You Don't Need Luck

You Don’t Need Luck

www.CPAreviewforFREE.com

57 Weeks of Operation -> No Marketing -> 4,572,909 Page Views (that’s an awful lot of added points)

Lesson 42

From: Joe


(1) – Here’s a great idea that I would urge you to try.

I am always fascinated by things that help people do well at whatever they seek to do. Some people just seem to have a knack for getting things right and it is always interesting to wonder what gives them that edge. Recently, I have been reading a book titled “Blink.” It is by Malcolm Gladwell who has become quite well known recently for writing another best seller “Outliers.”

“Blink” is about a lot of things but I guess you could say it is mostly about how the brain works. Gladwell talks a lot about brain research and what those findings indicate. I was reading along the other day and came to a section that I found both fascinating and exciting. From page 56: “Two Dutch researchers did a study in which they had groups of students answer forty-two fairly demanding questions from the board game Trivial Pursuit. Half were asked to take five minutes beforehand to think about what it would mean to be a professor and write down everything that came to mind. Those students got 55.6 percent of the questions right. The other half of the students were asked to first sit and think about soccer hooligans. They ended up getting 42.6 percent of the Trivial Pursuit questions right. The ‘professor’ group didn’t know more than the ‘soccer hooligan’ group. They weren’t smarter or more focused or more serious. They were simply in a ‘smart’ frame of
mind, and, clearly, associating themselves with the idea of something smart, like a professor, made it a lot easier—in that stressful instant after a trivia question was asked—to blurt out the right answer. The difference between 55.6 and 42.6 percent, it should be pointed out, is enormous. That can be the difference between passing and failing.”

Wow, isn’t that interesting? “The difference between passing and failing.” I have thought about this research probably a thousand times since I read it. Think of the implications. Whenever you are sitting down to answer questions on www.CPAreviewforFREE.com (hopefully once or twice every day), try thinking about professors or smart people for a few moments before you start. Write down whatever comes to mind about being smart and how it feels. Just use five minutes as a warm up exercise. When you are studying, getting the questions right is always better than getting them wrong because that builds your confidence and helps you develop a strong foundation level of knowledge.

But, of course, the main reason that I bring this up relates to your actually taking the CPA Exam. When you go into the Prometric Center to take the CPA Exam, you now know what to think about. Everyone seems to have a different set of rituals that they perform as they get ready to begin the test. Clearly, this research indicates that thinking about smart people can be a significant help to your score. Perhaps you can think about one of your teachers or a person you know who just always seems brilliant. Stay calm and ponder how it feels to be that person and have that level of knowledge, to seemingly have all of the right answers, to be able to see things so clearly. Don’t try to be too intense. Just let your mind think about the really smart people you have met in your life and what that was like.

As Gladwell says: the difference between 55.6 and 42.6 percent is enormous.

The research indicates that having that “smart” mindset can add some serious points to your score, even your CPA Exam score.


(2) – Last Tuesday, in New York City, the AICPA held its semi-annual meeting with the folks like myself who create preparation material for the CPA Exam just to keep us properly updated. I jotted down some notes that I thought I would pass along. However, as I always say in such cases, I was listening and writing stuff down very quickly. Do not assume any of this is 100 percent accurate without additional verification. I tried to write everything down but I’m not a stenographer by trade.

