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F1FAB Revision Question Bank - Contents - j14-j15 (Encrypted)
F1FAB Revision Question Bank - Contents - j14-j15 (Encrypted)
ACCA
PAPER F1
ACCOUNTANT IN BUSINESS
No responsibility for loss occasioned to any person acting or refraining from action as a result of any
material in this publication can be accepted by the author, editor or publisher.
This training material has been prepared and published by Becker Professional Development
International Limited
16 Elmtree Road
Teddington
TW11 8ST
United Kingdom.
Copyright 2014 DeVry/Becker Educational Development Corp. All rights reserved.
The trademarks used herein are owned by DeVry/Becker Educational Development Corp. or their
respective owners and may not be used without permission from the owner.
All rights reserved. No part of this training material may be translated, reprinted or reproduced or
utilised in any form either in whole or in part or by any electronic, mechanical or other means, now
known or hereafter invented, including photocopying and recording, or in any information storage and
retrieval system without express written permission. Request for permission or further information should
be addressed to the Permissions Department, DeVry/Becker Educational Development Corp.
Acknowledgement
Past ACCA examination questions are the copyright of the Association of Chartered Certified
Accountants and have been reproduced by kind permission.
(ii)
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Page
Answer
Marks
1
2
1001
1001
4
4
3
5
1001
1001
4
4
7
8
1002
1002
4
4
9
10
1002
1002
4
4
11
13
1002
1003
4
4
14
15
1003
1003
4
4
16
17
1003
1004
4
4
18
19
1004
1004
4
4
20
21
1004
1005
4
4
22
23
1005
1005
4
4
Date worked
Personal Protection
Porter
Eland
Gross Domestic Product
ORGANISATIONAL STRUCTURE
11
12
Product-oriented structure
Greg Pye
ORGANISATIONAL CULTURE
13
14
Committees
Chair and Secretary
Bonus
Social Responsibility
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(iii)
Page
Answer
Marks
24
25
1005
1005
4
4
26
27
1006
1006
4
4
28
29
1006
1006
4
4
30
31
1006
1007
4
4
32
33
1007
1007
4
4
35
36
1007
1008
4
4
37
38
1008
1008
4
4
39
40
1008
1009
4
4
41
42
1009
1009
4
4
43
44
1009
1010
4
4
Date worked
Assurance
Auditors
Accounting Records
Regulation
DIY Homestore
Best Engineering
Bridgford
Inherent Limitations
BUSINESS FRAUD
29
30
Selection Process
Recruitment Advertising
(iv)
Motivation
Motivation Theories
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Page
Answer
Marks
45
46
1010
1010
4
4
47
48
1010
1011
4
4
49
50
1011
1011
4
4
51
52
1011
1011
4
4
53
54
1012
1012
4
4
55
56
1012
1012
4
4
Test 1
Test 2
Test 3
Test 4
57
62
67
72
1013
1015
1018
1020
50
50
50
50
78
1023
40
Date worked
Approaches to Learning
Training Manager
PERFORMANCE APPRAISAL
43
44
Performance Assessments
Performance and Pay Reviews
PERSONAL EFFECTIVENESS
45
46
Organisation Levels
Structured and Unstructured
Communication Flows
Networks
Corporate Behaviour
Ethical Dilemmas
TESTS
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100
(v)
(vi)
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Charities
Co-operatives
Industrial companies
Non-governmental organisations
Required:
(a)
(b)
Primary
Secondary
Tertiary
For each of the following industries, indicated whether they are (A) primary (B)
secondary or (C) tertiary.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Banking services
Clothes manufacture
Oil extraction
Production of electronics
Tourism
Wheat production
(2 marks)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
(ii)
fixed
intangible
tangible
ownership
partnership
relationship
(1 mark)
(b)
Intangibility
Heterogeneity
Homogeneity
Perishability
Simultaneity
Spontaneity
Tangibility
Required:
Select FOUR of the characteristics from the list above, which distinguish services from
goods.
(2 marks)
(c)
Customer care
Finance
Human resources
Marketing
Production
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Connected stakeholder
External stakeholder
Internal stakeholder
Required:
For each of the following, indicate whether they are internal, connected or external
stakeholders of UFC.
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
(b)
(2 marks)
and should be
Write down A, B, C or D.
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Write down A, B, C or D.
The replica-shirt supplier exerts
(iii)
and should be
Write down A, B, C or D.
(iv)
Write down A, B, C or D.
Note: The total marks will be split equally between each part.
(2 marks)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Internal stakeholder
Connected stakeholder
External stakeholder
Required:
For each of the following, indicate whether they are internal, connected or external
stakeholders of Northern Bottlers.
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
(b)
(2 marks)
Complete the following sentences about Northern Bottlers stakeholders, with reference
to Mendelows grid.
CoolCo exerts
(i)
and should be
Write down A, B, C or D.
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Write down A, B, C or D.
The International Beverages Association exerts
(iii)
and should be
Write down A, B, C or D.
(iv)
Write down A, B, C or D.
Note: The total marks will be split equally between each part.
(2 marks)
(4 marks)
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Ear muffs
Cut-resistant gloves
Goggles
Hard hat
High visibility vest
Safety footwear
Waterproof clothing
Required:
(a)
Select ONE item of personal protective equipment for each of the following jobs:
(i)
(ii)
(iii)
(iv)
(b)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Cost focus
Cost leadership
Differentiation
Differentiation focus
Required:
(a)
Broad
Narrow
Competitive
Scope
Competitive Advantage
Low Cost
Higher Cost
D
(1 mark)
(b)
Porter also described a chain of activities common to all businesses which he divided into:
A
B
Primary activities
Support activities
Required:
Classify the following as either A (Primary activities) or B (Support activities):
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Firm infrastructure
Human resource management
Inbound logistics
Marketing and sales
Operations
Outbound logistics
Procurement
Technological development
(2 marks)
(c)
Select the activities which correctly describe the following depiction of the value chain
i.e. select four activities from (i) to (viii).
Service
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Required:
Select the correct direct effect for each of the following economic processes on the current and
capital accounts; i.e. select A, B or C.
Economic process
(i)
(ii)
(iii)
(iv)
Current account
Capital account
(1 mark)
(1 mark)
(1 mark)
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
The gross domestic product of a country is the total production of goods and services in an
economy over a period of time. The components of GDP are consumption, investment,
government spending and net exports. Any change in GDP is likely to have an impact on
important variables in the economy such as:
A
B
C
D
E
Required:
(b)
(i)
Write down which three of the above variables will FALL if there is a FALL in
gross domestic product by selecting THREE of the letters from (A, B, C, D, E).
(ii)
Write down which of the above variables will not be affected if there is a FALL
in gross domestic product.
(2 marks)
(c)
Identify which of the following events would reduce supply in an economy, by selecting
all that apply.
A
10
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Supply
D1
D0
Quantity
Required:
(a)
Write down which three of the following are possible explanations for the shift in
demand curve from D0 to D1 by selecting THREE of the letters from (A, B, C, D, E, F).
A
B
C
D
E
F
(b)
(ii)
a fall
an increase
price elastic
price inelastic
(1 mark)
The effect of a government subsidy for the production of this good would be to shift the
supply curve to the 3 causing 4 in its price.
(iii)
left
right
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11
a fall
an increase
(1 mark)
(4 marks)
12
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True
False
(i)
A discriminating monopolist can charge different prices in different markets only if the price
elasticity of demand in each market is different
(ii)
Collusion is rare in oligopoly industries because the dominant company has nothing to gain
from co-operating with rivals
(iii)
(iv)
If there are large economies of scale, a monopoly industry may produce more output and
charge lower prices than does a perfectly competitive industry
(v)
Natural monopolies occur when the supply of raw materials is concentrated in one country
(vi)
Oligopolies are most likely to occur where there are significant barriers to entry
(vii)
Price leadership in oligopoly occurs where one firm sets a price for the product and other
firms are not allowed to charge more than this
(viii)
Note: The total marks will be split equally between each part.
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
(4 marks)
13
Required:
(a)
Select FOUR activities from the list above which would be centralised to support the
direct activities.
(2 marks)
(b)
Duplication of effort and expense as sales managers cover wider geographic areas
for their products.
14
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Which TWO of the following are specific features of the existing functional structure?
A
B
C
D
(b)
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15
Power culture
Role culture
Task culture
Person culture
Required:
For each of the following, indicate whether they relate to a power, role, task or person
culture.
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
(b)
(2 marks)
Power distance and uncertainty avoidance are two of the dimensions of national culture
identified by Hofstede. Factors which may contribute to a culture include:
A
B
C
D
E
F
G
H
(i)
Select which TWO of the above would contribute to a high Power Distance
index.
(1 mark)
(ii)
Select which TWO of the above would contribute to low uncertainty avoidance
index.
(1 mark)
(4 marks)
16
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Artefacts
Espoused values
Required:
(a)
(b)
Select which one of the following sentences describes Scheins third level, assumed
values.
A
B
C
D
(c)
(1 mark)
The cultural web comprises seven aspects of culture that can be analysed to identify culture
in an organisation:
A
B
C
D
E
F
G
Control systems
Organisational structures
Paradigm
Power structures
Rituals and routines
Stories and myths
Symbols
Complete the following statements which describe three of these aspects, by selecting
from A, B, C, D, E, F, G.
(i)
(ii)
(iii)
1
2
3
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17
Which type of committee is most appropriate to carry out each of the following
functions?
A
(i)
(ii)
(iii)
(iv)
(b)
The companys cash flow position needs to be scrutinised more closely scrutinised
due to investment in technology and working capital
The companys health and safety guidelines need to be updated to reflect recent
changes in legislation
The takeover of another company, Blue Berries, will be completed next month and
the process of integration is expected to take 18 months
Required:
Identify the activities for which the following committees are most appropriate, by
selecting A, B, C, D or None.
(i)
(ii)
18
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Required:
(a)
(b)
(1 mark)
(1 mark)
and provides
solutions.
(ii)
faster
slower
compromise
optimum
(1 mark)
4 .
(iv)
no one
one
objective
subjective
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
19
Audit Committee
Board of Directors
Chairman of the Board
Chief Executive Officer
Company Secretary
Internal Audit
Non-Executive Directors
Remuneration Committee
Required:
(a)
(b)
(1 mark)
(1 mark)
Which ONE of the following aspects of the companys governance should have
prevented the fraud?
A
B
C
D
E
Appropriate compensation
Independent scrutiny
Oversight of key roles
Separation of the roles of chairman and CEO
Whistle-blowing arrangements
(2 marks)
(4 marks)
20
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
(i)
(ii)
(iii)
(iv)
Required:
(a)
Select the responsibility that is associated with each level of the pyramid.
A
B
C
D
(b)
(1 mark)
(c)
Economical
Ethical
Legal
Philanthropic
Desired
Essential
Required
Wished for
(1 mark)
(ii)
(1 mark)
accountability
liability
profitability
sustainability
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
21
Required:
(a)
(b)
(ii)
illegal.
intentional
unintentional
(iii)
act to
(ii)
maximise
minimise
always
sometimes
not
(2 marks)
(4 marks)
22
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
In which financial statement for a manufacturing company would amounts for the
following be found?
A
B
C
D
(i)
(ii)
(iii)
(iv)
(b)
Required:
Identify the purpose(s) above with the associated report.
(i)
(ii)
(iii)
budgets
cost schedules
variance reports
(2 marks)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
23
(ii)
(iii)
intended users
responsible party
(vi)
confidence
reliability
(v)
a conclusion
an opinion
(iv)
an auditor
a practitioner
results
subject matter
criteria
standards
Note: The total marks will be split equally between each part.
(b)
(3 marks)
Required:
Which TWO of the above services are usually carried out by the external auditor?
Select TWO from (A, B, C, D, E, F, G).
(1 mark)
(4 marks)
24
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Which THREE of the following terms are used to describe the relationships between a
companys directors, shareholders and auditors?
A
B
C
D
E
F
G
Accountability
Agency
Ownership
Reputation
Stewardship
Sustainability
Visibility
(2 marks)
(ii)
an audit committee
management
shareholders
(iv)
financial statements
internal controls
risk of fraud
an audit committee
legislation
shareholders
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
25
Statements of inventory held at the financial year end, if the business deals in goods
Required:
(a)
Select the contents of each of the following records in a typical accounting system, by
selecting A, B, C, D, E or None.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
An asset register
A cash payments book
A cash receipts book
A payables ledger of amounts owed to individual suppliers
A receivables ledger of amounts owed by individual customers
Inventory records
(2 marks)
(b)
ABC is a retailer of accessory equipment for computers. The company buys equipment from
wholesale suppliers on credit terms and sells them from a high street shop.
Required:
Which records meet the requirement to keep proper accounting records? Select all that
apply from the records listed (i)(vi) in (a).
(1 mark)
(c)
DEF provides online marketing solutions including web design and social media services to
corporate clients.
Required:
Which records meet the requirement to keep proper accounting records? Select all that
apply from the records listed (i)(vi) in (a).
