Wiley CPA Examination Review, Outlines and Study Guides (Volume 1) - Softcover

Delaney, Patrick R.; Whittington, O. Ray

Softcover

ISBN 10: 0470453354 ISBN 13: 9780470453353

Publisher: Wiley, 2009

Synopsis

Everything today's CPA candidates need to pass the CPA exam

Published annually, this comprehensive two-volume paperback reviews all four parts of the CPA exam. Many of the questions are taken directly from previous CPA exams. Volume I contains all study guides and outlines, while Volume II contains all problem solutions. With 2,700 multiple choice questions and more than 75 simulations, these study guides provide all the information candidates need to master in order to pass the computerized Uniform CPA Examination.

O. Ray Whittington, PhD, CPA, CMA, CIA (Chicago, IL), is the Ledger Quill Director of the School of Accountancy at DePaul University and vice chair of the Auditing Standards Board of the AICPA. His previous positions were the Director of the School of Accountancy at San Diego State University and the Director of Auditing Research for the American Institute of Certified Public Accountants (AICPA). Patrick R. Delaney, PhD, CPA, was the Arthur Andersen LLP Alumni Professor of Accountancy and Department Chair at Northern Illinois University and was author of Audit Sampling: An Introduction, Fifth Edition (0-471-37590-X)..

About this title

About the Author

Ray Whittington, PhD, CPA, CMA, CIA, is the dean of the College of Commerce at DePaul University. Prior to joining the faculty at DePaul, Professor Whittington was the Director of Accountancy at San Diego State University. From 1989 through 1991, he was the Director of Auditing Research for the American Institute of Certified Public Accountants (AICPA), and he previously was on the audit staff of KPMG. He previously served as a member of the Auditing Standards Board of the AICPA and as a member of the Accounting and Review Services Committee and the Board of Regents of the Institute of Internal Auditors. Professor Whittington has published numerous textbooks, articles, monographs, and continuing education courses.

Patrick R. Delaney, deceased, was the dedicated author and editor of the Wiley CPA Exam Review books for twenty years. He was the Arthur Andersen LLP Alumni Professor of Accountancy and Department Chair at Northern Illinois University. He received his PhD in Accountancy from the University of Illinois. He had public accounting experience with Arthur Andersen LLP and was coauthor of GAAP: Interpretation and Application, also published by John Wiley & Sons, Inc. He served as Vice President and a member of the Illinois CPA Society’s Board of Directors, and was Chairman of its Accounting Principles Committee; was a past president of the Rockford Chapter, Institute of Management Accountants; and had served on numerous other professional committees. He was a member of the American Accounting Association, American Institute of Certified Public Accountants, and Institute of Management Accountants. Professor Delaney was published in The Accounting Review and was a recipient of the Illinois CPA Society’s Outstanding Educator Award, NIU’s Excellence in Teaching Award, and Lewis University’s Distinguished Alumnus Award. He was involved in NIU’s CPA Review Course as director and instructor.

From the Back Cover

Wiley CPA Exam Review, 36th Edition 2009-2010

Volume 1: Outlines and Study Guides

• Covers all four sections of the CPA examination point by point
• Stresses important topical areas to study for each part
• Helps establish a self-study preparation program
• Divides exam into 45 manageable study units
• Provides an outline format supplemented by brief examples and illustrations
• Makes material easy to read, understand, and remember
• Includes timely, up-to-the-minute coverage for the computerized exam
• Explains step-by-step examples of the "solutions approach"
• Contains all current AICPA content requirements for all four sections of the exam

Volume 2: Problems and Solutions

• Offers selected problems from all four examination sections
• Contains rationale for correct or incorrect multiple-choice answers
• Covers the new simulation-style problems-offering more than 75 practice questions
• Details a "solutions approach" to each problem
• Updates unofficial answers to reflect current laws and standards
• Groups multiple-choice questions into topical categories within modules for easy cross-referencing
• Provides a sample examination for each of the four exam parts

The format and content of the CPA exam keeps changing—be prepared!

The 36th Edition of the Wiley CPA Review is revised and updated for the computerized exam. To help candidates prepare for the exam, this edition includes a substantial number of new simulation questions. Passing the CPA exam on your first attempt is possible! We'd like to help.

