6: The finance funtion and financial information

Question 1

CATIVA mnemonic can be used to remember the issues related to effective processing of data into information. What does it stand for?

Answer 1

Completeness
Accurate
Timeliness
Inalterability
Verifiability
Assessability

Question 2

Centralisation of the finance function is least likely to be effective in:

External reporting to shareholders
Recording financial transactions
Managing cash
Internal reporting to operational managers

Answer 2

Internal reporting to operational managers

Question 3

Ensuring that the company always has sufficient funds availabel to meet its short terms and long term financial requirements. Which section would these responsibilities fall in?

Financial reporting
Management accounting
Treasury management
Transaction processing

Answer 3

Management accounting

Question 4

What is the main consideration of a finance director producing management accounts

Answer 4

The information needs of the managers, who will use the management accounts to plan, control, make decisions and monitor performance

Question 5

The IFRS Framework states that if financial information is to be useful, it must be ___ and ___

Answer 5

relevant and faithfully representative

Question 6

What two parties / approaches encourage organisations to improve reporting of their economic, environmental and social impact?

Answer 6

GRI (Global Reporting Initiative standards) and Triple Bottom Line approach

Question 7

How many types of information are there?

Answer 7

4

Question 8

“Helps people carry out their day to day activities” - what type of information is this?

Answer 8

Operational information

Question 9

“Helps people deal with short term issues and opportunities”

What type of information is this?

Answer 9

Tactical information

Question 10

“Supports major long term decision making”

What type of information is this?

Answer 10

Strategic information

Question 11

What is the area outside of an information system boundary called?

Answer 11

Environment

Question 12

What do range checks help to deliver?

Completeness, or accuracy, or both?

Answer 12

Accuracy only

Question 13

What is the interaction between the transaction processing system and management information system?

Answer 13

The transaction processing system is likely the foundation to the management informations systems

Question 14

When financial information influences the decisions of users it is said to be ____.

Positive
Timely
Material
Relevant

Answer 14

Relevant

Question 15

Financial statements are used by investors, management and …?

Answer 15

Payables (creditors)