(1 mark)
(4 marks)
26
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Required:
(a)
(2 marks)
(b)
(c)
The financial statements of Bzed, a UK company, are prepared under International Financial
Reporting Standards and audited by Cyder & Co.
Required:
Select which one of the following is responsible for preparing financial statements which
show a true and fair view.
A
B
C
D
E
Cyder & Co
Directors of Bzed
Financial Reporting Council
International Accounting Standards Board
Shareholders of Bzed
(1 mark)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
27
Identify which TWO of the following control objectives are relevant to DIY Homestores
sales cycle.
A
B
C
D
E
F
(b)
To ensure that accurate invoices are raised for all goods sold
To ensure that all cash and credit card receipts are recorded completely and accurately
To ensure that every product has a unique bar code
To ensure that goods are only sold to creditworthy customers
To ensure that goods received are not damaged
To ensure that goods sold are completely and accurately recorded
(2 marks)
For each of the following control objectives select which ONE control is most suitable.
(i)
(ii)
To ensure that cash cannot be stolen at a checkout. Select ONE from the
following:
A
Comparing cash in the cash register at the end of each checkout assistants
shift with revenue total for the shift
To ensure that goods cannot be taken from the store without being paid for.
Select ONE from the following:
A
B
C
D
Note: The total marks will be split equally between each part.
(2 marks)
(4 marks)
28
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Identify which TWO of the following control objectives are relevant to Best
Engineerings purchases cycle.
A
B
C
D
E
F
(b)
For each of the following control objectives select which ONE control is most suitable.
(i)
To ensure that suppliers of goods are paid only for goods received. Select ONE
from the following:
A
B
C
D
(ii)
To ensure that goods received are a valid business expense. Select ONE from
the following:
A
B
C
D
Note: The total marks will be split equally between each part.
(2 marks)
(4 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
29
Application control
General control
Required:
(a)
(b)
(ii)
(iii)
Read-only access for sales staff who check whether items are available for sale.
(iv)
Classify each of the controls (i)(iv) according to the alternative categorisation of:
A
B
C
Corrective control
Detective control
Preventive control
(2 marks)
(4 marks)
30
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Complete the following sentences about inherent limitations in an internal control system.
Human 1 in decision-making can be at fault and a breakdown in internal control can
occur because of human 2 .
(i)
(ii)
error
judgement
nature
rights
error
judgement
nature
rights
(iv)
behaviour
collusion
communication
conflict
(b)
override
oversight
skills
supervision
Fewer employees may limit the extent to which segregation of duties is practicable.
Cost of internal control should not exceed the benefits derived
Growth in business activities may render controls ineffective
Management may fail to take appropriate action
Management must judge the nature and extent of the controls it chooses to implement
Oversight by an owner-manager may compensate for limited segregation of duties.
Write down which TWO of the above are specific to smaller entities by selecting TWO
of the letters from (A, B, C, D, E, F).
(2 marks)
(4 marks)
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31
(b)
Deception
Intention
Motivation
Opportunity
(1 mark)
(c)
Identify which, if any, of these actions amount to theft. Select all that apply or state
None.
(1 mark)
(4 marks)
32
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Identify which, if any, of the following money laundering offences have been committed.
A
Failure to verify the identity of all new clients before commencing a business
relationship.
Investing funds when there are reasonable grounds to suspect that they are the
proceeds of criminal activity.
Tipping off.
(2 marks)
(b)
Norman & Co is a small accounting practice which provides audit, tax advisory, insolvency
and related services.
Complete the following statements about anti-money laundering requirements in the
accountancy sector.
Procedures designed to acquire knowledge about the firms clients and prospective clients and
to verify their 1 as well as monitor business relationships and transactions provide 2 .
(i)
(ii)
creditworthiness
identity
risk profile
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
33
(iv)
three year
five years
seven years
one year
three years
five years
(1 mark)
(4 marks)
34
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
1,1
1,9
5,5
9,1
9,9
Required:
(a)
Match each of the following styles of management to the scores on the Managerial Grid,
by selecting A, B, C, D or E.
(i)
(ii)
(iii)
(iv)
(v)
Country Club
Impoverished or Indifferent
Middle-of-the-road
Task
Team
(2 marks)
(b)
Match each of the following descriptions against the styles listed (i) to (v) above by
selecting A, B, C, D or E from the following.
A
B
C
D
E
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35
Consults
Joins
Tells
Sells
Required:
(a)
Identify the management style which is associated with the extremes of the continuum,
by selecting A, B, C or D
(i)
(ii)
boss-centred
subordinate-centred
(1 mark)
(b)
Identify the management style that is appropriate to each of the following situations, by
selecting A, B, C or D.
(i)
A major client has placed an emergency order which has to be completed within 24
hours. Because of the current workload, there is no time to complete the work
within normal working hours. All members of your team will need to work three
hours overtime.
(ii)
(iii)
It is the end of a very successful year and, as is your firms custom, your department
will be celebrating with an end-of-year bash. Your boss has basically left it up to
you to decide what you and your department wish to do, the only constraints being
the budget you are allowed to spend and that he is to be invited.
(4 marks)
36
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Identify which two of the following are stages in the selection process, by selecting TWO
of the letters from (A, B, C D).
A
B
C
D
(b)
(1 mark)
Which ONE of the following is a measure of the efficiency of the recruitment and
selection process?
A
B
C
D
(d)
(1 mark)
Select which TWO of the following should be assessed when choosing a candidate from
applicants for an advertised vacancy.
A
B
C
(c)
Absenteeism
Offer-acceptance rate
Stability index
Staff turnover
(1 mark)
Two well-known systems of identifying the personal characteristics of the ideal candidate are
Rodgers Seven Point Plan and Frasers Five-Fold Grading System.
Which of the following attributes is specific only to Frasers Five-Fold Grading System?
A
B
C
D
Circumstances
Intelligence
Motivation
Physical appearance
(1 mark)
(4 marks)
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37
Classify the following as contents of the Job description (A) and Person specification
(B):
(i)
(ii)
(iii)
(iv)
(b)
Select which ONE of the following is the most suitable source of attracting appropriate
external candidates to this vacancy.
A
B
C
D
E
Company website
Headhunting agency
Notice board in staff canteen
Recruitment fair
Temp agency
(2 marks)
(4 marks)
38
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Select from the list which follows the features that distinguish:
A
B
Diversity
Equal opportunities
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Government initiated
Inclusive
Legally-driven
Opportunity-focused
Proactive
Problem-focused
(2 marks)
(b)
Discrimination in the workplace is regulated in many countries to ensure that people have
equal access to jobs and equal benefits once hired. In the UK, for example, discrimination
against an employee is unfair on arbitrary grounds.
Which TWO of the following situations give rise to unfair discrimination?
A
Company cars and an executive canteen are benefits for directors and managers but
not for other employees.
Mary has been awarded 1,000 for serving with the company for 10 years and
James has been awarded for 2,000 for serving 15 years with the company.
(2 marks)
(4 marks)
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39
Direct discrimination
Harrassment
Indirect discrimination
Victimisation
Required:
(a)
Identify the form of discrimination that is associated with each of the following
situations.
(i)
A job advertisement, for a circus clown, specifies that applicants must be over six
feet tall.
(ii)
An employee who has made a complaint about harrassment is told that he should
not apply for training or promotion.
(iii)
(iv)
(v)
(b)
Equal pay for equal work is the concept that individuals doing the same work should
receive the same remuneration.
Required:
(i)
(ii)
Select which TWO of the following jobs are most likely to have equal value.
A
B
C
D
E
F
G
40
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Identify the concept of role theory which is illustrated by your CEOs reaction:
A
B
C
D
E
F
(b)
Role set
Role definition
Role signs
Role ambiguity
Role incompatibility
Role conflict
(1 mark)
Ambiguity tolerance
Communication channels
Introversion
Leadership
(1 mark)
(c)
(i)
(ii)
(iii)
(iv)
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41
Required:
(a)
Identify the description above with is associated with each of the following team roles as
identified by Belbin, by selecting A, B, C, D or None:
(i)
(ii)
(iii)
(iv)
Chairman coordinator
Implementer
Monitor-evaluator
Plant
(2 marks)
(b)
As well as the strength or contribution they provide, each team role also has an associated
weakness which is allowable in the team because of the strength which goes with it. For
example: Shapers could be aggressive and impatient.
Select which ONE of the following weaknesses is allowable for EACH of the team roles
listed in (i) to (iv) above:
A
B
C
D
E
F
Forgetful
Indecisive
Over delegates
Perfectionist
Slow to relinquish plans
Tactless
(2 marks)
(4 marks)
42
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Required:
(a)
Identify the statements above with each of the following theorists, by selecting A, B, C, D
or None.
A
B
C
D
Herzberg
Maslow
McGregor
Vroom
(2 marks)
(b)
Hygiene
Organisational
Personal
Self-actualisation
Social
(4 marks)
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43
Content theory
Process theory
Required:
(a)
(b)
Herzberg
Maslow
McGregor
Vroom
(1 mark)
Maslow proposed that people have a complex set of needs which may be arranged in order of
priority. This is usually depicted in the form of a pyramid:
(i)
(ii)
(iii)
(iv)
(v)
Required:
Select the need that is associated with each level of the pyramid.
A
B
C
D
E
Esteem
Physiological
Security
Social
Self actualisation
(2 marks)
(c)
Identify the secondary needs in the hierarchy by selecting all that apply.
(1 mark)
(4 marks)
44
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Behaviourist learning
Cognitive learning
Required:
(a)
(b)
You have recently returned from an internal training course on the audit of payables. On your
next assignment your audit senior asks you to carry out the audit of payables.
He briefs you on the approach to use and in carrying out your work you think about what you
are doing with reference to what he told you and your training course. At the end of the job
your work is reviewed by the senior. He discusses with you how you did it, appraises your
strengths and weaknesses and summarises the areas that you need to pay attention to the next
time you audit payables.
Required:
(i)
(ii)
Behaviourist
Coaching
Developmental
Experiential
(1 mark)
Kant
Honey and Mumford
Kolb
Mayo
(1 mark)
(4 marks)
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45
Co-ordinating
Developing
Researching
Required:
(a)
(b)
(ii)
Job rotation
Secondment
Shadowing
(2 marks)
(4 marks)
46
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360-degree appraisal
Assessment centre
Bottom-up appraisal
Self-appraisal
Sideways appraisal
Top-down appraisal
Required:
(a)
Identify which form of assessment would be most appropriate in each of the following
situations, by selecting from A, B, C, D, E and F.
(i)
(ii)
(iii)
(b)
State which form(s) of assessment may involve appraisal by external customers. (1 mark)
(c)
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47
Which TWO of the following are disadvantages to the employee if performance reviews
are scrapped as suggested by the financial director?
A
B
C
D
(b)
48
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(b)
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49
Required:
(a)
Identify the description above which is associated with each of the following views, by
selecting A, B or C.
(i)
(ii)
(iii)
(b)
Evolutionary
Happy family
Radical perspective
(1 mark)
Required:
Which TWO of the above are positive effects? Select TWO from (A, B, C, D, E, F).
(2 marks)
(c)
You are the Human Resources Manager of an industrial organisation and are currently dealing
with a machine operator, Ferdinand, who has persistently refused to keep the walkways
around his machine free from machine waste and oil. His supervisor has reminded him,
repeatedly, that observing health and safety requirements is a term of his employment.
However, Ferdinand considers this clearing up to be a job for the cleaners at the end of each
day.
Required:
What should be your next step in handling this conflict?
A
B
C
D
50
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(i)
(ii)
(iii)
Required:
For each level of Anthonys hierarchy:
(a)
(b)
(1 mark)
(c)
Operational
Strategic
Tactical
Semi-structured
Structured
Unstructured
(1 mark)
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51
Structured
Semi-structured
Unstructured
Required:
(a)
(b)
(c)
52
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Downwards
Upwards
Lateral
Required:
(a)
Identify the description of direction with each of the following information flows, by
selecting A, B or C.
(i)
(ii)
(iii)
(iv)
Conflict resolution
Instructions to perform a task
Performance appraisal of sub-ordinates
Technical feedback
(2 marks)
(b)
Formal letter
Formal meeting
Informal letter
Informal meeting
Newsletter
Telephone call
For each communication below, which of these methods is most appropriate in the first
instance?
(i)
(ii)
(iii)
(iv)
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53
Chain
Circle
Wheel
All channel
Required:
(a)
Select the pattern which is associated with each of the following interactions.
(i)
(ii)
(iii)
(iv)
(b)
Least centralised
Most centralised
Prone to loss of control and coordination
Prone to message distortion
(2 marks)
(4 marks)
54
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Accountability
Empowerment
Honesty
Openness
Respect
Trust
Required:
(a)
(b)
Corporate codes of ethics are published by organisations in order to communicate their values
and beliefs to stakeholders. The two main types of code are stakeholder-based and issuesbased.