Get Even More Information Online:
You'll find a wide range of aids for doing your best on the CPA exam at wiley.com/cpa, including content updates, CPA exam study and test-taking tips, and more. All Wiley CPA Exam Review products are listed on the site.

From the Inside Flap

Master Simulations with New AICPA Exam Functionality

Wiley CPA Exam review

#1 Best Seller

Volume 1O utlines and Study Guides

O. Ray Whittington, CPA, PhD

Patrick R. Delaney, CPA, PhD

Excerpt. © Reprinted by permission. All rights reserved.

Wiley CPA Examination Review, Outlines and Study Guides

By Patrick R. Delaney O. Ray Whittington

John Wiley & Sons

Copyright © 2009 John Wiley & Sons, Ltd
All right reserved.
ISBN: 978-0-470-45335-3

Chapter One

BEGINNING YOUR CPA REVIEW PROGRAM

General Comments on the Examination 1 Purpose of the Examination 1 Examination Content 2 Nondisclosure and Computerization of Examination 2 Types of Questions 3 Examination Process 3 State Boards of Accountancy 3 Exam Scheduling 5

Attributes of Examination Success 5 Knowledge of Material 5 Commitment to Exam Preparation 5 Solutions Approach 6 Grading Insights 6 Examination Strategy 6 Examination Confidence 7 Common Candidate Mistakes 7

Purpose and Organization of This Review Textbook 7 Other Textbooks 8 Ordering Other Materials 8 Working CPA Problems 8

Self-Study Program 9 Study Facilities and Available Time 10 Self-Evaluation 10 Using Note Cards 11 Level of Proficiency Required 12 Multiple-Choice Feedback 13 Conditional Candidates 13

Planning for the Examination 13 Overall Strategy 13 Weekly Review of Preparation Program Progress 14 Time Management of Your Preparation 15

To maximize the efficiency of your review program, begin by studying (not merely reading) this chapter and the next three chapters of this volume. They have been carefully organized and written to provide you with important information to assist you in successfully completing the CPA exam. Beyond providing a comprehensive outline to help you organize the material tested on the exam, Chapter 1 will assist you in organizing a study program to prepare for the exam. Self-discipline is essential.

GENERAL COMMENTS ON THE EXAMINATION

The Uniform CPA Examination is delivered in a computer-based format. This provides several advantages over the prior paper and pencil exam. You may take the exam one section at a time. As a result, your studies can be focused on that one section, improving your chances for success. In addition, the exam is no longer offered twice a year. During eight months of every year, you may take the exam on your schedule, six days a week and in the morning or in the afternoon.

Successful completion of the exam is an attainable goal. Keep this point foremost in your mind as you study the first four chapters in this volume and develop your study plan.

Purpose of the Examination

The Uniform CPA Examination is designed to test the entry-level knowledge and skills necessary to protect the public interest. These knowledge and skills were identified through a Practice Analysis performed in 2000, which served as a basis for the development of the content specifications for the new exam. The skills identified as necessary for the protection of the public interest include

Analysis-the ability to organize, process, and interpret data to develop options for decision making.

Judgment-the ability to evaluate options for decision-making and provide an appropriate conclusion.

Communication-the ability to effectively elicit and/or express information through written or oral means.

Research-the ability to locate and extract relevant information from available resource materials.

Understanding-the ability to recognize and comprehend the meaning and application of a particular matter.

The CPA examination is one of many screening devices to assure the competence of those licensed to perform the attest function and to render professional accounting services. Other screening devices include educational requirements, ethics examinations, and work experience.

The examination appears to test the material covered in accounting programs of the better business schools. It also appears to be based upon the body of knowledge essential for the practice of public accounting and the audit of a medium-sized client. Since the examination is primarily a textbook or academic examination, you should plan on taking it as soon as possible after completing your accounting education.

Examination Content

Guidance concerning topical content of the CPA exam can be found in a document prepared by the Board of Examiners of the AICPA entitled Uniform CPA Examination-Examination Content Specifications. The Board's objective in preparing this detailed listing of topics tested on the exam is to help "in assuring the continuing validity and reliability of the Uniform CPA Examination." These outlines are an excellent source of guidance concerning the areas and the emphasis to be given each area on future exams. We have included the content outlines in this volume by placing the corresponding outline for each section of the exam in the chapter containing related topical areas.

