Organisational Structure, Culture, Governance and Sustainability

Question 1

Where does culture originate from?

Answer 1

1. from the founder
2. from the firms history
3. from the management style/ leadership
4. from the environmnet

Question 2

Define culture as per Mullin.

Answer 2

a collection of traditions, values and attitudes that give meaning to what we do in the firm.

Question 3

What are the levels in Shein’s theory of culture?

Answer 3

1st level: observable, expressed (attitudes and behavior)
2nd level: values and beliefs (what is important)
3rd level: assumptions and fundamental ideas (the heart)

Question 4

How did Handy link Culture to Structure?

Answer 4

1. power culture (entrepreneurial)
2. role culture (functional)
3. task culture (matrix)
4. person culture (talent)

Question 5

What are the dimensions of culture across different nations according to Holstede?

Answer 5

1. power distance (who is calling the shots)
2. individualism (“I” or “we”)
3. masculinity (assertiveness)
4. uncertain avoidance (risk tolerance)
5. long-term orientation (respect history/ tradition)

Question 6

What are the types of committees?

Answer 6

1. Executive directors
2. Remunerations (non exec)
3. Audit (non exec)
4. Nominations (non exec)
5. Health and safety
6. social
7. Steering group

*standing committee: on an ongoing basis

Question 7

What roles do we find in a committee?

Answer 7

1. Chairman–> running it, ensures outcome, “face”
2. Secretary–> admin, chairman’s right hand, sets meetings, takes minutes, agrees agenda

Question 8

Fill in the blank

The observable, expressed or explicit elements of culture are to be found on the _____ level of Schein’s theory.

First - Second - Third

Answer 8

First level

Question 9

True or False

A task type of culture is slow to change, more formal, less personal and rather bureaucratic.

Answer 9

False

A role type is.

Question 10

When we refer to the “agency gap” theory, what are we talking about?

Answer 10

The possibility of directors prioritizing their own interests over the company’s interests. To avoid this, their remuneration should be based (partially) on the company’s performance and whether or not it achieve its goals.

Question 11

True or False

It is a legal requirement for PLCs to comply with the governance code.

Answer 11

False

It is NOT a legal requirement.

Question 12

What is Corporate Governance?

Answer 12

It is a set of processes and policies by which a company is directed, administered and controlled. It includes the appropriate role of board of directors and of the auditors of a company.

Question 13

What is Corporate Social Responsibility?

Answer 13

The way we look after our stakeholders (includes shareholders).

Question 14

True or False

According to the UK Corporate Governance Code, the same person can occupy the positions of the Chairman and the CEO at the same time in a company.

Answer 14

False

The roles should be separated to ensure that no one individual has too much power within the company.

Question 15

What are the characteristics of a Non Executive Director?

Answer 15

-not on the payroll but paid by time spent (lack of time)
-acting as an advisor and setting direction
-only attend board meetings
-primary role to provide a balancing influence and play a key role in reducing conflicts of interest between management and shareholders.
-must be independent

Question 16

What are the 4 different strategies a company may adopt in relation to CSR?

Answer 16

1. Proactive (recalls products without waiting for an issue to arise)
2. Reactive (only deals with issues once it’s affected customers)
3. Defensive (big disclaimers of responsibility for faults - not its problem)
4. Accommodation (treats each issue separately and on its own)

Question 17

Select the correct
When there is conflict of interest, what sub-committees should be made up by non exec directors only?
Remuneration - Social Responsibility - Risk - Audit

Answer 17

Only remuneration and audit

Question 18

What are the characteristics of Financial Accounting?

Answer 18

-deals with the past
-individuals trans
-prep annual accounts
-working capital
-AR & AP
-cash

Question 19

What are the characteristics of Management Accounting?

Answer 19

-looks at the future
-to enable decision making
-management accounts
-budget/ variances
-plans ahead

Question 20

The rules for accountants are called..

Answer 20

International Accounting Standards IAS

Question 21

Name the different financial systems

Answer 21

1. Sales invoicing
2. Purchase ledger
3. Payroll
4. Credit Control
5. Cash/ Working capital

Question 22

True or False

Management accounts must comply with the accounting standards but not company law.

Answer 22

False.

they do NOT need to comply with either.
It’s best practice to follow the accounting standards though.

Question 23

When the company’s auditors believe the accounts do NOT show a true and fair view or/and have not been properly prepared in accordance with company legislation, what kind of a report do they submit?

Answer 23

A Qualified report

Question 24

Fill in the blank

The body that regulates the UK Accounting and Finance profession is called ______

Financial Responsibility Council - Financial Reporting Council

Answer 24

Financial Reporting Council

Question 25

True or False

The primary role of a public oversight board is to regulate the auditing profession.

Answer 25

True

(ένα board που επιβλέπει γενικά)

Question 26

What are the types of Internal Control?

SOAP SPAM

Answer 26

Segregation
Organisation
Authorisation
Personnel

Supervisory
Physical
Arithmetic
Management

Question 27

Describe the role of the internal auditor.

Answer 27

-reports to the audit manager or audit committee
-reviews internal procedures
-makes recommendations and improvements
-do operational audits

Question 28

Describe the role of the external auditor.

Answer 28

-appointed by shareholders
-report to shareholders
-do compliance test to ensure accuracy of internal control (if internal audits can be used to save time and reduce the number of substantive testing)
-do substantive testing to identify errors
-give opinion on F/S (true and fair)

Question 29

Examples of IT General Controls.

Answer 29

server locked in a room
IT managing access in systems
virus protection
password resets
program development

Question 30

Examples of IT Application Controls

Answer 30

input–> processing–> output

not posting journals if DR not equal to CR
credit limits
CC details checked

Question 31

What are the stages of Money Laundering?

Answer 31

1. Placement: disposal of crime proceeds into a legit (cash) business
2. Layering: movement of funds from business to business to conceal the origin
3. Integration: funds have been cleaned and used to make a legit transaction

Question 32

What is the Fraud Triangle?

Answer 32

For fraud to take place, we need 3 factors:
1. motivation
2. opportunity
3. rationalisation

Question 33

What are the 2 forms of fraud?

Answer 33

1. Removal of funds/ assets (stealing cash, payroll fraud, teeming and lading, collusion with client and/or suppliers)
2. intentional misrepresentation of the financial position of the firm (overvaluation of stock, fake sales, manipulation of depreciation)

Question 34

Fill in the blank

The primary responsibility for preventing and detecting fraud lies with ______
1. The internal auditors
2. The FD
3. The Board of Directors

Answer 34

The Board of Directors

Question 35

True of False

Teeming and lading is a sales ledger fraud that involves cash or cheque receipts being stolen, with the theft being concealed by allocating subsequent receipts against the debt.

Answer 35

True

Question 36

Fill in the blank

In order to disclose knowledge or a suspicion of money laundering, you fill a ___ with the National Crime Agency.

Answer 36

Suspicious Activity Report (SAR)

Question 37

True or False

The IASB aims to promote consistency in corporate reporting by creating financial reporting standards to which major businesses are expected to adhere.

Answer 37

True

Question 38

True or False

Both financial and management accounting are required by law.

Answer 38

False