Required:
Select FOUR areas of content for an issues-based code of ethics from the following.
A
B
C
D
E
F
G
H
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55
Ethical dilemmas often arise as a result of conflict between four sets of values:
A
B
C
D
Corporate values
Personal values
Professional values
Societal values
Required:
Select the correct value which appropriately fills each gap.
(i) are represented by the law, (ii) are held by the organisation which employs the
individual, (iii) are held by the individual and (iv) are those held by the organisation of
which the individual is a member.
(1 mark)
(b)
You are employed by an accountancy firm, Moggij & Co. Your manager has given you
written permission to keep books and prepare accounts in a private capacity in your own spare
time. The following situations might then arise:
A
B
C
D
E
Select THREE situations from the above list which would give rise to a conflict of
interest.
(2 marks)
(c)
Angies husband, Pete, is an audit manager in KAT, a firm of chartered certified accountants.
Angie has just been offered a job with an excellent remuneration package as an HR manager
in Albatross. Albatross is one of KATs audit clients and Pete is involved in the audit.
Required:
Select the most appropriate course of action from the following.
A
Angie should accept the job offer because KAT will have safeguards to manage any
ethical threat arising
Angie should decline the job offer to avoid any possible conflict of interest that
might arise
Pete should resign from KAT before Angie can take up the position
(1 mark)
(4 marks)
56
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1.2
(2 marks)
Rodan is the international production director for ASD Co. His team consists of over 100
male and female managers spread throughout the organisation. The average age of his
managers is 40, but ranges from 25 through to 60 years. Because of the demands of various
customers, the nature of the work of each manager is never the same.
Which one of the following is likely to be the least important influence on the span of
control of Rodan over his managers?
A
B
C
D
1.3
(2 marks)
Which one of the following statements is closest to the beliefs of the classical school of
management?
A
B
C
D
1.5
(2 marks)
Which one of the following states the four cultural types identified by Handy?
A
B
C
D
1.4
Location of personnel
Type of personnel
Age of personnel
Nature of the work
(2 marks)
Which of the following includes the roles Belbin suggested a group needs in order to be
effective?
A
B
C
D
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(2 marks)
57
Petr is a highly motivated individual, perfectly able to determine his own short-term and longterm life goals and the means of achieving those goals. His friends are often amazed as to
how he is able to start, sustain and direct his behaviour to achieving each goal, especially as
he often accepts challenges they would not consider as achievable.
Which theory best describes Petrs approach to being motivated?
A
B
C
D
1.7
1.9
Right to: seek compensation; take action to rectify, block, erase or destroy personal
data; prevent processing for direct marketing; prevent decisions against an
individual by purely automated means
Right to: obtain access to data held overseas; take action to destroy personal data;
prevent processing for direct marketing; inspect data in situ in the their home country
Right to: seek compensation; travel abroad to inspect personal data; inspect personal
data in situ in their home country; take action to destroy personal data
Right to: destroy hardware holding personal data; inspect personal data where it is
held in their home country; seek compensation; prevent processing for direct
marketing
(2 marks)
Which of the following are the three primary objectives of wealth maximisation?
Profitability, management performance and responsibility
Survival, maintaining growth/development and profitability
Market share, financial resources and physical resources
Worker performance, innovation and accountability
(2 marks)
Porters five forces collectively determine, for a single company, which one of the
following?
A
B
C
D
58
Which of the following includes four examples of the seven rights of individuals
regarding information that is stored about them?
A
B
C
D
1.10
(2 marks)
In relation to error and fraud prevention, what objective should external auditors have
in designing and implementing their audit procedures?
A
B
C
D
1.8
(2 marks)
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1.12
(2 marks)
Which of the following best describes the role of a standing committee within an
organisation?
A
B
C
D
1.13
Conflict
External
Internal
Connected
1.14
(2 marks)
Which of the following would cause an auditor to modify (qualify) their opinion on a set
of financial statements?
A
B
C
D
1.15
Meta-ethics
Relativism
Instrumentalist
Deontological
Sole traders
Partnerships
Limited liability companies
Limited liability partnerships
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(2 marks)
59
The books and records of a company contain many forms of documentation, including:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
1.18
(2 marks)
To carry out the directions of management, safeguard the assets and ensure the
financial statements are correctly audited
To ensure business processes are efficient and effective, to prevent errors and
fraud and safeguard the assets of the entity
To prevent fraud and error, ensure the effective and efficient use of resources and
ensure management information is valid.
(2 marks)
1.19
(2 marks)
Unemployment may arise due to a permanent reduction in demand for the products supplied
by a single industry or group of industries with traditionally large workforces.
Which of the following describes this type of unemployment?
A
B
C
D
1.20
(2 marks)
60
Frictional
Structural
Cyclical
Seasonal
The shareholders
The audit committee
The risk committee
The board of directors
(2 marks)
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1.22
Internal advertising
Advertsing within a local newspaper
Advertsing on the metro
Use of a financial recruitment consultant
(2 marks)
Which of the following states the elements of Kolbs experiential learning cycle in the
correct order?
A
B
C
D
1.24
(2 marks)
Which would be the most suitable method of advertising for a chief finance director?
A
B
C
D
1.23
(2 marks)
1.25
Tim is in charge of setting up a new international project. His team will consist of 30
analysts, designers, programmers and testers, all of whom are based in different locations. To
be able to effectively manage the complexity of the project, Tim needs to hold regular
eMeetings through web-based software with all of his team at the same time.
Which form of communication network should be used by Tim?
A
B
C
D
Chain
Y
Wheel
All-channel
(2 marks)
(50 marks)
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61
2.2
2.3
2.6
(2 marks)
(2 marks)
In which one of the following Mendelow stakeholder categories could individuals join
forces to form a stronger grouping and become lobbyists or pressure groups, thus
moving into a different stakeholder category?
A
B
C
D
2.5
2.4
(2 marks)
Adairs leadership model focuses on what leaders do and not what they are
The Ashridge leadership model proposes a democratic approach to leadership
A
B
C
D
(2 marks)
Jon is a design engineer for an international car manufacturer. His primary computer-aided
system enables him to design the interior of the driver and passenger cabin of a car, including
the seats. His system is linked via an extranet to the design templates of external component
suppliers, as well as to other members of his design team who also work on the same design.
In which of the following IS categories would Jons system be classified?
A
B
C
D
62
(2 marks)
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A good ________ requires a full and complete understanding of the formal committee
procedures and how and when to apply them.
Which one of the following best completes the sentence above?
A
B
C
D
2.8
CEO
Director
Chair
Committee secretary
(2 marks)
2.9
(2 marks)
A national supermarket chain operates a club card scheme where the holder of the card is
rewarded with points based on how much they spend and what they buy on each visit to one
of the chains stores. The cumulative data collected on all of the supermarkets customers is
made available to government statisticians which is aggregated with similar data collected
from other sources.
Which form of economics does the above illustrate?
A
B
C
D
2.10
Microeconomics
Business economics
Macroeconomics
Nano economics
(2 marks)
i, ii and iii
ii, iii and v
ii, iv and v
i, iv and vi
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(2 marks)
63
Northland, Southland, Eastland and Westland are four countries of Asia. The following
economic statistics have been produced for the year 2012.
Country
Northland
Change in GDP (%)
-0.30
Balance of payments
current account ($m)
+5550.83
Change in consumer prices (%)
+27.50
Change in working population
employed (%)
-4.76
Southland
+2.51
Eastland
-0.55
Westland
+2.12
-350.47
+15.37
-150.90
+2.25
+220.39
+2.15
+3.78
+1.76
-8.76
2.14
Retained earnings
Investment bond loan capital
Share issue
Venture capital
(2 marks)
To ensure that all financial statements issued by listed companies show a true and
fair view
Which of the following controls is most likely to prevent the despatch of goods that have
not been ordered?
A
B
C
D
64
(2 marks)
Which one of the following sources of finance would be available to a governmental local
authority (city hall)?
A
B
C
D
2.13
Northland
Southland
Eastland
Westland
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
In marketing, the 4Ps relate to the marketing mix for products, with the 7Ps relating to the
marketing mix for service providers.
What are the additional Ps that relate to the marketing mix for service providers?
A
B
C
D
2.16
(2 marks)
2.17
An international quality car manufacturer that prides itself on innovative design offers each of
its customers the opportunity for a custom fit car seat (referred to by the company as a glove
seat) which they believe makes them stand out from the crowd. This entails the customer
visiting a show room and sitting in a design module of their cars interior. Sensors measure
the drivers body and best driving position. The same process can be applied for up to three
other drivers (e.g. wife, husband, children, dog). When delivered, the cars seat fits like a
glove and can be re-engineered at any time to take into account changes in the drivers body.
By entering a PIN, the car seat will automatically adjust to fit the posture of the new driver.
What form of technological competitive strategic advantage is the car manufacturer
aiming to achieve?
A
B
C
D
2.18
(2 marks)
The stages of preparing a personal development plan are contained in which one of the
following?
A
B
C
D
2.19
Cost leadership
Innovation
Growth
Differentiation
(2 marks)
In the context of internal control, which of the following best describes the control
environment?
A
B
C
D
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65
The controls operated within computer based systems are classified into a number of different
categories.
In which category would passwords be classified?
A
B
C
D
2.21
Processing controls
Physical controls
System development controls
Output controls
(2 marks)
An advertisement reads Attractive, young, natural blonde persons required for the role of
administrative assistants.
Which set of discrimination laws are being broken?
A
B
C
D
2.22
A large order is sent to a credit customer who does not then pay
Sales made after the year end are recorded as pre-year end sales
Customer orders are diverted to a separate company set up by a director
Receipts from credit customers are misappropriated and subsequently concealed by
furture receipts
(2 marks)
Which one of the following training methods would be the most appropriate for a
student accountant to develop the knowledge, skills and attitude to become an auditor?
A
B
C
D
2.24
(2 marks)
Which one of the following best describes the teeming and lading fraud?
A
B
C
D
2.23
Mentoring
External courses
On-the-job training
Self-study
(2 marks)
Fred is a sober, prudent individual who is able to make impartial judgements on the work of
others through dissecting and spotting flaws within their ideas. However, he lacks inspiration
and finds it difficult to motivate his fellow workers.
Which of Belbins team roles best describes Fred?
A
B
C
D
2.25
Plant
Implementer
Monitor-evaluator
Chairman co-ordinator
(2 marks)
Which one of the following appraisal methods would be most suitable for appraising a
student accountant against specific job and personal criteria as part of an audit team?
A
B
C
D
Peer ranking
Management by objectives
Rating scales
Open assessment
(2 marks)
(50 marks)
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3.2
(2 marks)
BCD Co is a large trading company. Steve, the administration manager, is responsible for
legal and compliance functions. Sheila, the after sales service manager, is responsible for
ensuring that customers who have purchased goods from BCD Co are fully satisfied. Sunny
deals with suppliers and negotiates on the price and quality of inventory. Sunny is also
responsible for identifying the most appropriate suppliers of plant and equipment for the
factory. Sam, the information technology manager, is responsible for all information systems
within the company.
According to Porters value chain, which of the managers is involved in a primary
activity as opposed to a support activity?
A
B
C
D
3.3
Steve
Sheila
Sunny
Sam
(2 marks)
Yana will shortly be graduating from university and is researching for her first job. In tests
conducted by the universitys careers advisor, she scored highly in wanting a job that had the
attributes of predictability, standardisation and consistency.
What organisational culture would be most suited to Yana?
A
B
C
D
3.4
(2 marks)
Which of the following can be used to explain how shareholders, directors and external
auditors interact and how their objectives may conflict with one another?
A
B
C
D
3.5
Task culture
Power culture
Person culture
Role culture
(2 marks)
Following an incident with one of its aircraft, the manufacturer has decided to redesign the
systems that present flight information to the pilots. The incident involved a fault in one of
the planes engines, but because of the volume of information presented, the pilots shut down
the wrong engine.
Which one of the following combinations of the qualities of information should be the
critical driver for the systems redesign?
A
B
C
D
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(2 marks)
67
3.7
(2 marks)
Which one of the following ethical fundamental principles is most closely related to the
need for the professional accountant to be independent of their clients?
A
B
C
D
3.8
Integrity
Professional behaviour
Objectivity
Confidentiality
(2 marks)
One of the key performance indicators (KPIs) of a company is determined by the amount of
depletable raw materials and non-renewable resources it consumes to make its products and
the quantity of wastes and emissions generated in the process.
What is the term used to describe this KPI?
A
B
C
D
3.9
(2 marks)
The European Union, the World Trade Organisation and the International Court of
Justice are all examples of what type of organisation?
A
B
C
D
3.10
Carbon footprint
Social foorprint
Environmental footprint
Recycling footprint
Supra-national bodies
Cross-border international bodies
International law and regulation enforcement bodies
Delegated legislative bodies
(2 marks)
Research has indicated that workers in country A display characteristics such as toughness
and the desire for material wealth and possessions, while workers in country B value personal
relationships, belonging and the quality of life.
