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BTF Flashcards

1
Q

What is the primary objective of a PLC?

A

Profit maximisation for shareholders

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2
Q

What 8 areas did Peter Drucker point out that managers should be focussed on? (WMP PIMPS)

A
  • Worker performance and attitude
  • Market standing
  • Productivity
  • Profitability
  • Innovation
  • Manager performance and development
  • Physical and financial resources
  • Social responsibility
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3
Q

What is a company’s ‘mission’ and what are the four elements?

A

A mission is the business’ basic function in society and is expressed in terms of how it satisfies its stakeholders. The four elements are:

Purpose

Strategy

Policies and standards of behaviour

Values

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4
Q

Different types of goals and what they should be

A

Qualitative (aims) vs quantitative (objectives)

Should be SMART

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5
Q

Three types of standards

A

Physical standards

Cost standards

Quality standards

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6
Q

6 types of power according to French and Raven (followed by Charles Handy) (CRERNL)

A

Coercive power

Reward (or resource) power

Legitimate (or position) power

Expert power

Referent (or personal) power

Negative power (Handy)

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7
Q

What cannot be delegated

A

Accountability (remains with manager)

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8
Q

4 types of manager

A

Line manager

Staff manager

Functional manager (authority over other depts for your specific part)

Project manager

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9
Q

3 key managerial roles as defined by Mintzberg

A
  1. Informational role
  2. Interpersonal role (such as representing your team)
  3. Decisional role (any kind of decision)
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10
Q

Effectiveness of any manager will be influenced by what 3 things?

A

Authority

Autonomy

Leadership

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11
Q

Taylor’s model of scientific management: 3 assumptions and 5 principles

A

3 basic assumptions:
- people are rational economic animals concerned with maximising economic gain

  • people respond as individuals not groups
  • people can be treated in a standardised fashion, like machines

Five principles:
1. Determine the one best way of doing a particular task

  1. Select the best person to do this task
  2. Train the worker to follow the set procedure
  3. Give financial incentives to ensure the work is done in the right way
  4. Give all responsibility to plan and organise work to the manager, not to the worker
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12
Q

McGregor’s model: theory X and theory Y

A

Theory X:
Individuals dislike work so need coercion, control and punishment.

Theory Y:
Physical and mental effort is natural. Commitment is driven by rewards.

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13
Q

Maslow’s conent theory: the hierarchy of needs (SSSSB)

A

TOP (last)

Self-actualisation

Status/ego

Social

Safety/security

Basic/physiological

BOTTOM (first)

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14
Q

Tuckman’s four stages through which groups proceed

A
  1. Forming
  2. Storming
  3. Norming
  4. Performing
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15
Q

The Harvard ‘Four C’s’ model of HRM

A
  1. Commitment

2, Competence

3, congruence

  1. Cost-effectiveness
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16
Q

Four Ps for marketing mix

A

Product

Price

Promotion (SAPP)

Place

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17
Q

4 elements of procurement mix

A

Quantity

Quality

Price

‘Lead time’

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18
Q

Main 5 types of business structure

A
  • Simple structure
  • Machine bureaucracy/ functional structure
  • Divisionalised
  • Adhocracy/innovative
  • Matrix structure
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19
Q

Characteristics of bureaucracy (SHIP RUST)

A

Specialisation

Hierarchy of roles

Impersonal nature

Professional nature of employment

Rationality

Uniformity

Stability

Technical competence

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20
Q

Herzberg’s 5 motivating factors

What are hygiene factors?

A

A sense of achievement

Advancement

Responsibility over subordinates

Recognition

Challenging work

Hygiene factors are concerned with the context of the job rather than its content. If absent they will demotivate.

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21
Q

Mintzberg’s 5 Ps of strategy

A

Plan

Ploy

Pattern

Position

Perspective

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22
Q

Four key stages of the rational planning model (SSSR)

A

Strategic analysis

Strategic choice

Strategy implementation

Review and control

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23
Q

5 steps of the emergent approach business strategy

A
  1. External analysis (of the environment)
  2. Internal analysis (of the business)
  3. Corporate appraisal
  4. Mission, goals and objectives
  5. Gap analysis
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24
Q

3 stages of Strategic choice

A
  1. Strategic options generation
  2. Strategic options evaluation
  3. Strategy selection
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25
Q

How to evaluate environmental uncertainty in business strategy

A

Four S’s to describe a static environment

Four D’s to describe a dynamic environment

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26
Q

Four S’s to describe a static environment

A

Static

Single

simple

Safe

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27
Q

Four D’s to describe a dynamic environment

A

Dynamic

Diverse

Difficult

Dangerous

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28
Q

Analysing the general environment (PESTEL)

