BEC Practice Questions

Updated: September 8, 2019

Sample BEC Exam Questions

Here are some free sample BEC practice questions.   You can find full length CPA practice exams here.

Dodd Frank

Dodd Frank appears on both the REG exam and now also the BEC exam.  Most BEC MCQ’s about Dodd Frank relate to corporate governance issues.

Sample BEC Questions #1

Which of the following is not a key provision of The Wall Street Reform and Consumer Protection Act of 2010?

A. Create a new independent consumer protection watchdog to ensure American consumers receive clear, accurate financial information.

B. End the possibility that taxpayers will be asked to bail out financial firms that threaten the economy by imposing tougher capital and leverage requirements

C. Improve disclosure process by requiring CEOs and CFOs to personally certify company’s financial statements.

D. Create a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

The correct answer is: C. 

Personal certification of financial statements is a major provision of the Sarbanes Oxley Act.

Dodd Frank has three main provisions a) Consumer Protection b) End Too Big to Fail Bailouts c) Advance Warning System of systemic risk

Sample BEC Questions #2

The Wall Street Reform and Consumer Protection Act of 2010 requires a compensation committee to take into account certain independence factors prior to selecting any compensation consultants or other advisers. Which of the following is not an independence factor that be taken into account?

  1. The provision of other services to the issuer by the advisor.
  1. Whether the fees are consistent with industry norms.
  2. Any business or personal relationships of the advisor with any members of the compensation committee.
  3. Any ownership by the advisor of the issuer’s stock.

The correct answer is B.

The compensation committee must take into account A, C, D.

The compensation committee must also take into account the amount of fees received from the issuer relative to the consultant’s total revenue. However, industry compensation levels are not a part of the analysis.

Risk Analysis

BEC Sample Test Question #3

An oil drilling company calculates a 5% probability that a deep sea oil drill will fail. The expected repair cost is $120,000. What is the expected cost of the risk event?

  1. You would need to determine the amount of time the drill is offline in order to estimate the risk cost.
  2. The expected risk cost of the event is $6,000.
  3. The expected risk cost of the event is $120,000.
  4. You would need to determine lost revenues to calculate the expected risk cost.

The correct answer is B.

$120,000 X 5% = $6,000

Risk analysis is identifying risks that might increase the cost or lower the return of a particular project.

The analysis uses the probability of the expected event and the money value of this risk event.

A and D are incorrect because you would not take into consideration lost revenues in this analysis.

C is incorrect because it does not take into consideration the low probability (5%) of the risk event.

Cloud Computing

Cloud computing is a modern buzz word that you might see on the BEC exam. They have been testing on it.

BEC Practice Questions #4

Which of the following is not a component of cloud computing?

  1. Storage of data over the Internet instead of a local computer’s hard drive
  2. Accessing programs over the Internet instead of a local computer’s hard drive
  3. Having a dedicated network attached storage (NAS) hardware or server in residence
  4. Delivery of on-demand computer resources over the Internet.

The correct answer is C.

Cloud computing is simply the practice of using a network of remote servers hosted on the Internet to store, manage, and process data. In years past, data and software was hosted on a local server or a personal computer.

BEC Practice Questions #5

Which of the following is not a typical example of cloud computing?

A. Software as a Service (SaaS)

B. Platform as a Service (PaaS)

C. Utility as a Service (UaaS)

D. Infrastructure as a Service (IaaS)

The correct answer is C.

C.  Utility cloud services are an example of cloud computing. These are virtual storage and server options that organizations can access on demand.

However, the three main examples are SaaS, PaaS and IaaS.

A. Software as a Service (SaaS) delivers software as a service over the Internet, avoiding the need to install and run the application on the customer’s own computers and simplifying maintenance and support.

B. Platform as a Service (PaaS) delivers a computing platform as a service. It facilitates deployment of applications while limiting or reducing the cost and complexity of buying and managing the underlying hardware and software layers

D. Infrastructure as a Service (IaaS) delivers computer infrastructure, typically a platform virtualization environment as a service. Service is typically billed on a utility computing basis and amount of resources consumed.

Are you ready for the Business Environment & Concepts (BEC) section of the CPA Exam?

We offer over:

  • over 400 BEC practice questions with answers 
  • Each practice exam has 50 different questions that are most commonly tested
  • Increase your score with a total simulation of the MCQ section of the exam
  • Full length CPA practice exams from recent exams
  • You can get comfortable with the AICPA user interface with this BEC sample test


The BEC exam features 62 Multiple Choice Questions and 4 Task Based Simulations and 3 Written Communication Tasks.

The BEC multiple choice questions count for 50% of your total score. The SIM section counts for 35%. The Written communication section counts for 15%.

During the BEC Exam you will take five testlets.
1. 31 question MCQ Testlets
2. 31 question MCQ Testlet
3. Task Base Simulation Testlet with 2 Questions

***15 minute break

4. Task Based Simulation Testlet with 2 Questions
5. Written Communication Task Testlet with 3 Questions

You will want to do hundreds of BEC practice questions prior to the exam.


17-27% Corporate Governance

  • Internal control and enterprise risk management frameworks
  • Other regulatory frameworks and provisions

17-27% Economic Concepts and Analysis

  • Economic and business cycles
  • Market influences on business
  • Financial risk management

11-21% Financial Management

  • Capital structure
  • Working capital
  • Financial valuation methods and decision models

15-25% Information Technology (IT)

  • IT governance
  • Role of IT in business
  • Information security/availability
  • Processing integrity (input/processing/output controls)
  • Systems development and maintenance

15-25% Operations Management

  • Cost measurement concepts, methods and techniques
  • Variance analysis
  • Process management
  • Planning techniques