New accounting and auditing pronouncements, including those in the governmental and not-for-profit areas, are tested in the testing window starting six months after the pronouncement's effective date. If early application is permitted, a pronouncement is tested six months after the issuance date; candidates are responsible for the old pronouncement until it is superseded. The exam covers the Internal Revenue Code and federal tax regulations in effect six months before the beginning of the testing window. For the Business Law and Professional Responsibilities section, federal laws are tested six months following their effective date, and for uniform acts, one year after their adoption by a simple majority of jurisdictions. The AICPA posts content changes regularly on its Internet site. The address is www.cpa-exam.org.

Nondisclosure and Computerization of Examination

Beginning May 1996, the Uniform CPA Examination became nondisclosed. Before beginning the exam, candidates are required to sign a Statement of Confidentiality and Break Policy Statement, which provides

I hereby certify that I will respect the confidentiality of the Uniform CPA Examination. I attest that I will NOT:

Divulge the nature or content of any Uniform CPA Examination question or answer under any circumstance

Engage in any unauthorized communication during testing

Refer to unauthorized materials or use unauthorized equipment during testing

Remove or attempt to remove any Uniform CPA Examination materials, notes, or any other items from the examination room

I understand that I am required to report to the AICPA any examination question disclosures or solicitations for disclosure of which I am aware.

I understand that breaks are only allowed between testlets. I understand that I will be asked to complete any open testlet/simulation before leaving the testing room for a break.

In addition, I understand that failure to comply with this attestation may result in invalidation of my grades, disqualification from future examinations, expulsion from the testing facility and possible civil or criminal penalties.

The CPA exam is offered continually during the testing windows shown below.

One or more exam sections may be taken during any exam window, and the sections may be taken in any desired order. However, no candidate will be allowed to sit for the same section more than once during any given testing window. In addition, a candidate must pass all four sections of the CPA exam within a "rolling" eighteen-month period, which begins on the date he or she passes the first section. In other words, you must pass the other three sections of the exam within eighteen months of when you pass the first section. If you do not pass all sections within the eighteen-month period, credit for any section(s) passed outside the eighteen-month period will expire and the section(s) must be retaken.

The following table compares the sections of the prior pencil-and-paper exam with the new computer-based exam.

Types of Questions

The computer-based Uniform CPA Examination consists of two basic question formats.

1. Multiple-Choice-questions requiring the selection of one of four responses to a short scenario.

2. Simulations-case studies that are used to assess knowledge and skills in a context approximating that found on the job through the use of realistic scenarios and tasks, and access to normally available and familiar resources.

The multiple-choice questions are much like the ones that have constituted a majority of the CPA examination for years. And the good news is that these types of questions constitute about 75% of the total examination. The simulations are new. However, we have attempted in this manual to use the latest available information to design study materials that will make you successful in answering simulation problems. You should refer to the AICPA Web site (www.cpa-exam.org) for the latest information about the format and content of this new type of question.

The Business Environment and Concepts is 100% multiple-choice questions. For the other three sections that have simulations the break down of percentages is as follows:

Multiple-choice 70% Simulation requirements, other than those involving communications 20% Communications requirements of simulations 10% 100%

Examination Process

Taking the CPA examination involves the following steps:

1. Apply to take the examination (request, complete, and submit an application).

2. Payment of examination fees

3. Candidates are required to review the tutorial and sample tests.

4. Receive your Notice to Schedule.

5. Schedule your examination.

6. Take your examination(s).

7. Receive your Score Report(s).

State Boards of Accountancy

The right to practice public accounting as a CPA is governed by individual state statutes. While some rules regarding the practice of public accounting vary from state to state, all State Boards of Accountancy use the Uniform CPA Examination and AICPA advisory grading service as one of the requirements to practice public accounting. Every candidate should contact the applicable State Board of Accountancy to determine the requirements to sit for the exam (e.g., education, filing dates, references, and fees). For comparisons of requirements for various state boards and those policies that are uniform across jurisdictions, you should refer to the Web site of the National Association of State Boards of Accountancy (NASBA) at www.nasba.org.