A

Political factors

Economic factors

Social/demographic factors

Technological factors

Environment/ecological factors

Legal factors

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29
Q

Porter’s five forces for analysing the competitive (task) environment

A

Industry competitors

Potential entrants

Customers

Substitutes

Suppliers

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30
Q

Kotler’s four kinds of competitors

A

Brand competitors - similar firms with similar products

Industry competitors - similar products but differences eg geography

Generic competitors - competing for the same disposable income

Form competitors - different products satisfying the same need

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31
Q

Kotler’s four response profiles to competitors

A

Laid back

Tiger

Selective

Stochastic

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32
Q

BCG matrix for planning products and markets (key)

A

Market share / market growth

High / high: stars - build

Low / high: question marks - harvest or build

Low / high: cash cows - hold or harvest

Low / low: Dogs - divest or hold

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33
Q

SWOT analysis

A

From internal analysis: internal appraisal of the businesses’ STRENGHTS and WEAKNESSES

From external analysis: external appraisal of the OPPORTUNITIES and THREATS faced

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34
Q

Mendelow’s mapping stakeholders

A

Level of interest vs Power held

A: Low/low - minimal effort

B: high/low - keep informed

C: low / high - keep satisfied

D: high/high - key players

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35
Q

Porter’s three generic competitive strategies

A

Cost leadership

Differentiation

Focus (cost focus or differentiation focus)

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36
Q

Ansoff’s matrix for product/ market strategies

A

Product vs market

Existing/existing: market penetration

New/existing: product development

Existing/new: market development

New/new: diversification

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37
Q

4 elements matrix of risk response and control

A

Impact vs probability

Low/low: Acceptance

High/low: Sharing

High/low: Reduction

High/high: Avoidance

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38
Q

A long-term disaster recovery plan will typically provide what three things?

A

Standby procedures

recovery procedures

Personnel management

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39
Q

Three basic legal forms of business

A

Sole trader

Partnership

Company

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40
Q

Qualities of good financial information (ACCURATE)

A

Accurate

Complete

Cost-beneficial

User-targeted

Relevant

Authoritative

Timely

Easy to use

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41
Q

4 Characteristics of big data (4 Vs)

A

Volume

Velocity

Variety

Veracity

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42
Q

Information processing: criteria for effectiveness (CATIVA)

A

Completeness

Accuracy

Timeliness

Inalterability

Verifiability

Assessibility

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43
Q

Qualities of a secure information system: ACIANA

A

Availability

Confidentiality

Integrity

Authenticity

Non-repudiation

Authorisation

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44
Q

The four tasks of the finance function

A

Recording financial transactions

Management accounting

Financial reporting

Treasury management

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45
Q

Triple bottom line is used to measure which three areas (SEE)

A

Social

Environmental

Economic

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46
Q

The Task Force on Climate-related Financial Disclosures (TFCD) recommends what 4 areas of disclosure? (GSRM) think broad business

A

Governance

Strategy

Risk management

Metrics and targets

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47
Q

3 Es used to measure resource use in NFPs

A

Effectiveness

Economy

Efficiency

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48
Q

4 perspectives (focusses) of the balanced scorecard for measuring strategic objectives (CIIF)

A
  1. Customer
    1. Internal business processes
    2. Innovation and learning
  2. Financial
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49
Q

5 types of bank clearing system

A
  1. General clearing - 3-4 days
    1. Electronic Funds Transfer (EFT)
    2. Banks Automated Clearing System (BACS) - same day
    3. Clearing House Automated Payment System (CHAPS) (items >10k) - same day
  2. Society for Worldwide Interbank Financial Telecommunication (SWIFT)
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50
Q

4 parts of professional accountants’ role of maintaining and safeguarding assets

A
  1. Recording of transactions
    1. Business’ internal controls are sufficient
    2. Audit committee is properly constituted and has the information and resource that it needs to fulfil its objectives
    3. The business has non-executive directors who are adequately qualified and resourced do that they can fulfil their role
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51
Q

4 reserved areas of practice

A
  1. Statutory audit
    1. Investment business
    2. Insolvency
    3. Probate
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52
Q

Regulation of professions should NOT (4)

A
  1. Protect vested interests from competition
    1. Be for personal gain or to satisfy prudent interest
    2. Be disproportionate to the benefit gained
    3. Distort competition
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53
Q

Three main roles of the Professional Oversight team, a part of the FRC

A
  1. Independent oversight
    1. Statutory oversight of the supervision of the auditing profession
    2. Statutory monitoring of the quality of the auditing
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54
Q