According to Hofstedes theory, these distinctions relate to which of the following
cultural dimensions?
A
B
C
D
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Masculinity-femininity
Power-distance
Individualism-collectivism
Uncertainty avoidance
(2 marks)
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A country is currently experiencing low birth rates and low death rates, the consequence of
which is that as the number of older, retired people grow the government is facing significant
pension fund and health cost increases, but with a shrinking workforce to fund the increased
costs.
At what stage in Notesteins Demographic Transition Theory is the country?
A
B
C
D
3.12
(2 marks)
In many organisations, power and politics may play a central role when considering the
conflicts that arise over allocation of scarce resources, the status of individual employees or
the rewards given to employees.
Which view on conflict best describes this situation?
A
B
C
D
3.13
(2 marks)
(2 marks)
3.15
consumption value
market value
factory gate cost
production input cost
Management accounting
Financial accounting
Treasury accounting
Cost accounting
(2 marks)
Who, within an organisation, is usually responsible for ensuring full compliance with all
statutory, regulatory and governance reporting, accounting and audit requirements?
A
B
C
D
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(2 marks)
69
3.17
(2 marks)
A fraud was recently discovered where the monthly salary of an employee who had left many
months earlier continued to be paid after he had left. A wages administrator responsible for
updating the payroll database was his girlfriend.
Which of the following controls, if operated, would have been most likely to have
prevented the fraud?
A
Independent review and approval of all changes made to the database, comparing
to original input documentation
Banning all personal relationships between payroll staff and other employees
(2 marks)
3.18
We need to ensure that, at the end of the day, our new computer is put in front of everyone,
no matter who they are, what they do or where they go, they need to know about it so they can
buy it.
Which of the marketing 4Ps is relevant to this situation?
A
B
C
D
3.19
Place
Promotion
Price
Product
(2 marks)
A team has been successfully operating for some time, when two of its members are promoted
to be the manager of their own teams. They are replaced by two new employees recruited
externally specifically to join the team.
At what stage within Tuckers team development would the team most likely find itself?
A
B
C
D
3.20
(2 marks)
Under which internal control component should the management weakness letter
received from the external auditors be classified?
A
B
C
D
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Forming
Storming
Norming
Performing
Control activity
Control environment
Monitoring controls
Risk assessment
(2 marks)
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
A fraud recently discovered by a companys auditors involved the theft of receipts from credit
customers which were covered up by subsequent receipts from other customers or writing off
the debt as bad.
What is the name most commonly given to this type of fraud?
A
B
C
D
3.22
Window dressing
Teeming and lading
Cash siphoning
Ponzi
(2 marks)
3.23
In an audit team, the phrase in-charge account is used to describe the individual who runs
the audit on a day-to-day basis at the clients premises and who also performs part of the audit
procedures at the client. A foreman or forewoman would be the industrial equivalent through
their managing a work group as well as being involved in the work itself.
Which of the following terms best describes the role of the in-charge accountant or
forewoman/man?
A
B
C
D
3.24
Workman
Manager
Facilitator
Supervisor
(2 marks)
A manager (who is smoker) has been informed by her boss that a no smoking policy is to be
introduced and there will be no exceptions. Her boss fully explains the reasons for this. The
manager has to inform her subordinates (many of whom are also smokers) of this new policy.
Which of the styles of management identified by Ashridge Management College would
be appropriate for the manager to use?
A
B
C
D
3.25
Consult
Tell
Join
Sell
(2 marks)
Dima is an individual who rises to the challenge. He is not an originator of ideas, but
always seems to know somebody who knows the answer or can help solve a problem. The
rest of his team refer to him as Radar because of his ability to find solutions to problems.
Which of Belbins team roles best describes Dima?
A
B
C
D
Plant
Implementer
Resource investigator
Chairman co-ordinator
(2 marks)
(50 marks)
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4.2
(2 marks)
4.3
Anthony
Maslow
Carol
Woodcock
Supervision
Working conditions
Job security
Pay
(2 marks)
A firm wishes to obtain a competitive advantage over its rivals through the use of information
systems and technology. The CEO understands he can achieve a competitive advantage
through differentiation or cost leadership.
Which of the following is a technique of differentiation through the use of information
systems?
A
B
C
D
4.4
(2 marks)
4.5
Improving efficiency
Improving customer service
Economy in purchasing
Removing product features
Economies of scale
Enhanced career opportunities
Enables growth
Goal congruence
(2 marks)
The government of an emerging nation prides itself on developing a national culture where
there is a strong emphasis on initiative and achievement, and people are expected to be selfsufficient.
Which one of the following best describes the culture of the nation?
A
B
C
D
72
Masculine
Individualistic
High uncertainty avoidance
Low power distance
(2 marks)
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4.7
Which of the following are the likely consequences of a fall in interest rates?
(i)
(ii)
(iii)
(iv)
A
B
C
D
(2 marks)
Sir John DeVere is a highly successful barrister operating from chambers (offices) located in
London, New York and Singapore. He has a reputation second to none for winning high
profile cases involving complex cross boarder issues. Each office is run by a legal manager
heading a team of lawyers, legal assistants and researchers. The sole aim of each office is to
present Sir John with full details of each potential case. Sir John then consults with the office
manager before deciding which clients to accept. Once a client has been accepted, the office
manager ensures that Sir John has a complete and solid brief on which to base his case in
court.
Which of Handys cultural types best describes Sir Johns chambers?
A
B
C
D
4.8
4.9
Role
Power
Person
Task
(2 marks)
Which one of the following relates directly to the work of Douglas McGregor?
A
Employees who dislike work, need direction and avoid responsibility are Theory
X people.
Employees who like work, need direction or take responsibility are concerned with
Hygiene factors.
Employees who dislike work, need direction and avoid responsibility are Theory
Y people.
(2 marks)
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(2 marks)
73
A systems analyst has been instructed by the key user of a new system to ensure that the
system will always deliver good quality information.
Which one of the following is a key attribute of good quality information?
A
B
C
D
4.11
Guaranteed
Produced quickly
Relevant
Cheap and cheerful
(2 marks)
A stakeholder is defined as any group or individual who can affect or be affected by the
achievement of an organisations objectives. Stakeholders are often classified as being
internal, connected or external.
Which of the following groupings of stakeholders contains an example of each
classification?
A
B
C
D
4.12
(2 marks)
Employees have a duty to take reasonable care of themselves and others, avoid creating
hazards, draw to managements attention potential problems and to co-operate with their
employer so far as is necessary to ensure that the employer can perform their legal duties.
To which general category of legislation do these duties belong?
A
B
C
D
4.13
(2 marks)
Many large cities have, or are introducing, a congestion charge on the use of cars in city
centres (e.g. the City of London). Experience has shown that in some cities the charge does
not significantly reduce the use of cars for travelling to and from work (commuting).
In economic terms, what is the implication where the charge does not significantly
reduce the use of cars?
A
B
C
D
4.14
(2 marks)
74
(2 marks)
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4.16
(2 marks)
4.17
Production
Purchasing
Marketing
Procurement
(2 marks)
4.18
Auditors
Tax authorities
Company secretary
Directors
(2 marks)
4.20
(2 marks)
4.19
IT/IS audit
Value for money
Operational
Risk management
Sales
Payroll
Inventory
Purchases
(2 marks)
A listed company fully complies with the requirements of the stock exchange and the
corporate governance code of its jurisdiction.
What component of internal control does the companys actions best represent?
A
B
C
D
Risk assessment
Control monitoring
Control activities
Control environment
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(2 marks)
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4.22
Objectivity
Integrity
Professional behaviour
Professional competence
(2 marks)
Rozprakitka is a company that sells electronic goods through its website. As with similar
companies, customers can search the website to find the item they are looking for. Each
product is fully described and links are embedded within the product page to the
manufacturers website as well as to customer and independent reviews. If the customer
wishes to purchase the item they may add it to their shopping trolley and pay for what they
have purchased on checkout. The goods are then delivered to them by courier.
What elements of the marketing mix are demonstrated by the website?
A
B
C
D
4.23
(2 marks)
(i)
A sound internal of control system is the first line of defence in the prevention and
detection of fraud. It is the duty of the board of directors to maintain a sound system of
internal control.
(ii)
As part of a sound system of internal control, internal auditors are responsible for the
prevention of fraud.
(iii)
(2 marks)
You have told me that your father influenced your choice of career. Exactly how did he do
that?
What form of question is being asked?
A
B
C
D
76
Open question
Probing question
Reflective question
Closed question
(2 marks)
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Which of the following is the correct sequence of Kolbs experiential learning cycle?
A
B
C
D
(2 marks)
(50 marks)
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Janet is a member of a project group. She is highly knowledgeable and considered by her
colleagues to be rather intellectual and strategic in her approach. Janet demonstrates great
intuition when dealing with problems, sometimes adopting unorthodox but effective methods.
However, some of the team regards her as detached and uncommunicative, and she can
sometimes disregard practical details without explanation.
According to Belbins team roles theory, Janet is an example of which of the following?
A
B
C
D
(2 marks)
In order to promote proper and complete dialogue between the company registration
body and a company, and to ensure that essential administrative requirements laid
down by the company registration body come to the attention of the board, which of the
following positions should be segregated?
A
B
C
D
Monitor-evaluator
Plant
Shaper
Resource investigator
(2 marks)
Checking that the technical quality of inventory is consistent with the order
specification
Confirming that an order for goods placed by the production manager is consistent
with the managers authorisation limit
(2 marks)
78
Pragmatist
Activist
Reflector
Theorist
(2 marks)
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As a longstanding customer, Walter has been highly critical of Fly Co, an airline which he
claims has provided him with bad service and poor value for money for many years. He has
written many letters and has made numerous telephone calls, all expressing his concerns.
Having now inherited a large block of voting shares in Fly Co, Walter can now voice his
complaints at the annual shareholders meeting for the first time.
With reference to Mendelows theory, what is the implication of this development?
Fly Co could previously have expended minimal effort on Walters concerns, but it
must now keep him informed
Fly Co should previously have kept Walter informed, but it must now treat him as a
key player
Fly Co should previously have kept Walter satisfied, but it must now regard him as a
key player
(1 mark)
HIJ Co is a large company whose shares are listed on the national stock exchange. The
company is compliant with generally accepted standards of corporate governance. The
finance department of HIJ Co has completed the preparation of the draft financial statements.
To which of the following will these statements be submitted initially for scrutiny?
A
B
C
D
(2 marks)
Analysis of costs and revenues of different products would assist the marketing
department in respect of which activity?
A
B
C
D
The data user should provide the data subject with regular and detailed information
on the data held
All personal data held by data users should be updated by checking this data with
the subject at regular intervals
All personal data held by data users should be adequate for the purposes of the data
user but not excessive
All personal data held by data users should be reviewed regularly and automatically
deleted after a specified period of time
(2 marks)
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79
DEF Co has decided to include in each customers account number a check digit which will
have an arithmetical relationship to other digits in the account number.
This is an example of which of the following types of control?
A
B
C
D
10
(2 marks)
12
(2 marks)
11
Input control
Back-up control
Output control
Contingency control
Assimilation
Application
Abstract conceptualisation
Positive reinforcement
(2 marks)
Eatkleen is a pressure group that seeks to encourage food producers to eliminate harmful
preservatives from food and make the public aware of the potential dangers of these additives.
Frustrated with the governments explicit policy not to act on this in the near future, Eatkleen
is campaigning for consumers to boycott certain products.
What combination of environmental factors is Eatkleen bringing to bear on food
producers?
A
B
C
D
13
(2 marks)
The preparation and filing of accounts by limited companies each year is required by
which of the following?
A
B
C
80
(1 mark)
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Grant is a member of a project team. His colleagues in the team rely on him to read and check
complex project documentation. Grant has a keen eye for detail and often identifies minor
details in documents that others miss but may be of significance. Despite this diligent
approach, Grant always meets his deadlines. However, Some of Grants colleagues feel
frustrated when he refuses to involve others. He can hold up progress as he will not agree to
the team signing off project documents until all of his concerns are fully discussed.
According to Belbins team roles theory, Grant is an example of which of the following?
A
B
C
D
15
Implementer
Completer-finisher
Monitor-evaluator
Shaper
(2 marks)
What is the latest stage at which a new recruit to a company should first be issued with a
copy of the companys health and safety policy statement?
A
B
C
D
(2 marks)
16
VTP Co has introduced a new budgetary control system. Managers have been asked to
prepare budgets for their areas of responsibility and have agreed these formally with senior
executives.
What is the next stage of the process?
A
B
C
D
17
(2 marks)
A recent report commissioned by the government of Arkana has concluded that the national
birth rate has fallen from an average of 21 children per household to 17 children per
household. This decline is expected to continue, as families face a period of prolonged
financial pressure. The report also found that the life expectancy of the citizens of Arkana has
increased from an average of 74 years to 79 years. Again, this trend is expected to continue as
citizens choose healthier lifestyles. Numerous policy measures have been proposed by
ministers to reduce the long-term pressure on national finances.
