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ICAEW ACA Business, Technology & Finance > BTF > Flashcards

BTF Flashcards

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1
Q

What are the five rights of procurement?

A

Right quality, quantity, price, place, time

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2
Q

Who are upstream supply members?

A

those who provide the materials and production of goods and services

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3
Q

Who are downstream supply members?

A

Those involved after the product has been manufactured e.g. marketing and customers

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4
Q

Hard approach to human resource management

A

Maximise employee effectiveness and control staff cost

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5
Q

Soft approach to HRM

A

Emphasises human element, concerned with employee relations

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6
Q

The four Cs model of HRM

A

Commitment, competence, congruence, cost-effectiveness

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7
Q

Organisational iceberg: over the waterline (overt)

A 
Customers 
Technology 
Facilities 
Organisational design 
Rules and regulations 
Surface competencies/skills
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8
Q

Organisational iceberg: below the waterline (covert = covered)

A 
Attitudes 
Communication patterns 
Informal processes 
Personality 
Conflict 
Politics 
Underlying competencies/skills
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9
Q

McGregor’s model: Theory X

A

Individuals dislike work
Individuals lack ambition, dislike responsibility and prefer to be led
System of coercion, control and punishment
Individual desires security

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10
Q

McGregor’s model: Theory Y

A

Commitment is driven by rewards
Self-actualisation is important
Self control and direction are important
Y managers are more nurturing

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11
Q

Maslow’s hierarchy of needs

A 
Self actualisation 
Status/ego
Social 
Safety/security 
Basic/physiological
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12
Q

Stages of group development

A

Forming
Storming
Norming
Performing

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13
Q

Team roles

A

Leader
Shaper - aggressive and challenging, promotes activity
Plant - thoughtful and thought provoking
Evaluator - analytically criticises others’ ideas
Resource investigator - picks up on others’ ideas and adds to them, social
Company worker - general ideas into specifics, practical and efficient, handles scheduling
Team worker - concerned with team relationships
Finished - unpopular, ensuring timetables are met

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14
Q

Likert four basic leadership styles

A

Exploitative authoritative
Benevolent authoritative
Consultative
Participative

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15
Q

What are the six building blocks?

A 
Operating core
Middle line 
Strategic apex 
Support staff 
Technostructure 
Ideology
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16
Q

Types of organisational structure

A 
Simple structure - strategic apex
Machine bureaucracy - technostructure 
Professional bureaucracy - operating core
Divisionalised - Middle line 
Innovative/adhocracy - operating core
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17
Q

Mechanistic businesses or bureaucracies

A

Stable, efficient and suitable for slow changing operating environments

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18
Q

Organic businesses

A

Flexible, adaptive and suitable for fast changing or dynamic operating environments

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19
Q

Types of strategic external analysis

A

PESTEL
Competitor analysis
Porter’s five forces analysis

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20
Q

Types of strategic internal analysis

A

Porter’s value chain
The product life cycle
BCG matrix
Analysis of distinctive competencies

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21
Q

PESTEL analysis

A 
Political factors 
Economic factors 
Social,demographic factors 
Technological factors
Ecological factors 
Legal factors
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22
Q

Porter’s five forces analysis

A 
Threat of new entrants 
Bargaining power of customers 
Bargaining power of suppliers 
Threat of substitutes 
Rivalry among existing competitors
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23
Q

9 Ms model reviewed in a resource audit

A 
Machinery
Make-up
Management 
Management information 
Markets 
Materials 
Men and women
Methods 
Money
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24
Q

Porter’s value chain - Primary activities

A 
Inbound logistics 
Operations 
Outbound logistics 
Marketing and sales 
Service
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25
Q

Porter’s value chain - Support activities

A

Procurement
Human Resources
Infrastructure
Technology development

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26
Q

The BCG matrix

A

Stars - build (high market share and high growth)
Cash cows - hold or harvest (high share and low growth)
Question marks - build or invest (low share but high growth)
Dogs - divest or hold (low share and low growth)

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27
Q

SAF analysis

A

Suitability
Acceptability
Feasibility

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28
Q

Types of information

A

Planning
Operational - day to day activities
Tactical - short term issues and opportunities (monthly variance reports)
Strategic - long-term decision making

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29
Q

Good information

A 
Accurate
Complete 
Cost-beneficial 
User targeted 
Relevant 
authoritative 
Timely 
Easy to use
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30
Q

Effective information processing

A 
Completeness 
Accuracy 
Timeliness 
Inalterability 
Verifiability 
Accessibility
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31
Q

Secure information

A 
Availability
Confidentiality
Integrity 
Authenticity 
Non-repudiation 
Authorisation
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32
Q

Data validation - ensuring data is not incomplete or unreasonable

A 
Check digits
Control total 
Hash totals 
Range checks 
Limit checks
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33
Q