3 steps of the complaints and disciplinary procedure of the ICAEW

A
  1. Independent oversight
    1. Statutory oversight of the supervision of the auditing profession
    2. Statutory monitoring of the quality of the auditing
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55
Q

4 broad perspectives on what the objectives of corporate governance should be

A
  1. Corporate: to maximise wealth of shareholders
    1. Public policy: objectives of shareholders plus interests of stakeholders plus publics’ interests
    2. Stakeholder: efficient use of resources, accountability to shareholders, align interests of shareholders and stakeholders
    3. Stewardship: act in the best interests of the company
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56
Q

5 key elements which support the drive toward good corporate governance

A
  1. The board of directors - executive, non-executive and committees of the board of directors as a whole
    1. Senior management - be of high quality and be able to: enact the boards’ decisions and whistle-blow
    2. Shareholders being proactive
    3. External auditors, working for shareholders independently
    4. Internal auditors, independent of directors
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57
Q

5 main principles for companies according to the Corpoate Governance Code 2018 (BLAIR)

A
  1. Board effectiveness
    1. Leadership
    2. Accountability/Audit
    3. Investor relationships
    4. Remuneration
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58
Q

2 alternative structures for the board of directors

A
  1. A unitary board, responsible for both management and reporting to the shareholders
  2. Dual or supervisory board, split between management board and supervisory board
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59
Q

The Governance Code requires that directors confirm in the annual report what 3 things?

A
  1. They have carried out a robust assessment of the principal risks and how to deal
    1. How they have assessed future prospects
    2. Whether they have a reasonable expectation the company will continue to operate and meet liabilities
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60
Q

5 components of effective internal control according to COSO (CRCIM)

A
  1. Control environment
    1. Risk assessment
    2. Control activities
    3. Information and communication
    4. Monitoring activities
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61
Q

7 principles of the stewardship code

A
  1. Publicly disclose policy on how they will discharge stewardship responsibilities
    1. Have a robust policy on managing conflicts of interest in relation to stewardship, and this policy should be publicly disclosed
    2. Monitor their investee companies
    3. Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value
    4. Be willing to act collectively with other investors where appropriate
    5. Have a clear policy on voting and disclosure of voting activity
    6. Report periodically on their stewardship and voting activities
62
Q

As well as giving opinion on financial performance, external auditors of listed companies also have to report on the (2)

A

Directors remuneration report

Company’s compliance with the UK Corporate Governance Code

63
Q

5 Nolan Principles useful starting point for ethical business value

A
  1. Integrity
    1. Objectivity
    2. Accountability
    3. Openness
    4. Honesty
64
Q

5 business values according to the Institute of Business Ethics (FaRTTT)

A
  1. Fairness
    1. Responsibility
    2. Trust
    3. Transparency
  2. Truth
65
Q

5 attributes and behaviour of ethical leaders (CHOAF)

A
  1. Openness
  2. Courage
  3. Fair mindedness
  4. Ability to listen
  5. Honesty
66
Q

2 key sustainability goals from the UN Global Impact

A

Provide decent work and economic growth

Industry, innovation and infrastructure

67
Q

What is a Giffen good and what is it’s PED

A

A basic good, increase in demand as their prince increases

68
Q

What is a Veblen good and what is it’s PED

A

Designer goods and stuff that’s more attractive when more expensive

69
Q

4 basic factors of production

A

Land

Labour

Capital

Entrepreneurship

70
Q

6 factors effecting consumer consumption

A
  1. Disposable income and MPC
    1. Distribution of wealth
    2. Government policy
    3. New products
    4. Interest rates
    5. Price expectations
71
Q

Two main causes of demand pull inflation

A
  1. Fiscal - caused by government action

2. Credit - levels of credit extended to consumers increased

72
Q

SMART target parts (careful)

A

Specific, measurable, achievable, relevant, time bound

73
Q

What is transferred in delagtion

A

Responsibility and authority (can be some power)

74
Q

Quinn’s types of business culture

A

Flexible/ inward looking = human relations culture

Flexible / outward looking - open systems culture

Control / inward looking = internal process culture

Control / outward looking - rational goal culture

75
Q

Push vs pull promotion

A

Push promotion uses intermediary channel members to push the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. Pull promotion is addressed to to consumers to encourage them to demand the goods

76
Q

Mintzbergs 6 building blocks of an organisation

A

Strategic apex

Middle line

Operating core

Technostructure

Support staff

Ideology

77
Q

Mechanistic vs organic businesses, (Burns and Stalker)

A

Mechanistic - stable, efficient and suited for slow-moving environments

Organic - flexible adaptive and dynamic

78
Q

Johnson and Scholes tests for strategies

A

Acceptability

Suitability

feasibility

79
Q

4 stages of product life cycle

A

Introduction, growth, maturity, decline

80
Q

Primary vs support activities

A

Primary activities are directly related to production, operations, sales, marketing, delivery and service

81
Q

Business plan vs strategic plan vs operation plan

A

A business plan sets out the markets to be served, how they will be served and the finance required. A stratefic plan sets out the business overall objectives and how to achieve them. An operation plan specifies what is epected of each function in a business.

