Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CIMA E1 > 8 - Operating Levels of Finance Function > Flashcards

8 - Operating Levels of Finance Function Flashcards

1
Q

Financial reporting, mgmt accounting, treasury and internal audit are all linked to which level of the finance diamond structure? What does this mean their role is?

A

Level 4 = lowest level - smart finance factories.

Role is to generate info & provide prelim insights.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

3 insights financial reporting provide

A
  1. financial statements
  2. analyse effect of changes in accounting standards
  3. Dashboard of financial ratios & impact on share price
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

3 benefits of financial reporting function

A
  1. Accurate draft financial statements = min adj for audit

2. Improved mgmt decisions as impact of decisions on financial statements can be predicted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

4 insights mgmt accounting provide.

A
  1. Monthly mgmt accounts = analyse variance
  2. Real-time monitoring of perf
  3. Budgets and forecast
  4. Monitor KPIs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

1 benefit of mgmt reporting function

A

Greater insight into perf = better decision making and hence potential for more profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

4 insights provided by treasury function

A
  1. Working K reports
  2. Advice on sources of funding
  3. Monitor & predict effect of currency & IR changes
  4. Predict demand for new shares at diff issue prices to determine optimum price.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Do treasury maintain assets?

A

NO - the relevant department do this themselves once treasury has advised on source of funding for asset.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

1 benefit of treasury function

A

Improved investment decisions - only undertaken beneficial ones = improved LR profits.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

4 insights provided by internal audit

A
  1. Effectiveness of internal controls
  2. Prevent and detect fraud
  3. Effect of changes in bis environ on org
  4. Analyse & quantify effect of key risks on org
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

2 benefits of internal audit.

A
  1. Improved identification & mgmt of bis risks

2. Less chance of disruptive events -VE impact org

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

For this chapter, the specialist finance areas relate to which level of diamond finance structure? What does this mean for their role?

A

Level 3 - digital COEs

Provide further insight to decision makers about value creation and preservation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

FP&A =

A

help org to set, monitor and evaluate their progress in achieving goals and objectives.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

3 main roles of FP&A

A
  1. Analysing org perf
  2. Analyse trends in bis environ
  3. Predict future trends and perf
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of the 4 finance activities do FP&A perform?

A

Contemporary - analysing for insight & advising to influence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

FP&A are able to leverage…

A

Tech advances e.g. cloud computing, big data, data analytics and data visualisations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

FP&A insight wrt assets

A

How best to use surplus assets e.g. by investing in projects, increased inventory & payment of dividends.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

FP&A insight wrt financial health

A

overall financial health of org including analysing financial ratios and drivers behind them.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

FP&A insight wrt major board decisions

A

budgeting, forecasting and data analysis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Do FP&A look at past or future perf?

A

BOTH - analyse past org perf and also budget and forecast for future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

FP&A insight wrt products

A
  • which products generate largest portion of net profit?

- which products generate highest and lowest profit margins?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

FP&A insight wrt cost

A

How cost effective each bis area is and what % of financial resources each consumes vs what they generate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

FP&A insight wrt budget

A

Develop master budget for org based on each function’s budget prepared by each area of bis.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Taxation teams role =

A

Specialist tax experts who provide info and support to bis functions on tax matters.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Aim of tax team

A

Min risk of non-compliance and create value by lawfully reducing tax liabilities (being tax efficient), controlling when tax is paid and max tax relief/available credit.

25
Q

5 insights provided by tax team

A
  1. Impact of projects and fcast future perf on tax liability
  2. Monitor $ systems to ensure correct tax treatment
  3. Predict future tax due to change in regs/laws
  4. Predict gov changes in future tax
  5. Identify tax loopholes & legal ops
26
Q

Project mgmt teams =

A

Ensure projects are delivered on time, at the right quality and within budget. Involve several stakeholders.

27
Q

Time, cost, quality triangle refers to…

A

project mgmt needing to deliver projects on time, within budget and at the right quality.

28
Q

What do project mgmt team provide to a project?

A

Communication, teamwork, objectives and resources.