Which of the following measures is most appropriate in order to achieve this objective?
A
B
C
D
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81
The remuneration committee of RDC Co has prepared a report to the board proposing major
changes to the structure of executive remuneration packages. The recommendations include
the following:
(1)
(2)
(3)
(4)
Acknowledging the contribution of all board members, share options will be made
available to all executive and non-executive directors.
(5)
As the company pays its executives less than its main competitors, basic pay and
fringe benefits will be increased with immediate effect, which means that the
average directors remuneration will be made up of approximately 50% on target
earnings.
Which of the above recommendations are consistent with best practices in corporate
governance in respect of remuneration of directors?
A
B
C
D
19
1 and 4
2 and 3
3 and 4
3 and 5
(2 marks)
The board of directors of TBF Co has decided to establish an audit committee for the first
time. The committee will be made up of three independent non-executive directors. As the
company has six non-executive directors, three will serve on the committee in the first year
and the other three will then serve for the next year. Of the six non-executive directors, only
one has a comprehensive knowledge of financial operations.
The committee will meet every two months. One of the non-executive directors will also
serve as the chairman of the company for the next year and it has been decided that he will
also be the chairman of the audit committee for this period.
According to best practice in corporate governance, which of the following statements is
correct in relation to the above arrangements?
82
The audit committee will not have the necessary competences to discharge its
responsibilities over the full two year period
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21
Which of the following reports prepared by the finance department would enable the
organisation to assess the effectiveness of an increase in expenditure on after sales
service?
A
(2 marks)
Jens has prepared a report detailing the sales, revenues and costs attributable to his companys
products, broken down by cities, towns and regions, for the last 12 quarters. He already has
figures for the estimated total market size for the same period. The company sells fast
moving consumer goods and adopts an undifferentiated marketing strategy.
Jens report will enable the marketing department to complete which of the following?
A
B
C
D
(2 marks)
(40 marks)
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84
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Justification
C
A and D
B
B and D
(b) (i)
(ii)
(iii)
(iv)
(v)
(vi)
C
B
A
B
C
A
B
A
(b)
A, B, D, E
(c)
C
B
A
B
(b) (i)
(ii)
(iii)
D
C
C
(iv)
The replica-shirt supplier can easily be replaced by the club when the contract has
been fulfilled. Alternatively, the supplier can decline any new contract offered.
B
A
C
C
(b) (i)
(ii)
(iii)
B
A
B
(iv)
The International Beverages Association clearly has high interest and in order to
protect the interest of the non-alcoholic beverage industry would expect
appropriate standards to be met and apply sanctions if standards were not met.
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1001
Justification
G
C
B
E
(b)
A, C, D, E
Answer 6 PORTER
(a) (i)
(ii)
(iii)
(iv)
C
A
B
D
(b) (i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
B
B
A
A
A
A
B
B
(c) A
B
C
D
(iii)
(v)
(vi)
(iv)
Answer 7 ELAND
(i)
(ii)
(iii)
(iv)
A, C
A, A
C, A
B, C
A, D. E
C
(b)
A, B, D
(c)
A, B
C, D, F
(b) (i)
(ii)
(iii)
(iv)
A
B
B
A
1002
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Justification
Answer 10 MARKETS
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
A
B
A
A
B
A
B
B
B, D, E, F
(b)
A, D
A, D
The functional structure hinders the development of general managers and is not
suited to rapidly-expanding organisations
(b)
A, B
Role ambiguity is a disadvantage. The matrix structure is suitable where there are
few major customers in a highly-skilled industry with mature and professional
employees.
B
C
D
A
(b) (i)
(ii)
C, H
E, F
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Justification
Answer 14 SCHEIN
(a) (i)
(ii)
(iii)
(iv)
(v)
(vi)
A
B
A
A
B
B
(b)
(c) (i)
(ii)
(iii)
C
E
B
Conscious values (A) are espoused values which might differ from actual behaviour
(D). The social environment is a visible artefact.
Answer 15 COMMITTEES
(a) (i)
(ii)
(iii)
(iv)
C
B
D
A
(b) (i)
(ii)
C and D
None
B, D, F, G
A, C, E, H
(b) (i)
(ii)
(iii)
(iv)
B
A
A
A
Answer 17 BONUS
(a) (i)
(ii)
H
B
(b)
1004
Independent scrutiny (e.g. by the external audit) does not prevent (and may not
detect) management fraud. As Roger is a sales director the weaknesses that allowed
the fraud are unrelated to the key roles of chairman and CEO.
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Justification
D
B
C
A
(b) (i)
(ii)
(iii)
(iv)
B
C
A
D
(c) (i)
(ii)
B
D
A and E
C and D
(b) (i)
(ii)
(iii)
A
B
A
C
A
D
B
(b) (i)
(ii)
(iii)
C and E
B
A, D and F
Answer 21 ASSURANCE
(a) (i)
(ii)
(iii)
(iv)
(v)
(vi)
B
A
A
A
B
A
(b)
A and F
Answer 22 AUDITORS
(a)
A, B, E
(b) (i)
(ii)
(iii)
(iv)
C
A
A
B
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1005
Justification
C
B
A
D
C
E
(b)
(c)
Answer 24 REGULATION
(a)
D, F, G
(b)
(c)
B and F
(b) (i)
(ii)
C
D
B and F
(b) (i)
(ii)
B
A
Answer 27 BRIDGFORD
(a) (i)
(ii)
(iii)
(iv)
B
A
A
B
(b) (i)
(ii)
(iii)
(iv)
B
A
C
C
1006
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Justification
B
A
B
A
(b)
A and F
(b) (i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
B
B
B
B
A
A
B
B
(c)
C and D
(b) (i)
(ii)
(iii)
(iv)
B
A
B
C
Tutorial note: Mightys refusal to deal with Bron did not Do or disclose anything
which might prejudice an investigation into money-laundering activities and did
not therefore commit a tipping off offence.
B
A
C
D
E
(b) (i)
(ii)
(iii)
(iv)
(v)
E
D
A
C
B
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1007
Justification
C
B
(b) (i)
(ii)
(iii)
C
A
B
C, D
(b)
A, B
Especially for junior positions, many applicants may have little, if any, relevant
experience. (Even if experienced, comparing experiences is likely to be too
subjective.) Formal qualifications (e.g. university degree) and development
potential (e.g. to pass ACCA exams) provide more objective criteria.
(c)
(d)
B
B
A
A
(b)
1008
B
A
B
A
A
B
A and B
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Justification
C
D
C
A
B
(b) (i)
(ii)
If there are important practical differences it cannot be like work. Work that is
different can be benchmarked as equal.
B and D
(b)
B and D Individuals and groups may display high (or low) ambiguity tolerance. Introverted
individuals are detached, solitary and private. Communication channels and
leadership will be exhibited only in groups.
(c) (i)
(ii)
(iii)
(iv)
B
C
A
D
C
D
F
E
Tutorial note: A is resource investigator and B is finisher-completer.
(b) (i)
(ii)
(iii)
(iv)
C
E
F
A
Tutorial note: Perfectionism and indecision are weaknesses in the
completer-finisher and team worker roles, respectively.
Answer 39 MOTIVATION
(a) (i)
(ii)
(iii)
(iv)
C
A
B
D
(b)
Specific hygiene factors referred to are salary, working conditions and security.
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1009
Justification
A
A
B
B
(b) (i)
(ii)
(iii)
(iv)
(v)
E
A
D
C
B
(c)
A, D, E Secondary needs are the psychological and social needs; the primary needs are
physiological.
B
A
A
A
B
Tutorial note: Behaviourist concerns stimulus response; cognitive
concerns information processing.
(b) (i)
(ii)
D
C
Tutorial note: Kolbs experiential learning cycle is typically expressed
by four (or five) stages (concrete experiences, reflective observation,
abstract conceptualisation and active testing).
B
A
C
C
A
B
(b) (i)
(ii)
C
B
B
F
D
(b)
A, E
(c)
A, C
1010
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Justification
B, C
(b)
Increased staff turnover and lack of goal congruence are disadvantages to the
employer rather than the employee.
A, C
(b)
C, E
The other objectives are unsuitable as they are either non-specific (e.g. ensure)
or they would not be relevant to a practice nurse (e.g. home visits would be made by
health visitors).
Answer 46 CONFLICT
(a) (i)
(ii)
(iii)
A
B
C
(b)
A, F
(c)
B
C
A
(b) (i)
(ii)
(iii)
C
A
B
(c) (i)
(ii)
(iii)
(iv)
(v)
(vi)
C
B
B
A
C
A
A
A
C
C
(b) (i)
(ii)
(iii)
(iv)
A
C
A
C
(c)
A and B
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1011
Justification
C
A
A
B
(b) (i)
(ii)
(iii)
(iv)
E
A
e-mail might also be appropriate (but was not offered as an option and would
probably be a follow-up, rather than first instance).
Such a serious matter requires a formal announcement to those affected in person.
(Formal letters would follow to those absent from the meeting and to confirm
details.)
A final warning must be formal and written.
Answer 50 NETWORKS
(a) (i)
(ii)
(iii)
(iv)
C
B
D
A
(b) (i)
(ii)
(iii)
(iv)
D
C
D
A and B
A
D
B
C
F
E
(b)
B, D, E, F
D
A
B
C
(b)
B, C, D
(c)
1012
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Justification
1.1
The budget setting process identifies all links between the departments to be
identified. (10)
1.2
The age of an individual will have very little impact on the way that individual is
going to be managed, controlled, briefed, supervised and reviewed. (6)
1.3
1.4
The other statements relate to the human relations theory and the modern school.
(16)
1.5
1.6
The description relates to a process theory (explains how motivation occurs given
an individuals personal needs and goals). Maslow and Herzberg are content
theories (i.e. on what stimulates, sustains and regulates good directed behaviour).
McGregors XY theory is a process theory that considered two extremes, X and Y,
and the range of behaviour patterns in between. (20)
1.7
1.8
Data rights cover: processed fairly, specified and lawful purposes, accurate and up
to date, not kept longer than necessary, processed in accordance with the rights of
the data subject, protection from harm, not transferred to lower level countries. (3)
1.9
1.10
The five forces model concentrates on the competitive nature of an industry and
therefore attractiveness of a market. Attractiveness in this context means the overall
industry profitability. (3)
1.11
Although external, shareholders have a legal connection with the company and are
therefore connected (same as suppliers, customers). Internal stakeholders are
managers, employees and directors. External would be governments, communities,
external auditors. Conflict is not a stakeholder category. (2)
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Justification
1.12
Ad hoc deal with one off situations (A), C and D relate to specific examples of a
standing committee audit and remunerations committees. (8)
1.13
Deontological ethics is based on the concept of duty. Meta ethics is the study of
ethical behaviour, relativism is context dependent and subjective, instrumentalist is
based on use to further other objectives rather than as an end in themselves. (26)
1.14
B is irrelevant as the error has been corrected. C once approved the auditor will
issue their report. D would relate to an unqualified opinion. (11)
1.15
1.16
Books of prime entry are the sales, purchases, cash received, cash payments, petty
cash day books and the journal. (13)
1.17
B most accurately reflects the definition of internal control given by COSO and the
APB. Internal controls will not ensure the external audit is carried out correctly;
management are accountable to the shareholders for the implementation and
maintenance of internal controls and internal controls cover all information not just
that for management. (14)
1.18
1.19
Cyclical and seasonal would not be appropriate as the scenario clearly states that the
unemployment arises from a permanent reduction in employment. Frictional arises
through imperfect communication of available jobs in the market place of which
there is no indication in the scenario.
1.20
The board of directors is ultimately responsible for overseeing the running the
business. (14)
1.21
B and C are subsets of strong internal control. With B, only those employees who
are known to have carried out fraud should be sacked. Sacking only on suspicion of
fraud may result in unfair dismissal cases. Paying good money to employees will
not reduce fraud when opportunity, motive and rational arises. (15)
1.22
Best candidates are only likely to be found by using specialist recruiter to look
internally and externally (typical use for a head hunter). (How often do you meet
CFOs on the metro?) (17)
1.23
1.24
Coaching is about developing a persons skills and knowledge so that their job
performance improves. (23)
1.25
1014
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Justification
2.1
Value for money indicators and efficiency measures are commonly used in not-forprofit organisations such as local authorities. While local authorities have become
more exposed to commercial pressures in recent years, it is difficult to judge their
performance by the use of conventional financial and non-financial performance
measures. It is therefore necessary for these bodies to consider their results in
relation to what they have delivered to the community against the resources
consumed. By contrast, the private accountancy college, the retailer and the
pension fund rely heavily on performance and profitability measures. (1)
Tutorial note: Questions in the F1 exam are not restricted to private sector
organisations questions on any part of the syllabus may require candidate to
consider issues from a not-for-profit or public sector perspective.