82
Q

What is gross risk

A

Gross risk is a function of the loss or impact and its probability, before any control measures are implemented

83
Q

Sequence of responding to risk

A

Sequence of responding to risk: avoidance, reduction, sharing (or transfer), acceptance

84
Q

Risk classifications

A

Business risk

VS

Non-business risk:
financial and operational risk

85
Q

4 features of resilient organisations

A

Diversified resources and assets to adapt to change

Strong relationships and networks

Ability to respond to crises

Ability to review and adapt on experience

86
Q

SD vs variance vs coefficient of variation (key)

A

SD - average distance from the mean

Variance - SD squared

Coefficient of variation - SD / mean

87
Q

What is a critical success factor (CSF)

A

Product features that are particularly valued by a group of customers and therefore the organisation must excel in to outperform the competition

88
Q

3 parts of global reporting initiative

A

Economic, environmental, social

89
Q

Four types of finance

A

The four types of finance: immediate to pay wages and day to day expenses,

short to pay for goods/services bought on credit

, medium to pay for inventory and receivables as business grows and to pay tax;

long to pay for non-current assets

90
Q

Money market vs capital market

A

Money market - general name for all markets where securities etc are traded

Capital market - source of finance for businesses and exit route for investors

91
Q

What are the Wates principles - a voluntary code for large private companies (BDROPS)

A

Board composition

Director responsibilities

Remuneration

Opportunity and risk

Purpose and leadership

Stakeholder relationships and engagement

92
Q

3 basic elements of a financial system (there may be others)

A

intermediaries, securities and markets

93
Q

The core aspects of the South Africa King report (GLS)

A

Good corporate citizenship

Leadership

Sustainability

94
Q

What is the requirement for non-executive directors to be independent

A

They can have worked for the company as long as it finished 5 years ago

95
Q

How many directors are required in the audit committee (independent and non-executive)

A

3 for normal, 2 for small

There must be one who has relevant and recent financial experience

THE ONLY type of directors permitted are independent NE directors

96
Q

Share of non-executive independent directors that need to be on a board

A

if on FTSE 350: at least 50% must be NE independent directors

If not: minimum is two

97
Q

Who appoints the directors

A

Appointed by the board and elected by the shareholders at the next AGM and face re-election every year

98
Q

What XED do complementary products have

A

negative

99
Q

When is QE used

A

When interest rates are low and liquidity is low

100
Q

4 ways businesses respond to regulation

A

Non-response

Mere compliance

Full compliance

Innovation

101
Q

Punishment for collusion

A

Up to 10% worldwide revenue fine

102
Q

Purpose of anti-monopoly legislation vs market regulation

A

Anti-monopoly llegislation promotes competition(looking forward), market regulation compensated for a lack thereof

103
Q

What is exploratory data analysis

A

Data that aims to identify relationships between different variables

104
Q

5 Cyber essentials list from the UK government

A

Malware protection

Secure configuration

access controls

Internet gateways

Patch management software

105
Q

4 types of orientation

A

Marketing orientation (customer needs focus)

Sales orientation (sell)

Production orientation (make as much as possible)

Product orientation (falls in love with the product)

106
Q

Scale of risk for a business depends on four key concepts

A

Exposure

Volatility

Impact

Probability

(gross risk = probability x impact)

107
Q

What is the liability of a limited company

A

The shareholders have limited liability but hte company has unlimited liability for its own unpaid debts

108
Q

What’s the name of big data supplied by a third party company

A

Compiled big data

109
Q

What 3 things are covered by the complaints and disciplinary procedure of the ICAEW professional standards department

A

Breach of regulation

Departure from guidance

Bringing ICAEW into disrepute

110
Q

What two things does faithful representation require?

A

Accurate and complete

111
Q

According to principles of corporate governance, companies must protect and facilitate which two of the following shareholder rights?

A

The right to have secure methods of ownership registration.

The right to elect and remove members of the board.

112
Q

In a dual board structure, the supervisory board is elected by who?

