CPA BEC Exam-Enterprise Risk Management-5 Components, by Darius Clark

The Business environment and concepts (BEC) exam expects a candidate to know something about Enterprise Risk Management, the components, the principles within the components. This upload breaks down the 5 components starting with governance and culture then strategy and objective setting, performance, review and revision, and finally information communication and reporting. After watching this video you will feel more prepared for the Prometric experience and be ready for what NASBA and the AICPA will expect you to know about the corporate governance area known as COSO Enterprise Risk Management. ERM changed in 2017 and this You Tube upload is a Simulation that will teach you the new ERM model. Other corporate governance topics to focus on as you study and prepare include officers vs directors vs shareholders
Sarbanes Oxley requirements for officers and audit committees, and when it comes to COSO, Control Environment and Monitoring are most important COSO elements for BEC. Besides Corporate Governance, the BEC exam will require you to know Financial Management topics such as degree of operating leverage vs Degree of financial leverage, Net Present Value (NPV) and Internal Rate of Return (IRR) as well as Weighted average cost of capital (WACC), ratios, and valuing equity. Make sure to know cost and manageria accounting topics also such as product costs vs period costs, fixed costs vs variable costs, know when net income is higher under absorption costing and when its higher under direct costing, know how to calculate cost of goods manufactured and from that, how to calculate cost of goods sold. Passing the BEC exam requires knowing how a flexible budget is prepared, the purpose of it and how it relates to variance analysis, and of course know the difference between a price variance and an efficiency variance. Many CPA Candidates need help with material, labor, and overhead variances such as the volume variance. Also, know the difference between conformance costs and non-conformance costs.
The AICPA blueprint also includes marginal analysis and what goes into the decision as to make vs buy, accept or reject a special order, sell or process further, keep or drop a segment. For Information Technology, (IT) know your general controls (segregation of duties between Systems Development, System Maintenance and Computer Operations) vs Application controls (input controls, processing controls output controls and file controls). Know several examples of IT application controls, especially input controls because input controls are by far the most important application controls, but you should also know some processing controls, output controls, and file controls. Know something about Data Storage, Data Documentation, and the systems development life cycle. Know something about cloud computing and types of systems especially ERP systems. Data Analytics like data mining, and data warehousing are now being tested. These topics are all in the i-75 BEC Course which would put you on the right road to passing the CPA BEC Exam. Economics is also tested in BEC, focus on emerging technologies such as multi factor authentication, Blockchain, AI, and Machine learning. Make sure to study these topics before and after you get your notice to schedule, (NTS).