2.2
2.3
Level 2 relates to espoused vales, level 3 to basic assumptions and values. (7)
2.4
In joining together to increase their power, high interest low power groups may
move to become high power, high interest groups. (2)
2.5
2.6
2.7
Using the titles given, the CEO and directors would not specifically need to know
how committees run. The company secretary is more administration and support.
The Chair would need to know exactly what the procedures are and how to apply
them they are in charge of the committee. (8)
2.8
Human rights is a fundamental ethical issue for all corporate codes of conduct. (26)
2.9
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1015
Justification
2.10
2.11
Of the four countries, Northland and Eastland both experienced negative economic
growth. However, Northland had a high level of price inflation, while Eastland was
able to contain price inflation at a more modest rate. The higher increase in the rate
of unemployment in Northland supports the impression that its economy is
experiencing stagnation. (4)
Tutorial note: Stagflation is an economic condition in which a country has a very
low or negative rate of economic growth, defined by the percentage change in
national income in a given period, concurrent with a high level of price inflation.
The economic indications most relevant to the question are therefore the percentage
change in GDP, which is a measure of economic growth, and the change in
consumer prices, which is a measure of price inflation.
2.12
A, C and D all relate to companies with share holdings. Local authorities do not
issue shares. (10)
2.13
develop, in the public interest, a single set of high quality understandable and
enforceable global accounting standards;
2.14
2.15
Product, price, promotion, place PLUS people, processes, physical evidence. (1)
2.16
2.17
From the scenario cost leadership and growth are not appropriate. Although the
company is innovative, the glove seat is used as a differentiator to make the
company stand out from the crowd. (3)
2.18
Stages are identify strengths and weakness (SWOT), set goals for each, develop
action plan. (23)
2.19
1016
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Justification
2.20
2.21
Young = age, natural blond implies white, attractive is against anybody who would
be considered ugly = equal opportunities. (18)
2.22
2.23
Auditing is not just about passing exams. Theoretical knowledge will come from
textbooks, but the practical application of knowledge, skills and attitude can only
come from practical experience. (21)
2.24
2.25
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
1017
Justification
3.1
3.2
After sales service is one of the five primary activities in Porters model.
Administration (Steve) and information technology (Sam) indicate support roles.
Sunnys responsibilities (for dealing with suppliers of inventory and capital
equipment) imply procurement, a support role. (3)
3.3
3.4
3.5
In order to reach the correct decision, all information that is not relevant to the
emergency situation should be eliminated from the pilots screens. Critical
information should be concise so the pilots know exactly what is going on.
Completeness can imply information overload; the information may be understood
and provide confidence but it can still be too much. Volume also implies
information overload. (24)
3.6
3.7
3.8
The carbon footprint is the part of the environmental footprint that specifically
relates to greenhouse gases. The social footprint is a measurement and reporting
method that quantifies the impact of an organisation on people. Recycling footprint
is a specific measure of the ability of an entity to use recycled materials and to
produce recyclable products. As with the carbon footprint, it can be incorporated
into some environmental footprint metrics. (3)
3.9
Although each organisation may fit into B, C or D, only the term supra-national
bodies cover all three. (3)
3.10
Toughness and the desire for material wealth and possessions clearly indicate the
chest-beating, my car is bigger than your car masculinity mentality. (7)
3.11
3.12
The evolutionary view considers conflict to be a positive force that is necessary for
effective performance. The happy family view relates to complete harmony and
loyalty in the workplace (no friction, no frustration, no conflict). Conflict is seen as
dysfunctional resulting in excessive emotional or physical stress. The traditional
view considers conflict to be a behaviour intended to obstruct the achievement of
goals desired by others. It is often included as part of the explanation of the Happy
Family view. (23)
3.13
1018
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Justification
3.14
Materials, labour and overheads are all production costs. Management accounting
covers all areas of cost and decision making. Financial accounting deals with IFRS
and is external orientated. Treasury deals with cash. (10)
3.15
CEO runs the whole business, CIA is internal audit, CCO deals with all laws and
regulations. (10)
3.16
It is not the auditors job to tell the directors what to do. Only material errors need
adjusting and if the directors refuse to do so they can still approve the financial
statements (although the auditor would qualify their opinion). If asked to do so by
the CFO, they may not show a true and fair view. True and fair is the over-riding
criteria. (12)
3.17
A will not discover if the employee has been removed from the payroll. B would
not identify if the authorised document had been correctly entered by the wages
dept. D is impractical. (14)
3.18
3.19
As the team members who left appear to be reasonably senior (as they have been
promoted to managers) other team members may now start to jostle for the
positions. As two new external employees have joined the team, they may naturally
feel that the vacant positions are theirs. (19)
3.20
Monitoring controls concerns receiving feedback that the controls are operating as
intended. The management letter is part of this feedback. (14)
3.21
Window dressing is making things look better that what they are (e.g. over stating
assets and under stating liabilities cut-off). Cash siphoning is the diversion of
cash (e.g. approving a bank loan to a company that does not exist). Ponzi schemes
involve receiving capital investment and paying interest back from further capital
received. Teeming and lading basically involves stealing cash and covering the
theft by an apparent correct transaction (e.g. bad debt write off). (7)
3.22
3.23
A supervisor is generally a junior manager who is part of the work team/group and
who carries out part of the work process themselves. They are a manager at the
coalface. (16)
3.24
Sell, as the smokers in the managers team would probably resent being told what to
do. Non-smoking rules can be very emotive with smokers. Consult and join are not
options. (16)
3.25
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1019
Justification
4.1
4.2
Herzberg argues that job security, working conditions and the level and quality of
supervision are all hygiene factors. He also argued that pay is a hygiene factor,
particularly basic pay. He did concede that if the level of salary implied status, then
it could be a motivator. Many (e.g. Vroom) would argue that in certain
circumstances pay can also be used as an incentive or a motivator. (20)
4.3
4.4
4.5
Based on the work of Hofstede, the description of the emerging nation indicates a
society with high individualism. (7)
4.6
(ii) a rise in interest rates will probably increase cost of borrowing, making
investment project less profitable. A fall in interest rates should increase
investments. (i) and (iv) are likely following a fall in the rate of interest as
borrowing becomes cheaper.
(iii) is likely as governments become wary of fuelling inflation. In addition, as
private sector investment is likely to increase and borrowing becomes cheaper, this
could add to inflationary pressures. (4)
4.7
In a person culture, the individual is the central point. Sir Johns chambers exist
only to serve him. Power is by consent and any power base is through expert
individuals who do what they are good at (e.g. legal research) and are listened to by
Sir John on that basis. (7)
4.8
McGregor put forward the concept of a whole range of the behaviour patterns of
people in organisations. The two opposite extremes were referred to as Theory X
and Theory Y. Theory X people dislike work, need direction and avoid
responsibility. Theory Y people are at the opposite end of the continuum and find
work as natural as rest and play. B relates to the work of Herzberg and C to that of
Maslow. (20)
4.9
MIS provide managers with pre-determined (by the manager) information they
require for monitoring day-to-day performance, maintaining co-ordination and
providing background information about the entitys operations. Reports may be
made on a template basis (i.e. regular management accounts) and variance analysis
or on an exception basis (i.e. show all inventory items with less than seven days
production capacity). (24)
1020
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Justification
4.10
4.11
Connected stakeholders are also external (e.g. suppliers are primarily connected but
also external). Directors, non-executive directors, executives, employees and the
company secretary are all internal; bankers, trade unions and auditors are either
connected or external. (2)
4.12
Employees are entitled to be able to carry out their work in relative safety and in
conditions that are not detremental to their health. Whistleblowing is an action
rather than a specific legislative requirement. It can occur in any situation (e.g. A, B
or D). (3)
4.13
The more sensitive demand is to a price change the more elastic it is said to be. Car
drivers consider the use of their cars for driving to work to be essential. The price of
the congestion charge is not considered to be a factor, demand is inelastic. (5)
4.14
4.15
4.16
4.17
Value for money (VFM) deals with the 3Es. Achieving objectives, competive
resources and the max/min philosophy are all apscets of VFM. IT/IS audits deal
with all aspects of IS in an organisation; operational audits are control orientated and
risk management provides assurance that business risks are being appropriately
identified and managed. (11)
4.18
The directors of an entity must approve the financial statements only if they are
satisfied that they give a true and fair view of the assets, liabilities, financial position
and profit & loss. The auditors provide an independent opinion to the shareholders
on the trurth and fairness of the financial statements. The tax authorites and the
company secretary have nothing to do with the preparation of the financial
statements. (12)
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1021
Justification
4.19
4.20
The attitude, awareness and actions of the board of directors and management. (14)
4.21
4.22
The website is the place where customers can search for a product, research it and
buy it if they wish. Most similar websites are also used for advertising or promoting
additional products (e.g. customers who purchased XYZ also purchased ABC and
STU). Similarly, if an item is purchased the company can promote additional or
new products through e-mail (given as part of the login procedures in order to buy
an item). The website also initiates the process of selling with the taking of an order
and the receipt of cash (credit card payment). (1)
4.23
4.24
Probing questions are used to obtain more detail on a subject or answer that has
already been raised by the interviewee (either in the interview on on an application
form/CV). Open questions require the interviewee to provide detail and explanation
(e.g. Why did you decide to become an accountant?) they cannot be answered
(as a closed question) with a simple yes or no. Reflective questions do just that,
they reflect back and check the interviewers understanding (e.g. Let me just
consider that last point you made so it was your father who first suggested you
become an accountant. (17)
4.25
The full steps are: concrete experience, observation, reflection, formation of abstract
concepts, applying/testing.
1022
Requisitions are
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Commentary
Most candidates knew that Janet did not portray the attributes of the resource
investigator, but unsuccessful candidates were almost equally divided between the
monitor-evaluator and the shaper. The attributes of Belbins team roles are
described thoroughly in the study materials.
The Secretary is the officer responsible for liaison between the company and the
registration body. The Chairman is the director responsible for ensuring the proper
functioning of the board of directors. It is therefore essential that these roles be
segregated. Only 20% of candidates identified this as the key.
Nearly 40% of candidates selected B as the correct answer. Although this is a
principle underpinning sound corporate governance, combining the roles of
Chairman and CEO would not impact on the flow of information between the
registration body and the company.
A and D are clearly incorrect, as the company Secretary is often also a director, and
in many companies the CEO is also the company Secretary.
The theory put forward by Honey and Mumford proposes four distinctive learning
styles that may be preferred by individuals in training situations. The theory
enables those responsible for education and training to consider the preferred
learning styles of those for whom they are responsible.
The scenario clearly identifies Joseph as a theorist, in that he learns in a logical and
systematic manner and prefers to see a framework in which the ideas put forward
may be seen. Further evidence of this is his aversion to being put on the spot
(which an activist might actually prefer).
Mendelows grid considers the relationship between the level of power and the level
of interest that stakeholders may hold. The grid identifies four situations, trading
off high/low power and high/low interest. By using Mendelows grid, companies
can map the positions of various stakeholders and formulate their strategies for
dealing with the interests of each.
In this scenario question it is clear that Walter had a high level of interest but little
power. Mendelow suggests that such stakeholders should be kept informed. By
inheriting a large block of shares in the company, his power has increased and he
must be regarded as a key player.
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
1023
Commentary
At this level of the ACCA qualification, candidates are not expected to have a
detailed knowledge of standing committees, but it is important that they understand
the broad roles of such committees.
7
By analysing costs and revenues through the use of marginal costing or related
techniques, the marketing department will know the extent to which discounts will
erode profit margin or contribution.
Analysis of costs and revenues cannot help the marketing department to
differentiate the technical features of products from those of competitors, as the
accounting information provided does not identify such information either for
competitors or the company itself.
Likewise, analysis of costs and revenues serves little purpose in relation to targeting
socio-economic groups, as this requires qualitative assessment of customer needs
and buyer motivation.
Production bonuses are not ordinarily decided by the marketing department.
It is a generally accepted principle that organisations should hold only data that is
necessary for operational purposes, and should not store data that goes beyond such
purposes.
It is impractical for most organisations to provide regular detail updates on personal
data held, and arguably of little importance to most data subjects, who in many
jurisdictions have a statutory right of access if they wish to obtain such information
from a data user.
It is also impractical for data users to enter into regular dialogue with data subjects
in order to check and update the data, though many organisations do so for the
purpose of marketing. It is undesirable for organisations to automatically delete all
data after a specified period of time, as it is usually appropriate that some data is
held for long periods while other may be retained for just a single transaction.
In this context, a check digit is usually a number included in an account number that
is calculated from the other numbers in it.
For example, it could be digit 2 plus digit 5 divided by digit 3. If an operative
makes a transcribing error, the check digit helps to identify the input error. Check
digits are not used for the other three purposes.
1024
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Commentary
10
A sense of identity can be brought about by common objectives in both a team and a
group. Likewise, bonding and loyalty can apply to both. Distractor C is more
tricky, in that a working team usually has an appointed leader, but it is not
impossible for leaders to emerge, especially when working groups are loosely
configured.