A

Shareholders and employees

113
Q

The non-executive directors in a plc have a prime role in

A

determining appropriate levels of remuneration for executive directors

114
Q

Can a person be a chairman and director at the same time

A

No they should not

115
Q

If there are a few companies, what type of market is it?

A

Oligopoly

monopolistic competition has many

116
Q

The Competition Commission/Competition and Markets Authority only has authority to look at which 2 issues?

A

Competition and regulation

117
Q

Requirements of a plc nomination committee

A

Membership of a plc nomination committee must consist of OVER 50% independent NE directors

118
Q

Can a person be a chairman of more than once company at the same time?

A

They can if they show they have the available time

119
Q

When is a director appointed, elected

A

Appointed by the board

Elected by shareholders at the next AGM

Re-elected every year

120
Q

What is an expansion of demand/supply

A

A movement along the curve

121
Q

PED formula

A

(Change in QD/original QD) / (change in P/original P)

122
Q

Key chapters of the Competition Agreement 1998

A

Chapter 1: Anti-competitive agreements

Chapter 2: Abuse of a dominant position

123
Q

What tools are used in monetary policy

A

Exchange rates and interest rates

124
Q

What is the name of the UK government body responsible for promoting effective
competition and conducting inquiries into markets and industries?

A

Competition & Markets Authority

125
Q

What is covered by the Code of Market Conduct?

A

Insider dealing

126
Q

In order to obtain a full listing on the London Stock Exchange the company must have
traded for a minimum of

A

3 years

127
Q

What is the ICAEW complaints and disciplinary procedure (3)

A

Conciliation

Investigation by the IC

Disciplinary proceedings by the DC:

  1. consider complaint, ask questions
  2. gather evidence
  3. decide what to do next
  4. reached a decision and disciplines if appropriate
128
Q

The accounting principle that states a company should recognise losses as soon as they are
known is:

A

The prudence principle states a company should use only recognise profits once they are certain but
should recognise losses as soon as they are known.

129
Q

What is the definition of integrity?

A

Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

130
Q

The Financial Reporting Council’s UK Corporate Governance Code forms part of the

A

UK Listing Authority’s rules

131
Q

The major purpose of the International Accounting Standards Board (IASB) is to ensure consistency
in?

A

Corporate reporting

132
Q

In a limited company, is there perpetual succession? Are they private?

A

In a limited company, there is perpetual succession. Financial statements cannot remain private, they must be filed

133
Q

Which of the following has a separate legal identity?

Strategic alliance or registered company

A

A strategic alliance does not have its own identity. A registered company is a separate legal identity.

134
Q

What type of analysis is analysis of distinctive competencies?

A

Internal analysis

135
Q

Define risk exposure

A

Risk exposure is simply the measure of the way a business is faced by risks

136
Q

What does increased automation due to a company’s financial risk?

A

Increased automation increases the company’s financial risk as they increase fixed overheads and thus liquidity risk

137
Q

What type of risk is failure of a supplier?

A

Event risk so operational risk so non-business risk

138
Q

What type of reporting is financial reporting?

A

Financial reporting is external reporting as it is intended for an external audience

139
Q

Define economy as an objective

A

Economy is the success of the team or work group in controlling its costs

140
Q

Which section looks after foreign exchange management?

A

Foreign exchange management is part of the treasury management section

141
Q

What is the purpose of tactical information?

A

Tactical information help staff deal with short-term issues and opportunities

142
Q

What assertions (type thing) does range checks help with

A

Range helps with accuracy but not completeness

143
Q

What type of offering cannot be used to obtain a new stock exchange listing?

A

A rights issue cannot be used to obtain a new stock exchange listing.

144
Q

Define a letter of credit

A

A letter of credit is a document issued by a bank on behalf of a customer, authorising a person to draw money to a specified amount from its branches of correspondents, usually in another country, when the conditions set out in the document have been met

145
Q

Where can a bond issued a year ago be sold?

A

A bond that was issued in the last year can be sold in a capital market and a secondary market

146
Q

What makes a defensive approach

A

If the company is not relying on current liabilities to finance current assets, this is a defensive approach

147
Q

Define accountancy profession

A

The definition of the accountancy profession is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision markers make resource allocation decisions

148
Q

Who appoints the external auditors

A

The shareholders

149
Q

Can a person hold both chief executive and chairman?

A

The job of chief exec and chair should not be held concurrently and the chief exec should not go on to chair.

150
Q

Can anti-monopoly enforcement aid innovation

A

Anti-monopoly enforcement is a deterrence, it has little innovation effect

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