From the AICPA:
--A lot of candidates come to the exam thinking that they will be able to use Excel and Word which they already know well. However, the examiners reminded us that the exam actually uses “Excel-like” and “Word-like” programs. Not quite the same. Consequently, they really urged us to urge you guys to go to www.cpa-exam.org and go through the “Tutorial and Sample Tests” just to be comfortable with the actual features you’ll find on the exam. I agree—no matter how you prepare, I think that is a good investment of time.
--Candidate growth has been above 10 percent per year recently and they expect the numbers to continue to grow by around 8 percent per year. Because of the recession, more and more accountants want to add the CPA designation to help them get jobs or help them to retain their jobs. It is not a bad time to get the CPA Exam passed.
--The pass rate remains around 48 to 49 percent per section.
--They will start testing international standards “no earlier than 2011.” Quite obviously, more information will be made available as the time nears. At that time, they will start mixing in some international questions but they assured us that they will let everyone know the standards being tested on each question.
--Instead of the current system of having two simulations in FAR, Regulation, and Auditing & Attestation, they are going to switch over to having 6-7 “task-based” simulations. That is probably not going to happen until late in 2010. The task-based simulations will be shorter and focus on only a single subject area. More simulations but shorter ones that are more focused in a single area. Again, you can expect to get a lot more information on that well in advance of the change.
--Currently, there are two written communication questions in three sections: FAR, Regulation, and Auditing & Attestation. They have decided that they really don’t need to test your written communications skills three times (that certainly seems reasonable). So, again probably in late 2010, they are going to switch the written communications question to just BEC. I do think that will be an improvement. I will let you know as soon as I find out more about that. It is likely that they will announce the timing of some of these changes very soon.
--They asked us to remind you about “Candidate Care.” If you had a problem at the testing site, you have the right to call up and report it to them. It has to be an “exam issue” and not a content issue or an application issue. For example, if your screen freezes up and it is not fixed quickly enough or if there is too much noise in the room or it is too hot. They said to call 1-800-CPA-EXAM and ask for “Candidate Care.”
--If you are taking the CPA Exam as a New York candidate, they wanted to remind everyone that New York is changing from a 120 hour requirement to a 150 requirement this summer. You can get the new rules by going to www.nasba.org. Many states change their rules periodically so if you are planning to take the exam in the future, do check your state occasionally for changes.
--They are continuing to investigate the possibility of physically giving the CPA Exam in countries outside of the United States. They think that might happen in a few countries late in 2010. But, as you can see from a lot of what I have mentioned, they hope to have more specific information fairly soon.

As I learn more about any of these changes, I will pass them along to you through these email lessons.


(3) – Our normal reminder: if you want to unsubscribe, just scroll to the bottom of this email lesson and click on the appropriate link.


(4) – I was surfing the Internet last night and came across one of my own recent email lessons that had been posted to a site. It is always fun to see your own work up on the ‘Net on someone else’s site. Several people had made comments about how great our site was.

One guy, though, wrote something like “This motivation is great but I’m not sure I’d trust the site for my preparation.”

I just had to laugh. We’ve NEVER asked anyone to trust us. Heck, it is the people who are charging you $2,500 who are asking you for your trust. Think about that. Our site is free. You can see all the questions and answers for free. The other review courses charge you thousands BEFORE they show you anything much at all. And, this guy was worried about trusting us.

We do not ask for your trust—we are the only people in CPA Review who specifically do not ask for trust.

However, we do ask for you to be a wise consumer. We ask you to be a good steward of your own money.

Use our site for 3-4 weeks. We are free so try us first. Go back to Lesson 41 (you can find that at www.cpareviewforfree.com) and get the steps that we recommend for you to follow. After 3-4 weeks, if you still want to spend a lot of money, those other review programs will be glad to take “your trust” and your money.

Remember, we are not out for you to make 100.
We are not out for you to get every question correct.
We are not seeking perfection.
We just want you to pass. We believe we have the very best questions and answers in the business.

But, don’t trust us—try it and see for yourself.


(5) – I have a picture of Muhammad Ali here on my wall, over my computer. The saying that accompanies that picture is one that I try to remember every day: “When a man says ‘I cannot,’ he has made a suggestion to himself. He has weakened his power of accomplishing that which otherwise would have been accomplished.”

I fully realize that you are pushing yourself to pass the CPA Exam. And, I fully realize that it takes some serious work. And, I fully realize that it is easy to get discouraged. When you read a question and don’t know the answer, it is easy to think of yourself as stupid. When you miss a couple of questions in a row, you start doubting yourself.

Don’t Do That!!!!
Don’t Do That!!!!

Never doubt yourself. You CAN pass the CPA Exam. I promise you that. I won’t promise you much but I will promise you that. I have worked with thousands and thousands of candidates since 1980. With the time, energy, care, desire, and focus, every single one of them could pass. Okay, none of them could have made a 100. Heck, I couldn’t make 100. But, everyone one of them could pass. And, so can you.

It is just a journey. If you keep putting one foot in front of another, you can walk from Oregon to Florida. Your CPA preparation is just a long journey. Eventually (hopefully sooner rather than later), if you just keep reading one question after another and keep going carefully over the answers, you will add enough points to make it happen. I believe that completely. You need to believe that as well.

Doubt is a killer. As soon as you “I cannot,” you have taken 10 steps backwards. You have given yourself a reason to slack off, you have given yourself an excuse, you have pulled the plug from your own intensity.

