CCA Taxation & Regulatory Compliance 3

Question 1

Under IRC Section 382, what event triggers a limitation on the use of a corporation's pre-change NOLs?

Accepted Answer

An ownership change exceeding 50 percentage points over 3 years

Answer

Section 382 limits NOL usage after an ownership change, defined as more than a 50-percentage-point shift in stock ownership among 5%-or-greater shareholders over a 3-year testing period.

Question 2

The Global Intangible Low-Taxed Income (GILTI) regime under Section 951A primarily targets which type of income?

Accepted Answer

Foreign subsidiary income exceeding a routine return on tangible assets

Answer

GILTI captures excess returns earned by controlled foreign corporations above 10% of their qualified business asset investment, targeting income attributable to intangibles in low-tax jurisdictions.

Question 3

Which regulatory body administers the Foreign Corrupt Practices Act (FCPA) for enforcement against public companies?

Accepted Answer

Both the DOJ and the SEC

Answer

The FCPA is enforced jointly by the DOJ (criminal provisions) and the SEC (civil provisions for issuers registered with the SEC).

Question 4

Under the Sarbanes-Oxley Act (SOX) Section 404, management must assess the effectiveness of internal controls over financial reporting using which recognized framework?

Accepted Answer

COSO Internal Control — Integrated Framework

Answer

SOX Section 404 requires management's internal control assessment to use a suitable, recognized framework, most commonly the COSO Internal Control — Integrated Framework.

Question 5

A corporation makes a charitable contribution of $500,000 in a year when its taxable income (before the deduction) is $4,000,000. What is the maximum allowable deduction?

Accepted Answer

$400,000

Answer

Corporate charitable contribution deductions are limited to 10% of taxable income computed before the charitable deduction, so 10% × $4,000,000 = $400,000.

(CCA) Certified Corporate Accountant Practice Test

(CCA) Certified Corporate Accountant Practice Test

CCA Taxation & Regulatory Compliance 3