Questions with Complete Solutions

CEBS GBA/RPA3 - Module 5 - Overseeing and Managing Plan Audits Practice Questions with Complete Solutions (Latest 2025) The Financial Accounting Standards Board (FASB) issued the FASB Accounting Standards Codification (ASC or Codification) as the single source of authoritative, nongovernmental, U.S.generally accepted accounting principles (GAAP). The Codification is updated through the issuances of FASB Accounting Standards Updates (ASUs). What are the purposes of these ASUs? - Correct Answers ✅FASB does not consider ASUs as authoritative in their own right. Instead, new ASUs serve only to update the Codification and provide background information about the new guidance.Explain how the Codification treats the accounting and reporting standards for employee benefit plans. - Correct Answers ✅The Codification addresses employee benefit plans by locating their treatment in three separate topics

concerned with reporting standards:

• FASB ASC Topic 960, Plan Accounting - Defined Benefit

Pension Plans, establishes the accounting and financial reporting standards for defined benefit retirement plans.

• FASB ASC Topic 962, Plan Accounting - Defined

Contribution Plans, includes the accounting and financial reporting standards for defined contribution retirement plans.

• FASB ASC Topic 965, Plan Accounting - Health and Welfare

Benefit Plans, provides the accounting and financial reporting standards for health and welfare benefit plans. 1 / 3

CEBS GBA/RPA3 - Module 5 - Overseeing and Managing Plan Audits Practice Questions with Complete Solutions (Latest 2025) Explain the purpose of ASC Topic 960. - Correct Answers ✅ASC Topic 960 establishes financial accounting and reporting standards for the annual financial statements of defined benefit pension plans. FASB believes ASC Topic 960 is generally consistent with the views of the U.S. DOL and the American Academy of Actuaries. This means that most private pension plans will be able to prepare one set of financial statements in accordance with ASC Topic 960 for filings under ERISA and for distribution to other users.ASC Topic 960 applies to which plans? - Correct Answers ✅ASC Topic 960 applies to all ongoing plans, funded or unfunded, that provide pension benefits for the employees of one or more employers or for the members of a trade or

other employee association, including the following:

• Plans subject to ERIA
• Plans not subject to ERISA
• Plans with no intermediary funding agency or plans that

may be financed through (1) one or more trust funds, (2) one or more contracts with insurance entities, or (3) a combination thereof.Plans maintained outside the US that are similar to plans maintained within the US are also subject to these rules if the financial statements of such plans are intended to conform to

GAAP. 2 / 3

CEBS GBA/RPA3 - Module 5 - Overseeing and Managing Plan Audits Practice Questions with Complete Solutions (Latest 2025) ASC Topic 960 does not apply to government-sponsored social security plans.All pension plans that issue financial statements in conformity with GAAP, including plans with fewer than 100 participants, are covered by ASC Topic 960.Summarize the accounting and reporting requirements of ASC Topic 960. - Correct Answers ✅a. The plan financial statements should be prepared on the accrual basis of accounting and should include a statement of net assets available for benefits as of the end of the plan year and a statement of charges in net assets available for benefits for the plan year then ended.

• Plan investments should be presented at their fair value,

except for insurance contracts, which should be presented in the same manner as required for filing under ERISA (i.e. fair value or contract value)

• Information should be included about the actuarial present

value of accumulated plan benefits and significant changes therein

• Accumulated plan benefit information may be disclosed in

one of three places: (1) on the face of the statement of net

assets available for benefits and on changes in the net assets

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