Fundamental characteristics of financial statements

A

Relevance

Faithful representation

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34
Q

Enhancing characteristics of financial statements

A

Understandability
Comparability
Verifiability
Timeliness

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35
Q

Global Reporting Initiative

Triple bottom line accounting

A

Social
Environmental
Economic

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36
Q

Task force in climate-related financial disclosures

A

International organisation of central banks and regulatory bodies

Recommendations:
Governance 
Strategy 
Risk management 
Metrics and targets
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37
Q

Balanced scorecard

A

Customer
Innovation and learning
Internal business process
Financial

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38
Q

Effective internal control

A 
Control environment 
Risk management 
Control activities 
Information and communication 
Monitoring activities
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39
Q

Debt holders

A

Debt holders rank higher than equity holders to receive their capital back
Lower risk, lower returns

40
Q

Monetary policy committee

A

Selects its base rate in order to meet its inflation target set by the chancellor of the exchequer

41
Q

Financial policy committee

A

Ensure stability by removing systematic risks in the uk financial system

42
Q

Bank/customer fiduciary relationship

A

Bank is expected to act in good faith in its relationship with the customer

43
Q

Money market - short term

A 
Treasury bills 
Deposits 
Certificates of deposits 
Gilts
Bonds 
Commercial paper
44
Q

Capital market - more long term finance

A 
National stock exchange:
Main market and AIM
Banking system 
Bond market 
Leasing 
Debt factoring 
International markets
45
Q

Preference shares

A

Entitled to dividends before ordinary shareholders
Carry less risk
Return is fixed

46
Q

Loan stocks and debentures

A

Fixed interest rate borrowings with set repayment date
Secured on assets
Lenders are protected

47
Q

Trading risk

A

Physical risk - risk of goods being lost or stolen in transit
Credit risk - payment default by the customer
Trade risk - customer refusing to accept goods in delivery or cancellation of order in transit
Liquidity risk - inability to finance the credit given to customers

48
Q

To continue ICAEW membership, professional accountants must…

A

Obey rules and regulations
Pay the annual subscription fee
Continuing professional development

49
Q

ICAEW members engaged in public practice must also….

A

Hold a practising certificate
Implement the code of ethics
Be covered by professional indemnity insurance

50
Q

Reserved areas of accounting practice

A

Statutory audit
Investment
Insolvency
Probate

51
Q

Consultative Committee of Accounting Bodies (CCAB)

A

Has 5 members
A member deon each body sits in the CCAB, where they discuss matters that affect the profession as a whole enabling the profession to speak with a unified voice

52
Q

International Federation of Accountants

A

175 members
Aims is to protect the public interest
Encourages accountants to adhere to the fundamental principles

53
Q

What does the Financial Reporting Council (FRC) conduct division do?

A

Professional oversight - regulation
Professional discipline
Corporate reporting review - make enquiries into departure from requirements for financial statements
Audit quality review

54
Q

What does the Financial Reporting Council (FRC) codes and standards division do?

A

Actuarial policy
Audit and assurance standards
Accounting and reporting policy
Corporate governance code and stewardship code

55
Q

Prudential Regulation Authority And Financial conduct authority

A

Only affects investment firms

FCA advises of listing rules that FTSE 350 companies are required to comply with

56
Q

ICAEW Complaints

A

Breaching regulation
Departing from guidance
Bringing discredit
(Breach bye-laws)

57
Q

ICAEW complaints and disciplinary procedure

A

Conciliation
Investigation
Disciplinary proceedings
Appeal

58
Q

Disciplinary committee

A

Tribunal of 3 people - two chartered accountants and one non-accountant

59
Q

Objectives of corporate governance

A

Public policy perspective
Stakeholder perspective
Corporate perspective - achieve long term sustained value for shareholders
Stewardship perspective - act in the best interest of the company

60
Q

Who are institutional shareholders?

A

Insurance companies
Pension funds
Investment trusts

61
Q

Two tier board consist of…

A

Management board

Supervisory board

62
Q

Ethical values - Nolan Principles

A 
Integrity 
Objectivity 
Accountability 
Openness 
Honesty
63
Q

Institute of Business Ethics

A 
Respect 
Transparency 
Openness
Fairness 
Trust
64
Q

Attributes and behaviours of ethical leaders

A 
Openness 
Courage 
Ability to listen 
Honest 
Fair mindedness
65
Q

What is an ethical audit?