29
Q

Project mgmt insight wrt plannning

A
  • create project plans: project scope & required resources
  • project budget - then monitor and review
30
Q

Project mgmt insight while project in progress

A
  1. communicate progress & predicted completion

2. suggest sequencing of project activities

31
Q

Project mgmt insight wrt risks

A

Monitor and mitigate project risks and impacts on bis areas.

32
Q

Project mgmt insight wrt reviewing

A

Post-implementation review: lessons learned for wider org.

33
Q

Project mgmt: stage 1

A

Initiation = identify need for project and appraised for feasibility

34
Q

Project mgmt: stage 2

A

planning = project plan created covering issues such as communication, resources needed, establish measures of success.

35
Q

Project mgmt: stage 3

A

executing = project team performs their roles under leadership and coord of project manager.

36
Q

Project mgmt: stage 4

A

controlling = progress, cost and perf monitored against project plan and corrective action taken.

37
Q

Project mgmt: stage 5

A

Review and close = project signed off and project team disbanded. Project review meeting held.

38
Q

The cost of a project refers to what type of resources?

A

Finance and non-financial such as staff time.

39
Q

Project appraisal team =

A

analyse the financial and non-financial aspects of potential projects to give go ahead or not.

40
Q

4 examples of work project appraisal team perform

A
  1. Investment appraisals e.g. NPV, payback, IRR
  2. Estimate and analyse costs & benefits
  3. Analyse potential non-$ impacts e.g. CSR, environ
  4. Decision of whether or not to proceed
41
Q

Which level of diamond structure is business partnering?

A

Level 2 - strategic business partnering

42
Q

Which level of diamond structure is strategic partnering for value?

A

also Level 2 - strategic business partnering

43
Q

Strategic partnering for value =

A

Extends concept of bis partnering to most senior levels in org. Senior finance managers embedding themselves with senior bis directors

44
Q

4 roles of strategic partnering for value

A
  1. influence decisions
  2. support implementation of decisions
  3. achieve desired impact
  4. communicate insights to users
45
Q

Business partnering vs strategic partnering for value

A

Bis partnering = provide insights to individual functions
Strategic partnering = providing insights to senior leadership to make strategic decisions that affect whole org e.g. whether or not to leave a certain mkt

46
Q

5 benefits of strategic partnering for value

A
  1. Ensure senior leadership has necessary info to make strategic decisions
  2. being voice of reason - bring risks to attention
  3. Forward-thinking by monitoring key bis indicators that give advanced warning of potential strategic issues such as econ downturns
  4. trusted source of info
  5. Increase agility of org to react to threats and ops by monitoring bis environ.
47
Q

what’s at level 1 of finance diamond shape?

A

Strategic leadership (senior finance team)

48
Q

The strategic leadership team of finance consists of…(2)

A
  1. CFO

2. Senior finance mgrs who directly report to them as part of senior finance team.

49
Q

CFO AKA

A

finance director

50
Q

The senior finance team must ensure that…

A

business partnering works well throughout org - they’re responsible for insights provided by overall finance function.

51
Q

COEs have enabled significant improvements in…(2)

A
  1. Expertise &
  2. Skill
    of the finance team
52
Q

Senior leadership of the firm refers to…

A

board of directors
CEO
CFO
May also include highest level of mgmt who report into and support the board directly.

53
Q

3 attributes of the finance function are…

A
  1. Knowledge
  2. Skill
  3. Experience
54
Q

Knowledge =

A

technical expertise usually provided by achievement of professional qualifications such as CIMA. But it can also be learned as a consequence of performing a role.

55
Q

Skill =

A

the ability to perform a role or apply knowledge.
Could have knowledge of what something is and what steps are required to perform a task, but not the skill to actually produce and finish it.

56
Q

Experience =

A

Overall familiarity and mastery of a particular area. Culmination of knowledge and skills and how they relate to the real world.

57
Q

What attribute between a newly qualified accountant and expert differs?

A

Experience - it is experience that turns the newly qualified accountant (who has skills and knowledge) into an expert who has the respect and trust required for decision makers to listen to their advice.

58
Q

Attributes in lower levels of finance function & why these workers are important

A

Lower levels of all attributes

But important to provide the basis of data and info relied upon by more senior employees.

59
Q

What should finance prioritise out of the 3 attributes?

A

None - need the right mix between the 3 at each level of the function.

CIMA E1 (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions