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AAT Level 3 > Business Awareness > Flashcards

Business Awareness Flashcards

1
Q

Classification of Organisations: Trading Organisation

A

Businesses that trade to make a profit

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2
Q

Classification of Organisations: Charitable/Non-Profit

A

Business that raises money for a good cause

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3
Q

Classification of Organisations: Service Organisation

A

Business that provides an intangible service

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4
Q

Classification of Organisations: Manufacturing Organisation

A

Business that provides a tangible product

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5
Q

Key Characteristics of Services: Inseparability

A

Service is provided & consumed at the same time variability

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6
Q

Key Characteristics of Services: Variability

A

Service is tailored to you

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7
Q

Key Characteristics of Services: Perishability

A

Cannot be stored for later use

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8
Q

Key Characteristics of Services

A

Intangibility, Inseparability, Variability, Perishability, No Transfer Of Ownership

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9
Q

The Entity Concept

A

If a business is classed as a separate entity it will have the right to own its assets and is only partly liable for its debts.
ONLY BUSINESSES WITH LIMITED LIABILITY.
They are protected by the veil of incorporation.

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10
Q

Organisational Structures

A

Functional
Divisional
Matrix
Entrepreneurial

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11
Q

Organisational Structures: Functional

A

Split by departments

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12
Q

Organisational Structures: Divisional

A

Split by product / location (geographical)

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13
Q

Organisational Structures: Matrix

A

Mixed - Project Management / Cross Functional

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14
Q

Organisational Structures: Entrepreneurial

A

Small owner run businesses

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15
Q

Span of Control

A

Number of staff

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16
Q

Scalar Chain

A

Steps between lowest and highest in organisation

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17
Q

Corporate Governance

A

The system by which companies are directed and controlled

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18
Q

Corporate Governance Code

A

Risk Reduction, Improved Performance, Better Company Perception

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19
Q

Centralised Organisation

A

All power and decisions are at head office

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20
Q

Decentralised Organisation

A

The power is delegated to divisional heads

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21
Q

Levels of Management

A

Strategic
Managerial
Operational

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22
Q

Levels of Management: Strategic

A

To set the strategy

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23
Q

Levels of Management: Managerial

A

To convert strategy into actions and report back

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24
Q

Levels of Management: Operational

A

Where the work is done

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25
Q

Risk

A

The possibility that outcomes will be different to what is expected

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26
Q

Uncertainty

A

The inability to predict due to lack of information about inputs or the environment

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27
Q

Macro Environment

A

Impacts the whole economy (every business)

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28
Q

Fiscal Policy

A

Government spending and tax policies to influence levels of demand.
When? Government Budget
How? Reduce tax to increase spending
Impact? Increase consumer spending - More jobs created - More tax

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29
Q

PESTLE

A

Political
Economic
Social
Technological
Legal
Environmental

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30
Q

Micro Environment

A

The market of all the buyers & sellers of a good or service

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31
Q

Factors Impacting Demand

A

Price
Substitutes & Compliments (Products that go together)
Type of good - Normal / Inferior / Luxury
Fashions

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32
Q

Demand Curve

A

I *
I *
I *
I *
I_______________

33
Q

Supply Curve

A

I *
I *
I *
I *
I_______________

34
Q

Extension

A

Demand goes up as price goes down

35
Q

Contraction

A

Demand goes down as price goes up

36
Q

Factors Impacting Supply

A

Price
Price of alternative
Cost of making
Technology Changes
Tax

37
Q

Equilibrium Price

A

Where the volume demanded and supplied is the same

38
Q

Professional Ethics

A

The moral principles or standards that govern the conduct of the members of an organisation

39
Q

Advantages of Principles

A

Flexible
Avoids people finding loopholes

40
Q

Advantages of Rules

A

Certainty
No subjective interpretation

41
Q

Fundamental Principles

A

Professional behaviour
Professional competence & due care
Confidentiality
Integrity
Objectivity

42
Q

Fundamental Principles: Professional Behaviour

A

Not bringing the profession into disrepute
Breaking law / rules

43
Q

Fundamental Principles: Professional Competence & Due Care

A

Knowledge
Skills
Experience
Time
Resources

44
Q

Fundamental Principles: Confidentiality

A

Don’t share private information
EXEMPTIONS:
Required to by law
Have permission from the client
In public interest / professional duty

45
Q

Fundamental Principles: Integrity

A

Honesty

46
Q

Fundamental Principles: Objectivity

A

Avoid conflicts of interest
Independent of mind & Independent in appearance
Unbiased