A

A process which measures the internal and external consistency of a company’s value base

66
Q

UK Corporate governance provisions

A

At least half the board should be NEDs
At least 5 years since member was employee
NEDs can remove and appoint executive directors
NEDs should scrutinise and hold to account the performance of management

Full time executive directors should not take on more than one non executive directorship

All directors should be subject to annual re-election

Chair should not remain in post beyond 9 years

67
Q

Audit committee provisions

A

3 independent NEDs
Or 2 in the case of smaller companies
One member to have recent and relevant financial experience

Make recommendations on reappointment and removal of external auditors

68
Q

Remuneration provisions

A

Remuneration committee of at least 3 independent NEDs, or 2 for smaller companies

Chair of the board can only be a member if they were independent on appointment and cannot chair the committee

Remuneration should reflect time commitment and responsibilities of the role

Only basic salary should be pensionable

Notice or contact periods should be one year or less

69
Q

4 factors of production and return

A

Land - rent
Labour - wages
Capital - interest
Entrepreneurship - profit

70
Q

Business/trade cycle

A
  1. Recession - demand, production, employment fall
  2. Depression
  3. Recovery - output, employment and income begin to rise, more investment, demand increase
  4. Boom - capacity and labour will become fully utilised, price increase, level of investment high
71
Q

Monetary policy

A

Government policy on money supply, monetary system, interest rates, exchange rates and credit availability

72
Q

Fiscal policy

A

Government policy on taxation, public borrowing and spending

73
Q

Governments fiscal stance

A

Expansionary = increased borrowing and spending

Contractionary = increased taxation, no increase in spending

Broadly neutral = increased taxation and spending

74
Q

Expanding demand

A

Lowering the price

75
Q

Contracting demand

A

Raising the price

76
Q

Price elasticity of demand

A

Less than 1 - inelastic
Greater than 1 - elastic

Vertical straight line, PED=0 -> perfectly inelastic
Increase in price, Total expenditure rises

Horizontal line, PED=infinity -> perfectly elastic
Increase in price, Total expenditure will fall

77
Q

Income elasticity of demand

A

Greater than 1 = income elastic = luxury goods

Between 0 and 1 = Income inelastic = normal goods

Negative = inferior good

78
Q

Price elasticity of supply

A

Closer to 0, the more inelastic, fixed supply

More elastic, fixed price

79
Q

Perfect competition

A 
Many small buyers and sellers 
No barriers to entry/exit
Perfect information 
Homogeneous products
No collusion between buyers or sellers

Suppliers are price takers - sell at market demanded price
All suppliers only earn normal profits

80
Q

Pure, actual, government franchise and natural monopoly

A

Pure = only one supplier in the market

Actual = one supplier with a dominant market share

Government franchise = pure that has arisen by virtue of government deciding to operate in that way

Natural = market has high levels of fixed costs and low marginal costs

81
Q

Monopolistic competition

A 
Many buyers and sellers 
Some differentiation 
Branding 
Some customer loyalty 
Few barriers to entry 
Significant advertising
82
Q

Oligopoly

A

A few large sellers but many buyers
Product differentiation
Mutual interdependency

83
Q

Allocative efficiency

A

Goods/services produced in optimum quantities

84
Q

Productive efficiency

A

Economy produces its goods and services at the lowest factor cost

85
Q

Public goods display 2 key characteristics

A

Non-excludability

Non-dimishability

86
Q

Factors of market failure

A

Market imperfection
Externalities
The existence of public goods
Economies of scale

87
Q

Business response to regulation

A

Non-response

Mere compliance: met by passing on cost of compliance to clients and consumers

Full compliance: behaviour is changed to comply with regulations

Innovation: behaviour exceeds regulations

88
Q

Competition act 1998

A

Prohibits agreements, business practices and conduct that damage competition

Penalties of up to 10% of annual worldwide revenues

Chapter 1 - collusive behaviour

89
Q

Chapter 2 of competition act

A

Business impose unfair purchase or selling prices

Limiting production

Applying different trading conditions

Attaching supplementary conditions to contracts

Business has more than 40% of market

90
Q

Competition and Markets Authority

A

CMA officials can enter premises and demand relevant documents

CMA impose a fine for failure to comply with interim measure of up to 5% of annual revenue

Competition disqualification orders may be made against the directors

They will look into competition, regulation and market issues

91
Q

Barriers to free international trade

A

Tariffs or custom duties: raise the price paid for the imported goods, supplier is paid the same. Difference is transferred to the government sector

Import quotas: restrictions on quantity
Both domestic and foreign suppliers enjoy a higher price

92
Q

Risk and uncertainty

A

Risk: possible variation in a outcome

Uncertainty: inability to predict the outcome due to lack of information

93
Q

Business risk

A

Strategy risk

Product risk

Enterprise risk

94
Q

Financial risk

A

Liquidity risk: shortage of cash

Gearing risk: risk of high borrowing compared to share capital

Credit risk

Market risk: adverse movement in share price

95
Q

Operational risk

A

Process risk

People risk: retention of staff and their behaviour

Systems risk: data loss etc

Event risk: key event that has material impact

96
Q

Long-term disaster recovery plan

A

Standby procedures

Recovery procedures

Personnel management policies

97
Q

Four metrics to measure business resilience

A

Compliance

Completeness

Value

Capability

ICAEW ACA Business, Technology & Finance (1 decks)

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