11
12
13
adopt a
and are
comply
are not
Meredith Belbins theory suggests that team effectiveness is maximised when team
members fulfil a balanced mix of roles. Her theory identifies nine team roles and
sets out the characteristics of each.
The indicators in the prompt that confirm Grant as a completer-finisher include the
phrases keen eye for detail, identifies minor details that others miss, always
meets his deadlines and reluctant to involve others. These are consistent with
Belbins descriptions of the contributions that the completer-finisher can make, as
well as possible weaknesses.
Like the completer-finisher, the implementer (or company worker) is disciplined
and reliable but is typified by being prepared to take concepts and ideas and then
put them into practical effect. The monitor-evaluator considers all alternatives and
often displays good judgement, but may lack personal drive. The shaper is good
under pressure and challenges the team to achieve its goals.
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
1025
Commentary
15
Distractors C and D are weaker. If the company waits until a few weeks after the
actual starting date, both the new employee and his or her colleagues may be
exposed to risk if the former is unaware of the health and safety policies. Most
companies rightly give high priority to health and safety issues, so this would be
totally unacceptable. Distractor D fails for the same reason as distractor A. There is
no certainty that the job will be offered or accepted.
16
17
1026
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Commentary
18
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
1027
Commentary
20
Candidates must read the question carefully in order to arrive at the correct answer.
Many may have assumed that the level of defects on after sales service costs were an
indicator of effectiveness of increasing expenditure, while these were only measures
relating to the effectiveness of quality controls. The costs of servicing, repairing and
running vehicles driven by the engineers related to overheads rather than the
effectiveness of after sales service.
1028
2014DeVry/BeckerEducationalDevelopmentCorp.Allrightsreserved.
Accountant in
Business
Specimen Exam applicable from June 2014
Paper F1
The major purpose of the International Accounting Standards Board (IASB) is to ensure consistency in ___________.
Which two words complete the sentence above?
A
B
C
Financial control
Corporate reporting
External auditing
(1 mark)
The leadership style that least acknowledges the contribution that subordinates have to make is ___________.
Which word correctly completes the sentence above?
A
B
C
Authoritarian
Autocratic
Assertive
(1 mark)
In relation to the management of conflict, which of the following approaches will maximise the prospect of
consensus?
A
B
C
D
Acceptance
Negotiation
Avoidance
Assertiveness
(2 marks)
Darragh has been appointed to the management team of a professional football club. His role includes coaching,
mentoring and counselling young players who have just signed contracts with the club for the first time.
The following are his main activities:
1
2
3
4
Which of the following matches the correct role to carry out in each of the four activities?
A
B
C
D
1.
1.
1.
1.
4.
4.
4.
4.
Counsellor
Coach
Mentor
Counsellor
(2 marks)
In order to ensure that the policies of an organisation are consistent with the public interest, on which of the
following should the directors of a company focus?
A
B
C
Martin is an experienced and fully trained shipbuilder, based in a western European city. Due to significant economic
change in supply and demand conditions for shipbuilding in Martins own country, the shipyard he worked for has
closed and he was made redundant. There was no other local demand for his skills within his own region and he
would have to move to another country to obtain a similar employment, and could only find similar work locally
through undertaking at least a years retraining in a related engineering field.
Which of the following describes the type of unemployment that Martin has been affected by?
A
B
C
D
Structural unemployment
Cyclical unemployment
Frictional unemployment
Marginal unemployment
(2 marks)
To
To
To
To
The following are sanctions used against companies for potentially unlawful actions:
1
2
3
4
Which of the above are the consequences of a listed company failing to file its accounts?
A
B
C
D
1
1
2
3
and
and
and
and
2
3
4
4
(2 marks)
[P.T.O.
The overall average age of a population in a country is directly dependent on two demographic factors: Birth rate and
death rate.
Assuming equal rates of change, which of the following must lead to an overall ageing of the population?
A
B
C
D
Birth rate
Rising
Falling
Rising
Falling
Death rate
Rising
Rising
Falling
Falling
(2 marks)
10 Gils is conducting an appraisal interview with his assistant Jill. He initially feeds back to Jill areas of strengths and
weaknesses of performance but then invites Jill to talk about the job, her aspirations, expectations and problems. He
adopts a non-judgemental approach and offers suggestions and guidance.
This is an example of which approach to performance appraisal?
A
B
C
D
To
To
To
To
verify all the financial transactions and supporting documentation of the client
ensure that the clients financial statements are reasonably accurate and free from bias
report all financial irregularities to the shareholders of the client
ensure that all the clients financial statements are prepared and submitted to the relevant authorities on time
(2 marks)
1, 2 and 3
1 and 3 only
2 and 3 only
(1 mark)
13 Wasim is the Customer Services Manager in a large leisure park. The forthcoming weekend is going to be the busiest
of the year, as it is a public holiday. Wasim has to cope with several absentees, leaving him short-staffed in public
areas of the park. His manager has told him that he expects him to catch up with some administrative reports that
were due last week. Wasim also has to arrange for six new staff to be trained, who will be arriving imminently.
In order to manage his workload most effectively, what should Wasim do?
A
B
C
D
14 In order to discharge their duties ethically, finance directors must ensure that the information published by their
organisations provides a complete and precise view of the position of the business, without concealing negative
aspects that may distort the readers perception of its position.
This duty describes which of the following ethical principles?
A
B
C
D
Probity
Honesty
Independence
Objectivity
(2 marks)
Agreement of legally binding financial reporting standards across all member accountancy organisations
Prevention of international financial crimes, such as money laundering and insider dealing
Promotion of ethical standards in all member organisations
Development of universally applicable detailed rules to deter inappropriate behaviours
(2 marks)
16 The following government policies can be used to expand or slow down the level of economic activity.
1
2
Taxation
Public expenditure
Which of the following combinations of policy would maximise expansion of the economy?
A
B
C
D
[P.T.O.
Physical evidence
Distribution (or place)
Price
Processes
(2 marks)
18 In relation to employee selection, which type of testing is most appropriate for assessing the depth of knowledge
of a candidate and the candidates ability to apply that knowledge?
A
B
C
Intelligence testing
Competence testing
Psychometric testing
(1 mark)
19 Malachi has been asked by his manager to obtain information about ABC Company, which is bidding for a contract
offered by Malachis company in the near future. The two statements which he will be using as his sources are the
statement of financial position (SOFP) and the statement of profit or loss (SOPL). The information he is required to
obtain is as follows:
1:
2:
3:
4:
Which of the following correctly matches the above items of information with the financial statements in which
they would be found?
A
B
C
D
1
SOFP
SOPL
SOPL
SOFP
2
SOPL
SOFP
SOFP
SOPL
3
SOPL
SOFP
SOPL
SOFP
4
SOFP
SOPL
SOFP
SOPL
(2 marks)
20 Linh owns a busy restaurant. She has had complaints from regular customers about diners failing to control their noisy
and unruly children, which is spoiling their dining experiences.
Which of the following courses of action would be regarded as a pluralist solution to this problem?
A
B
C
D
Setting aside a separate section of the restaurant for families with children
Not accepting bookings from families with children
Advising customers that the restaurant is a family restaurant before they book
Taking no action, assuming that those who complain will always be a minority
(2 marks)
All private individuals and corporate entities on whom only regulated data is held
All private individuals on whom only regulated data is held
All private individuals on whom any data is held
(1 mark)
22 The system used by a company to record sales and purchases is an example of which of the following?
A
B
C
D
Manager
Customer
Executive Director
Supplier
1, 2 and 3
2 and 4
2 and 3 only
3 and 4
(2 marks)
24 In an economic environment of high price inflation, those who owe money will gain and those who are owed money
will lose.
Is this statement true or false?
A
B
True
False
(1 mark)
25 Role playing exercises using video recording and playback would be most effective for which type of training?
A
B
C
D
[P.T.O.
26 Renata has attended a leadership development course in which she experienced a self-analysis exercise using the
Blake and Mouton managerial grid. The course leader informed her that the results suggested that Renata
demonstrated a 91 leadership style.
What other conclusions may be drawn in relation to Renatas leadership style?
1.
2.
3.
4.
She
She
She
She
A
B
C
D
1
2
1
2
and
and
and
and
2
4
4
3
(2 marks)
27 The implementation of a budgetary control system in a large organisation would be the responsibility of the internal
auditor.
Is this statement true or false?
A
B
True
False
(1 mark)
2 and 3
1 and 2
1 and 3
(1 mark)
2, 3 and 4
2 and 3 only
2 and 4 only
3 and 4 only
(2 marks)
31 A company has advertised for staff who must be at least 188 metres tall and have been in continuous full-time
employment for at least five years.
Which of the following is the legal term for this practice?
A
B
C
D
Direct discrimination
Indirect discrimination
Victimisation
Implied discrimination
(2 marks)
32 Which one of the following statements is correct in relation to monetary rewards in accordance with Herzbergs
two-factor theory?
A
B
C
D
33 In a higher education teaching organisation an academic faculty is organised into courses and departments, where
teaching staff report both to course programme managers and to subject specialists, depending on which course they
teach and upon their particular subject specialism.
According to Charles Handys four cultural stereotypes, which of the following describes the above type of
organisational structure?
A
B
C
D
Role
Task
Power
Person
(2 marks)
[P.T.O.
34 Which pattern of communication is the quickest way to send a message to all intended recipients?
A
B
C
D
The
The
The
The
circle
chain
Y
wheel
(2 marks)
Kelly
Pawel
Kelly and Pawel
(1 mark)
36 Which of the following types of new legislation would provide greater employment opportunities in large
companies?
A
B
C
D
New
New
New
New
laws
laws
laws
laws
The
The
The
The
38 Adrian is the manager of a call centre. Consultants have advised him that by reorganising his teams to complete highly
specific tasks the call centre will be able to increase the throughput of work significantly, as well as increasing the
number of sales calls made to the public. The reorganisation proposals are unpopular with many workers, who feel
that their jobs will become tedious and repetitive.
The proposal to reorganise the work of the call centre utilises principles put forward by which school of
management thought?
A
B
C
10
39 The aggregate level of demand in the economy is made up of government expenditure, __________, __________ and
net gains from international trade.
Which of the following correctly completes the sentence above?
1.
2.
3.
4.
Savings
Taxation
Investment
Consumption
A
B
C
D
1
2
3
1
and
and
and
and
3
3
4
4
(2 marks)
40 In the context of marketing, the four Ps are price, promotion, __________ and __________.
Which TWO words correctly complete the above sentence?
1.
2.
3.
Product
Positioning
Place
A
B
C
1 and 3
1 and 2
2 and 3
(1 mark)
42 FKT Company is considering the introduction of a code of ethics following media criticism of its selling practices.
Which of the following is most important when deciding on the content of the proposed code of ethics?
A
B
C
D
The
The
The
The
11
[P.T.O.
43 Ahmed is preparing his personal development plan. He is particularly concerned about how others see him.
In order to analyse this aspect of his personal development plan further, Ahmed should consider which of the
following?
A
B
C
44 Jackie leads an established team of six workers. In the last month, two have left to pursue alternative jobs and one
has commenced maternity leave. Three new staff members have joined Jackies team.
Which one of Tuckmans group stages will now occur?
A
B
C
D
Norming
Forming
Performing
Storming
(2 marks)
45 In the context of fraud, teeming and lading is most likely to occur in which area of operation?
A
B
C
D
Sales
Quality control
Advertising and promotion
Despatch
(2 marks)
46 Which of the following statements is true in relation to the average revenue function of a business in a perfect
market?
A
B
C
It is diagonal
It is horizontal
It is vertical
(1 mark)
12
There are essentially five functions of management that apply to any organisation
Individual and group behaviour at work is a major factor in productivity.
Management is the development of a true science of work.
The manager of a business has one basic function economic performance.
Required:
(a) Identify the description above which is associated with each of the following theorists, by selecting A, B, C,
D or None.
(i)
(ii)
(iii)
(iv)
Peter Drucker
Elton Mayo
Henry Mintzberg
F W Taylor
Note: The total marks will be split equally between each part.
(2 marks)
Planning
Organising
Managing
Monitoring
Motivating
Required:
Write down which two of the above are those functions identified by Fayol by selecting TWO of the letters
from (A, B, C, D, E).
(2 marks)
(4 marks)
13
[P.T.O.
(a) XYZ Company installed a computer system to handle its main accounting functions including accounts
receivables, accounts payables and payroll. Management has a number of concerns about access to the system
and are considering a number of controls to overcome those concerns.
The following are types of control they are considering:
A
B
General control
Application control
Required:
Classify the following as either A (General control) or B (Application control):
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
(2 marks)
(b) A company has considerable cash collections on a regular basis. The cashier receives the cash, records it and
then banks it at the end of each day. Since a single person is responsible for access to cash, the financial director
is concerned that fraud and error may occur in cash handling and recording. He proposes use of appropriate
internal controls to prevent any such errors or misappropriations.
