1 Roles of finance in orgs

Question 1

What are the main roles of the finance function in organisations?

Answer 1

Enable;

P lanning

F orecasting

R esource allocation

Shape;

P erformance management
and control

Narrate;

F inancial reporting

Question 2

What is the main aim of profit seeking organisations?

Answer 2

To maximise the wealth of their owners

Question 3

What are the secondary objectives of profit seeking organisations?

Answer 3

Detailed objectives as to how to maximise owner wealth

Question 4

What are the main objectives of not for profit organisations?

Answer 4

To maximise the benefit to beneficiaries

Question 5

What are the secondary objectives of non profit organisations?

Answer 5

Economy - controlling costs

Efficiency - achieving objectives at minimum costs

Effectiveness - a measurement of achievement by reference to objectives

Question 6

What are the 5 fundamental principles of CIMA’s code of ethics?

Answer 6

P rofessional competence and
due care

O bjectivity

P rofesional behaviour

I ntegrity

C onfidentiality

Question 7

Describe Mendelow’s power/interest matrix

Answer 7

Low power / low interest - minimal effort

High power / low interest - keep satisfied

Low power / high interest - keep informed

High power / high interest - key players

Question 8

Describe the 3 different types of stakeholders

Answer 8

Internal - eg employees, managers/directors

Connected - eg shareholders, customers suppliers

External - eg community at large, government, environmental pressure groups

Question 9

Define CSR

Answer 9

CSR refers to the idea that a company should be sensitive to the needs of all of its stakeholders and not just shareholders