A frequent problem candidates encounter is failure to apply in a timely manner. Apply to sit for the examination early. Also, you should use extreme care in filling out the application and mailing required materials to your State Board of Accountancy. If possible, have a friend review your completed application before mailing with check, photo, etc. Candidates may miss a particular CPA examination window simply because of minor technical details that were overlooked (checks not signed, photos not enclosed, question not answered on application, etc.). Because of the very high volume of applications received in the more populous states, the administrative staff does not have time to call or write to correct minor details and will simply reject your application. This can be extremely disappointing, particularly after spending many hours preparing to sit for a particular exam.

The various state boards, their Web sites, and telephone numbers are listed below. Be sure to inquire of your state board for specific and current requirements. It is possible for candidates to sit for the examination in another state as an out-of-state candidate. Candidates desiring to do so should contact the State Board of Accountancy in their home state.

Exam Scheduling

Once you have been cleared to take one or more parts of the exam by the applicable state board, you will receive by mail a "Notice to Schedule" and may then schedule to sit for one or more sections of the exam. When you receive the Notice to Schedule, verify that all information is correct and that the name appearing matches exactly the name on the identifications that will be used during the check-in at the testing center. A Test Center Locator and Scheduler tool is available on Prometric's Web site at www.prometric.com/cpa. This tool allows candidates to quickly determine the most convenient center and reserve a seat and time at the chosen center. Scheduling may also be accomplished by telephone (800-580-9648) or in person at a test center. To assure that you get your desired location and time period it is imperative that you schedule early. To get your first choice of dates, you are advised to schedule at least 45 days in advance. You will not be scheduled for an exam fewer than five days before testing. In addition, you must take the examination sections within the time period for which a Notice to Schedule is valid and before it expires.

You will not receive a written confirmation of your test appointment. Be sure to write down the date, time, location, and confirmation number for each of your appointments.

ATTRIBUTES OF EXAMINATION SUCCESS

Your primary objective in preparing for the CPA examination is to pass. Other objectives such as learning new and reviewing old material should be considered secondary. The six attributes of examination success discussed below are essential. You should study the attributes and work toward achieving/developing each of them before taking the examination.

1. Knowledge of Material

Two points are relevant to "knowledge of material" as an attribute of examination success. First, there is a distinct difference between being familiar with material and knowing the material. Frequently candidates confuse familiarity with knowledge. Can you remember when you just could not answer an examination question or did poorly on an examination, but maintained to yourself or your instructor that you knew the material? You probably were only familiar with the material. On the CPA examination, familiarity is insufficient; you must know the material. For example, you may be familiar with the concepts in accounting for leases (SFAS 13), but can you compute the present value of an annuity due under a lease agreement and record entries for the lessee and lessor? Once again, a very major concern must be to know the material rather than just being familiar with it. Knowledgeable discussion of the material is required on the CPA examination. Second, the Uniform Certified Public Accountant Examination tests a literally overwhelming amount of material at a rigorous level. The CPA examination includes material from the following courses:

Accounting

Auditing (including Auditing with Technology and Audit Sampling) Intermediate Financial Advanced Financial Cost/Managerial Governmental and Not-for-Profit Tax

Business Law Accounting Information Systems Finance Economics

Furthermore, as noted earlier, the CPA exam will test new material, sometimes as early as six months after issuance. In other words, you are not only responsible for material in the above courses, but also for all new developments in each of these areas.

This text contains outlines of accounting topics from FASB pronouncements, financial accounting courses, cost accounting courses, finance courses, etc. Return to the original material (e.g., FASB, your accounting textbooks, etc.) only if the outlines do not reinforce topical areas you already know.

(Continues...)

Excerpted from Wiley CPA Examination Review, Outlines and Study Guidesby Patrick R. Delaney O. Ray Whittington Copyright © 2009 by John Wiley & Sons, Ltd. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Edition details

• Publisher: Wiley
• Publication date: 2009
• ISBN 10: 0470453354
• ISBN 13: 9780470453353
• Binding: Paperback
• Language: English
• Edition number: 1
• Number of pages: 1239