior- take action |
| AICPA Principles | 1. responsibility 2. public interest 3. integrity 4. objectivity and independence 5. due care 6. scope/nature of services |
| whistleblowing obligation | accounting duty when it is motivated by a desire to protect the public |
| standards for tax services | not recommend tax return position unless good faith belief that the position has a realistic possibility of being sustained if challenged |
| PCAOB rules of ethics and independence | Rule 3520- auditor independence- accounting firm must be independent of its audit client throughout the audit and professional engagement period |
| moral intensity | degree to which an individual intentionally wants to act ethically higher intensity=greater likeliness individual is aware of ethical implications, more likely to blow whistle |
| sunk cost | has been incurred in the past or is already committed for future and is not relevant to decision making |
| relevant cost | future costs that will change as a result of a decision |
| variance analysis | compares the actual financial results to the forecast and explains the variances |
| price variance | (actual price-standard price)*actual quantity AP-BP*AQ |
| quantity variance | (actual quantity-standard quantity)*standard price AQ-BQ*BP |
| total overhead variance | (total variable overhead+total fixed overhead)-(total overhead application rate * standard labor hours allowed during this period's production) |
| variance disposition | variance accts crd forward on BS under assumption that over the year, fvrbl & unfvrbl interim vars will offset 1: if cost variances immaterial, close to COGS 2:if material, allocate to inv and COGS based on relative amt of period's std. cost in EOP bal |
| flexible budget variance | difference between flexible budget and actual results FBV=actual operating income-flexible budget OI |
| capital budget | listing of approved invstmt projects & anticipated cash inflows/outflows associated with projects linked to master budget linked to strategy & balanced scorecard generate relevant data for invstmt analysis conduct post-audits of cap invstmt projects |
| factory overhead over/underapplication disposition | overapplied=OH applied exceeds actual OH underapplied=OH applied under actual OH adjustment-adjust COGS- increase COGS if underapplied, decrease if overapplied |
| four costs of quality | 1. prevention costs 2. appraisal costs 3. internal failure costs 4. external failure costs |
| prevention costs | costs incurred to keep quality defects from occuring |
| appraisal costs | costs devoted to the measurement and analysis of data to determine conformity of outputs to specifications- costs associated with detecting output that doesn't conform to standards |
| internal failure costs | costs related to defective processes or defective products detected before delivery |
| external failure costs | costs associated with defective/poor quality outputs detected after being delivered to customers |
| operational accountability | whether the government has used its resources efficiently and effectively in meeting operating objectives. gov wide statements |
| fiscal accountability | compares actual financial results with legally adopted budgets. best achieved using modified accrual and current resources measurement. fund financial statements |
| interperiod equity | financial reporting should help users assess whether current-year revenues are sufficient to pay for services provided that year and whether future taxpayers will be required to assume burdens for services previously provided |
| gov wide financial statments | statement of net position statement of activities |
| fund financial statements | governmental statements-BS, stmt of revenues, expenditures, and changes in fund balance proprietary funds- stmt of NP, stmt of revenues, expenses, and changes in fund net position, stmt of cash flows fiduciary funds-stmt of fidcuciary NP, stmt of change |
| not for profit financial statements | statement of financial poistion statement of activities statement of cash flows |
| budgetary accounting | used for special revenue funds and all other funds with legally adopted budgets |
| property tax revenues | recognized when the tax is collected within the current period, or within 60 days of year end |
| normal spoilage | spoilage naturally occurring within manufacturing process DR: Material Control CR: WIP control Plug: MOH control |
| abnormal spoilage | spoilage external to manufacturing process dr material control cr wip control plug either loss from abnormal spoilage or moh control |
| 351 formation rules | transfer of property control test (80% rule) stock solely for property stock issued for services |
| transfer of property rule | contributors must transfer property (cash, real estate, IP) in exchange for stock |
| control test (80% rule) | transferors, as a group, must hold at least 80% of total combined voting power and 80% of all other classes of stock immediately after exchange |
| stock solely for property | if transferor receives boot, gain must be recognized, but only up to value of the boot |
| services for stock rule | stock issued for services isn't considered issued for property. if both contributed, then property value must be at least 10% of service's value to count towards 80% rule |
| dividend received deduction | corporations can deduct 50% of dividends received if they own less than 20% of paying corp. can deduct 65% for owning more than 20%, and up to100% if they are fully affiliated |
| partnership formation rules | 1. existence- can be formed by oral agreement or inferred by behavior 2. liability- general or limited 3. taxation- filed as a 1065 |
| inside basis | partnership's tax basis in its own assets (property, cash, equipment) |
| outside basis | partner's tax basis in partnership interest |
| s-corp eligibility rules | business must be domestic corporation 100 or fewer shareholders shareholders must be individuals, and us citizens/residents shareholders must agree to election unanimously only one class of stock |
| accumulated adjustment account (AAA) | tracks tax-paid undistributed s-corp earnings |
| E&P | tracks prior C-corp earnings (taxable as dividends) |
| distribution ordering | Distributions first come from AAA Then come from E & P Then reduce basis and trigger cap gains |
| 481 adjustment | when taxpayer changes accounting method- adjustment made to prevent items of income or deduction from being duplicated or omitted. positive adjustment (increase income) spread over 4 years negative adjustment taken year of adjustment |
| Balakrishnan, Blouin & Guay- Tax Aggressiveness and Corporate Transparency | topic- tax aggressiveness & disclosure core Q- how does aggressiveness relate to transparency? findings- more aggressive firms less transparent in reporting |
| chyz & gaertner- can paying too much or too little tax contribute to forced ceo turnover? | topic- taxes & ceo turnover core q- does paying unusually high/low taxes affect likelihood of forced CEO turnover? finding- both high and low effective tax rates associated with higher forced CEO turnover- boards think mismanagement |
| de simone, robinson, & stoomberg- distilling reserve for uncertain tax positions | topic- uncertain tax positions core q- what can a specific tax shelter reveal about firms reserves for uncertain tax positions finding: UTP reserves can be large, complex, and informative about risk and aggressiveness when analyzed |
| dhaliwal, gleason, & mills-last chance earnings managment | topic- earnings management via tax expense core q- do firms use tax expense as last resort to meet earnings forecasts findings- firms just meeting/barely beating forecasts often adjust expense to close small gaps, consistent w/ last chance earnings mgmt |
| dyreng, hanlon, maydew, & thornock- changes in corp effective tax rates over past 25 years | topic- long run effective tax rates core q- how have corp etrs changed over time, and for who? finding- avg ETRs have declined over past decades but is not uniform, some firms maintain consistent low etr suggesting persistent planning advantages |
| graham, hanlon, shevlin, & shroff- incentives for tax planning and avoidance: evidence from field | topic- managerial incentives & tax planning core q- what do execs say drive tax planning/avoidance in practice? finding-survey/interview evidence show mgmt care abt post tax cf but are constrained by reputation concerns, financial reporting, enforcement |
| hanlon & heitzman- review of tax research | topic- overview of tax research core q- what are main themes, methods, and open questions in tax research finding- research on tax avoidance, book-tax diffs, tax shelters, and real effects of taxation. highlights msmt challenges and future directions |
| hanlon & slemrod- what does tax aggressiveness signal? | topic- market reaction to tax shelters core q- how do markets react when firms linked to tax shelters finding- stock prices react negatively to tax shelter involvement- tax aggressiveness is value reducing when public |
| liv & nissim-taxable income, future earnings, and equity values | topic- taxable income & valuation core q- how informative is taxable income v book income for predicting future earnings/ valuing equity? findings- tax inc contains incremental info abt earnings beyond book inc- especially when differences are large |
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