47
Q

Threats To Fundamental Principles

A

Self Review
Self Interest
Intimidation
Advocacy
Familiarity

48
Q

Threats To Fundamental Principles: Self Review

A

Checking your own work

49
Q

Threats To Fundamental Principles: Self Interest

A

Taking bribes
Bribery Act 2010
10 Years in prison & unlimited fine

50
Q

Threats To Fundamental Principles: Intimidation

A

Actual or perceived threats

51
Q

Threats To Fundamental Principles: Advocacy

A

Over promoting
Promoting something you have no expertise in

52
Q

Threats To Fundamental Principles: Familiarity

A

Close relationships

53
Q

Safeguards

A

Apply safeguards to eliminate threats or reduce them to an acceptable level
Apply them when threats are at a level where fundamental principles are compromised
CPD / Training / Using Policies & Procedures

54
Q

What if you find an error?

A

Inform the client of the error
If they refuse to correct - Leave
Contact HMRC to say you have ceased acting for client due to concerns

55
Q

Resolving Ethical Dilemmas

A

Check the facts
Identify fundamental principles that are threatened
Refer to policies & procedures
Seek advice - Contact AAT, speak to senior colleague
Implement safeguards - Quit job, don’t be associated with client

56
Q

Disciplinary Process & Outcomes

A

Disciplinary Investigation
Decision & Recommendation
Members Response
Disciplinary Tribunal

57
Q

Professional Scepticism

A

An attitude that includes a questioning mind, being alert to errors or fraud & critical assessment of evidence

58
Q

Money Laundering

A

The process where proceeds of crime change ownership to appear to come from a legit source

59
Q

Money Laundering Offences

A

Principle Money Laundering Offence
Failing to report suspected money laundering
Tipping off about money laundering

60
Q

Sustainability

A

Meeting the needs of the present without compromising the ability of future generations to meet their own needs
“The ability to last”

61
Q

Reporting Money Laundering Offences

A

Practice / Protected Company - Money Laundering Reporting Officer
Other Businesses - National Crime Agency

Complete a Suspicious Activity Report
1. Why you suspect
2. Who you suspect
3. Where the money is now

Protected Disclosure - Accountant
Authorised Disclosure - The Money Launderer (Usually someone who has made a mistake)

62
Q

Triple Bottom Line

A

Planet - Environmental Protection
Profit - Economic Growth
People - Social Equality

63
Q

Good Quality Information is ACCURATE

A

Accurate
Complete
Cost Effective
Understandable
Relevant
Accessible
Timely
Easy To Use

64
Q

Blockchain

A

Stores transactional records (the block) of the public in several databases (the chain) in a network connected through peer to peer nodes.
Every transaction is authorised by the owner.
Anyone can see it but cannot be corrupted.

65
Q

How does AI Impact Finance?

A

Forecasting
Detecting Fraud

66
Q

Big Data

A

Large volumes of data captured from various sources that is analysed to predict trends.
System learns what you look at (cookies)

67
Q

Data Analytics

A

Collection, management & analysis of large data sets

68
Q

Characteristics of Big Data (5 V’s)

A

Volume
Value
Variety
Velocity
Veracity (Trustworthy)

69
Q

Public Cloud

A

Everyone is able to buy a part (iCloud)

70
Q

Private Cloud

A

Private network for a limited number of people (in an organisation)

71
Q

Data Processor

A

People who use data

72
Q

Data Subjects

A

Individuals that the data is about

73
Q

Data Controllers

A

The business

74
Q

Data Protection Rules

A

Fairly, transparently & lawfully processed
Processed for limited purposes
Data minimisation
Accurate
Storage limitation
Integrity & confidentiality
Accountability

75
Q

Data Protection Prosecution

A

£18m fine or 4% of global turnover
72 hours to report a breach to the Information Commissioners Office

76
Q

Cyber Security

A

Access Controls - Passwords, Physical Controls
Boundary Firewalls
Malware Protection
Patch Management - Security Updates, Encryption

77
Q

Communicating Appropriately

A

Appropriate format - Email, Call, etc
Format - House Style
Present Professionally
Technically Correct
Understandable To Target Audience
Project The Corporate Image
Achieving Its Purpose

78
Q

Data Visualisation

A

Using tables, graphs, charts
ADV - Easy to understand, can spot patterns, good for comparison

AAT Level 3 (2 decks)

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