The following are specific examples of internal controls used in business:
A
B
C
D
Segregation of duties
Induction and training
Authorisation limit
Internal audit
The following sentences contain gaps which specify the appropriate internal control which could be used to
prevent fraud and errors.
Fraud and errors in handling cash can be prevented through
process a complete transaction.
Required:
(i)
Select the correct internal control which appropriately fills gap 1 above; i.e. select A, B, C or D.
(1 mark)
Even if such a measure were introduced, the possibility exists that staff could act together to perpetrate fraud and
bypass this control. This can be prevented through
as it would ensure awareness of the heavy sanctions
2
to be imposed in cases of dishonesty.
(ii) Select the correct internal control which appropriately fills gap 2 above; i.e. select A, B, C or D.
(1 mark)
(4 marks)
14
There are a number of ways of developing staff on a one-to-one basis within organisations. Each has its own strengths
and weaknesses and is appropriate in different work situations.
Examples of types of development include coaching, mentoring, counselling and appraising.
Required:
(a) For each type of development below, which work situation is most appropriate?
A
B
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
(2 marks)
Determine remuneration
Decide promotions
Career and personal development
Resolve a grievance
Demonstrating how to perform
Using experienced staff for training
Providing a role model for an employee
Required:
Which TWO of the above are benefits of this approach? Select TWO from (A, B, C, D, E, F, G).
(2 marks)
(4 marks)
15
[P.T.O.
Internal stakeholder
External stakeholder
Connected stakeholder
Required:
For each of the following, indicate whether they are internal, connected or external stakeholders.
(i)
(ii)
(iii)
(iv)
Note: The total marks will be split equally between each part.
16
(2 marks)
(b) Complete the following sentences about Sport-4-Kidz stakeholders, with reference to Mendelows grid.
The local residents exert
(i)
and should be
Write down A, B, C or D.
(ii)
Write down A, B, or C.
The building companies exert
and should be
Write down A, B, C or D.
(iv) Select which ONE of the following fills Gap 4:
A
B
C
Write down A, B, or C.
Note: The total marks will be split equally between each part.
(2 marks)
(4 marks)
17
[P.T.O.
Accounting bodies set out a code of ethics to establish ethical behaviour requirements for professional accountants.
(a) The following are qualities you might see in a professional at work:
Integrity
Honesty
A
Trustworthiness
B
Expertise
C
Professional
behaviour
D
Confidentiality
Respectfulness
F
Objectivity
Required:
Write down which of the FOUR boxes from (AH) contain fundamental principles of ethical behaviour from
the IFAC (IESBA) and ACCA codes of ethics.
(2 marks)
(b) The following are desirable characteristics of professions and vocations:
A
B
C
D
E
F
G
H
Required:
Select FOUR of the characteristics from the list above, which distinguish a profession from an occupation.
(2 marks)
(4 marks)
18
Company A is an accountancy professional body which has a tall structure and a high level of centralisation. The span
of control is very narrow. Subordinates have minimal latitude for self-determination or to influence decision-making
and mainly concentrate on carrying out highly prescribed and defined roles.
Company B is a financial services company which gives a wide ranging role to its traders and promotes cultural values
such as assertiveness, risk appetite, and a high degree of competition between employees. The employees are usually
young and unmarried, and work and socialise together for long hours at a frenetic pace.
Company C is a research and development company where the business is divisionalised by product. Staff work very
flexibly and often need to communicate laterally to achieve objectives through ad hoc projects and collaboration. There
are no formal rules about reporting structures, or about set starting or finishing times. Staff are rewarded on the basis
of creativity and innovation.
Company D is a family company which is highly controlled by the owners and the CEO is the main shareholder. There
is a very low staff turnover, but employees are expected to be very loyal to the company and are often required to
work long hours and carry out tasks outside their normal range of duties. Relationships between employees and
managers are very informal and close and the rights of employees and their overall interests are strongly defended by
the owners when challenged.
The following are dimensions used by Hofstede to classify types of organisational culture:
A
B
C
D
Power distance
Uncertainty avoidance
Individualism
Masculinity
1. High
A1
B1
C1
D1
2. Low
A2
B2
C2
D2
Required:
(i)
For Company A select which combination of dimensions apply from the grid above. (For example A1)
(1 mark)
(ii) For Company B select which combination of dimensions apply from the grid above. (For example A1)
(1 mark)
(iii) For Company C select which combination of dimensions apply from the grid above. (For example A1)
(1 mark)
(iv) For Company D select which combination of dimensions apply from the grid above. (For example A1)
(1 mark)
(4 marks)
19
Answers
Section A
1
The IASB aims to promote consistency in corporate reporting by creating financial reporting standards to which major
businesses are expected to adhere.
The Ashridge model identifies four styles: autocratic; authoritarian; consultative; laissez-faire (or participative). The first of
these is the least participative.
Negotiation gives the best opportunity for the two sides in a conflict to converge their positions. The other options either
involve backing down, forcing a position, potentially increasing conflict, or leaving the issue unresolved.
Mentors usually help staff on broader work related development, including orientation and induction. Coaches work on
developing specific skills of the job itself, while counsellors work with people on a personal level, perhaps if they are having
non-work related or emotional problems.
The board of directors are responsible for the well being of a wide group of constituencies, including shareholders, but also
employees and other internal, external and connected stakeholders.
Because of the particular circumstances of the scenario where someone is made redundant from an industry in decline where
skills cannot be easily transferred, where re-training might take a long time or where work is not available in the short term
within a reasonable geographic proximity, this is classed as structural unemployment.
The basic principle that underlies marketing is that it is a management process that identifies and anticipates customer needs.
The other distracters in the question refer to specific activities undertaken by a marketing function.
The normal sanctions in such a case is that fines are imposed on companies by the registration body of the company and,
where listed, the company may be delisted by the stock exchange authorities. Although the option wasnt included, sanctions
against responsible directors may also be imposed.
The ageing population trend is caused by a decreasing birth rate and a decreasing mortality rate.
10 B
The tell and listen approach encourages input from the individual, promoting participation in the process by the appraisee.
11 B
The external auditor has to ensure that the financial statements of the organisation truly reflect the activities of the business
in the relevant accounting period. This assessment should be independent and therefore free from subjectivity on the part of
the management of the client organisation.
12 B
Annual targets and management forecasts from performance appraisals indicate medium term planning horizons which are
both tactical in nature, whereas product development plans for 23 years are longer term strategic objectives.
13 A
An employee with a range of tasks or objectives to achieve and pressures to achieve them to set deadlines, should always
prioritise tasks in accordance to business importance. Deciding on other criteria such as pressure applied by colleagues,
whether someone is absent or not or simply because a task is urgent may damage wider business objectives.
14 D
A professional accountant acting in accordance with fundamental ethical principles is demonstrating objectivity when they
give a complete and precise view, which by implication means that negative aspects should not be concealed or positive
aspects accentuated.
23
15 C
IFAC has no legal powers against businesses, nor does it set financial reporting standards. It is an accounting association
member body which promotes educational and ethical standards of behaviour amongst its member bodies, through a code
of ethics and behaviour, but does not prescribe detailed rules on this.
16 C
Increasing taxation leaves individuals with less disposable income for expenditure within the economy thereby slowing
economic activity. The same effect is caused by a reduction in government expenditure. Therefore economic activity can be
stimulated by reducing taxation and increasing government expenditure.
17 C
Information on purchase costs of finished goods or raw materials is important in establishing the price of a product. In terms
of the marketing mix, this information is most relevant to the price element as prices should be set at least to cover cost and
give an acceptable level of profit.
18 B
As the test is needed to test specific skills, competence testing is most appropriate. Intelligence and psychometric tests are
intended to assess innate ability or psychological traits, which are more general.
19 D
The key correctly matches the information required to the particular financial statement in which they are to be found.
20 A
The pluralist solution is to cater for the needs of more than one stakeholder group without seriously compromising the interests
of any individual group. Therefore setting aside a special area for families with children while having an adults only section
would achieve this. The other options involve adversely affecting the rights of one or other group of stakeholders in some way.
21 B
Data protection legislation is formulated to protect the interests of data subjects who are private individuals. Not all data is
regulated.
22 A
A transaction processing system enables all sales and purchase transactions to be recorded by volume and category.
23 B
is correct because customers and suppliers deal closely on a transactional basis with the organisation, but are not internal
stakeholders like managers and executive directors.
24 A
Where price inflation is high the value of money reduces consistently over time. Those who owe money (debtors) therefore
pay back less capital in real terms, and interest rates seldom adjust adequately to compensate for this.
25 A
Role playing exercises are most effectively used for skills development, including sales training. Other common business
applications include effective selection interviewing and performance appraisal interviewing.
26 B
The Blake and Mouton managerial grid enables leadership styles to be categorised on a nine point scale with reference to
concern for production and concern for people. Renata is therefore highly concerned with the task and much less interested
in her team as individuals.
27 B
The implementation of a budgetary control system would be the responsibility of the financial controller in many organisations.
The internal auditor is not responsible for implementing systems, but is involved in monitoring the effectiveness of these
systems.
28 C
The external auditor is responsible for ensuring that financial reports portray a true and fair view and comply with legal
disclosure requirements. External auditors are not responsible for ensuring that systems exist to prevent fraud.
29 A
Integrity is about honesty and applying morality to business and professional behaviour. A person acting with integrity should
not be corruptible. Neutrality in the making of business decisions does not indicate morality nor does producing accurate
work, which is more about professional competence.
24
30 B
Only shareholders have voting power related to the number of shares that they own. Members of a co-operative organisation
can vote but will only have one vote. Co-operatives may be owned by members, but ownership stakes cannot be exchanged
between members unless the members belong to limited companies.
31 B
To discriminate against someone on the grounds of characteristics which are predominately associated with their sex, gender,
nationality or religion is illegal. As women are generally shorter than men, to restrict admission on the basis of height,
indirectly discriminates against women. The other options are either direct discrimination, or other illegal and undesirable
employment practices.
32 B
According to Herzberg, money is a hygiene factor (or dissatisfier). Although it is a powerful short-term motivator, it is
questionable whether each individual increase in monetary reward will have a major long-term effect. According to Herzberg,
A reward once given becomes a right.
33 B
The task culture is appropriate where organisations can accommodate the flexibility required to adjust management and team
structures to address the tasks that must be fulfilled. This is very common in large consultancy firms.
34 D
The wheel facilitates transmission of the message directly to all receivers and therefore transmits most quickly.
35 C
Both parties in a two way communication link will need to encode messages and both have to decode them for them to be
understood. The other options imply that only one party encodes messages.
36 B
Equal opportunity policies widen opportunity and enlarge the potential pool of employees to recruit from. The other options
either indirectly or directly reduce the potential for staff turnover and therefore limit the number of job vacancies available at
any point in time.
37 D
The primary aim of a public oversight board is to eliminate or minimise any actual or potential breaches of legislative
requirements and to ensure compliance with regulations applicable to organisations within their terms of reference.
38 C
Scientific management principles consider the ways in which the factors of production (land, labour, capital and the
entrepreneurial function) can be combined to maximise efficiency in production. The founding principles are based on the
work of Frederick Winslow Taylor. The reorganisation of the call centre follows these principles.
39 C
The components of effective demand in the economy are consumer spending, investment by enterprises, central and local
government expenditure and the net gains from international trade.
40 A
41 B
Decentralisation devolves authority to lower levels and gives more autonomy to individuals and teams. Decentralisation on
the other hand increases risk as there is less control over individual and group behaviour and decision-making. Allowing more
freedom to act independently leads to less consistency across the organisation.
42 A
Compliance with legal requirements may not eliminate unethical behaviour. The issues of concern to those who complain
may not be fully representative of issues of concern to customers in general. Other companies in the sector may not be
concerned about ethical behaviour.
43 C
Using SWOT analysis, the way to conduct this analysis would be for the individual to consider their own strengths and
weaknesses and how they could affect the impression given to others. The other options are external factors to the individual
so would not directly affect the opinion that others would have of that individual.
44 B
As new members are about to join the group, essentially the group is reforming which is the start of a new group development
process. The other options are all later stages in group development as identified by Tuckman.
25
45 A
Teeming and lading involves the theft of cash and is a type of fraud that is carried out by manipulating transactions. There
would be most potential for this fraud within the sales department where cash may be received and remitted.
46 B
The demand curve of a company in a perfect market is horizontal, because they can sell as much as they want at a given
market price and nothing at all at a price set higher than the prevailing market price.
Section B
1
(a)
(i)
(ii)
(iii) None
(iv) C
Rationale: The individual writers given in the key are associated with the relevant management theory
(b)
(a)
(i)
(ii)
(iii) A
(iv) B
(b)
(a)
(i)
(ii)
(i)
(ii)
(iii) A
(iv) D
(b)
C and G
(a)
(i)
(ii)
(iii) C
(iv) B
(b)
(i)
(ii)
(iii) D
(iv) C
(a)
A, E, F, H
(b)
A, C, D, G
(i)
A1
(ii)
D1
(iii) B2
(iv) C2
26