6: Finance Function

Question 1

What are the four main functions of finance?

Answer 1

Recording financial transactions

Financial reporting (external)

Management accounts (internal)

Treasury management (internal)

Question 2

What is business partnering?

Answer 2

Members of the financial function partnering within functional areas in a value adding capacity

Provide advice and support to drive performance

Particularly to:
- marketing
- IT
- procurement
- operations

Question 3

What are the five purposes of financial information and who uses it?

Answer 3

Planning
Controlling
Recording transactions
Performance measurement
Decision making

Can be internal or external users

Question 4

What are the three levels of financial information?

Answer 4

Strategic

Managerial/tactical

Operational

Question 5

What are the six issues related to effective processing of data?

Answer 5

CATIVA

Completeness
Accurate
Timeliness
Inalterability
Verifiability
Assessability

Question 6

What are TPS and examples?

Answer 6

Transaction processing systems
- perform and record routine transactions

• finance/accounting systems
• HR systems
• manufacturing/production systems
• sales/marketing systems

Question 7

What are MIS?

Answer 7

Management Information Systems

Systems to produce information allowing managers to make effective decisions

Question 8

What are the six info security issues?

Answer 8

ACIANA

Availability
Confidentiality
Integrity
Authenticity
Non-repudiation
Authorisation

Question 9

What are the five types of info controls?

Answer 9

Physical access controls

Security and integrity controls
- input
- output

Back up and archiving

Personnel controls

Segregation of duties

Question 10

What are 6 key performance measures?

Answer 10

Profitability

Activity

Productivity
- economy
- effectiveness
- efficiency

Critical success factors

Key performance indicators

Benchmarking

Question 11

5 limitations of financial performance indicators?

Answer 11

Historical info can be useless when looking at future

Mostly internal performance instead of external

Encourages short term decision making

Can be easily manipulated by policies

Does not consider whole picture

Question 12

What are the four performance indicators on a balanced scorecard?

Answer 12

A mixture of financial and non-financial perspectives

• Financial perspective
• Customer perspective
• Internal business perspective
• innovation and learning perspective

Question 13

What are the five aspects of internal control (same as assurance)

Answer 13

Control environment
Control activities
Risk assessment processes
Information systems
Monitoring