Auditing Principles & Procedures Flashcards
6 cards from real CPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Auditing Principles & Procedures flashcards as text
What is budget variance analysis in CPA financial management?
Answer: Comparing actual spending against budgeted amounts to explain differences
Variance analysis compares actual results against budget, calculating differences and investigating causes.
What differentiates fixed from variable costs in CPA?
Answer: Fixed costs stay constant; variable costs change with volume
Fixed costs (rent, salaries) remain constant; variable costs (materials, commissions) fluctuate with activity volume.
What is cash flow management in CPA practice?
Answer: Optimizing the timing of money coming in and going out
Cash flow management tracks and optimizes the timing of inflows and outflows to ensure sufficient funds.
What is financial forecasting in CPA practice?
Answer: Predicting future conditions based on historical data and trends
Forecasting uses historical data and trends to project future financial conditions, supporting strategic planning.
What is an internal control in CPA financial management?
Answer: A process providing assurance about financial reporting reliability
Internal controls safeguard assets, ensure accurate reporting, promote efficiency, and ensure compliance.
What does ROI measure in CPA financial analysis?
Answer: Gain or loss relative to the investment amount
ROI compares net gain or loss to initial investment cost, helping compare profitability of different options.