If I could make one wish for you, it would not be that you pass the exam or that you get easy questions or that you become successful. Those are just goals; they don’t really change much. If I could make one wish, it would be that you would believe in yourself 100 percent. Because that confidence is what will carry you to accomplish any and all of your goals.

Yeah, the work is tough but it is work that you can do.
Yeah, there are sacrifices to be made but never more than you can really bear.

If you can take “I cannot” out of your vocabulary, one day you will be able to say “I passed all four sections of the CPA Exam.”


(6) – Now for a little practice. And, before I begin, let me remind you of one thing I said in my previous lesson. “If you get a question correct, move on. Don’t sit and congratulate yourself. If you miss a question, read the answer carefully and find the step you missed and figure out what you missed in doing that step. Write down 10 words or less to help you get the question/step right the next time you see it. Don’t spend time writing pages—keep it to 10 words. You want to improve the odds that you can get the question right the next time. Reading the answer for missed questions may be the single most important thing you do in this process. I cannot stress how important this list of 10 word explanations can be for you in the end.”


FAR

James Attenborough is studying the financial statements for the Hawthorne Roberts Corporation. This company owns shares in Microsoft and several other companies. Consequently, it reports an Investment in Trading Securities on its year-end balance sheet with a balance of $18,765. What does that figure represent?

A – It is impossible to tell without reading the notes to the financial statements.
B – The $18,765 was the historical cost paid for these shares.
C – The $18,765 is the fair value of the shares on the balance sheet date.
D – The $18,765 is the lower of the cost or market value of these shares at the end of the year.

Answer is C

Investments in trading securities are being held for a relatively quick sale and are reported at fair value regardless of whether that figure is above or below the cost of acquisition. Changes in the fair value are reported as gains or losses in determining the company’s net income.


Auditing & Attestation

The CPA firm of Jeter and Cano is auditing the financial statements produced by Beckett Corporation. The shares of Beckett are publicly-traded on the New York Stock Exchange. What group is in charge of setting the auditing rules that Jeter and Cano must follow in performing this audit?

A – The American Institute of Certified Public Accountants (AICPA)
B – The Auditing Standards Board (ASB)
C – The Public Company Accounting Oversight Board (PCAOB)
D – The Financial Accounting Standards Board (FASB)

Answer is C

According to www.pcaob.org, “the PCAOB is a private-sector, non-profit corporation, created by the Sarbanes-Oxley Act, to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.”


Regulation

The Fuld Company filed for bankruptcy on March 23, 2009. Company management discussed the possibility of reorganization (Chapter 11 bankruptcy) but eventually opted for liquidation (Chapter 7 bankruptcy). The company owes each of the following amounts. Within the liquidation process, which is most likely to be paid?

A – Federal income tax of $9,000.
B – Administrative expense of $8,000 due to the attorneys doing the legal work necessary for liquidation.
C - $4,000 owed as a salary to one of the company’s employees as of March 23.
D - $1,000 owed to an employee benefit plan resulting from work done in the two months prior to March 23.

Answer is B

To provide a logical structure for liquidation, bankruptcy laws put claims into a priority list with the items listed first being paid first. A partial list of those debts (in order of priority) would be: administrative expenses, wages owed at the date of the bankruptcy filing up to $10,950 per person, contributions to employee benefit plans up to $10,950, consumer deposits up to $2,425 per person, taxes, and—finally—all other unsecured claims.


BEC

A company reports sales of $800,000, operating expenses of $500,000, cash of $44,000, stockholders’ equity of $345,000, and earnings per share of $3.00. The company also has $575,000 in noncurrent liabilities and pays a cash dividend of $.75 per share to its 20,000 shares of outstanding common stock. What is the company’s dividend payout ratio?

A – 16 percent
B – 25 percent
C – 28 percent
D – 34 percent

Answer is B

The dividend payout ratio is the company’s cash dividend per share ($.75) divided by the earnings per share for the same period ($3.00). It is the percentage of the reported income that goes to the owners in the form of dividends. Here, the dividend payout ratio is 25 percent or $.75/$3.00.


I’ll leave you with one final quote from Muhammad Ali. Certainly a person who has given us an awful lot of great quotes: “Wouldn't it be a beautiful world if just 10 percent of the people who believe in the power of love would compete with one another to see who could do the most good for the most people?”



Joe Hoyle
www.youtube.com/watch?v=LjwHxVbZq1o

Co-Founder
CPA Review for FREE