Organisational Structure, Culture, Governance and Sustainability Flashcards
1.The Formal and Informal Business Organisation 2. Business Organisational Structure 3. Organisational Culture 4. Governance in Business Organisations 5. Sustainable Business Practices
Where does culture originate from?
- from the founder
- from the firms history
- from the management style/ leadership
- from the environmnet
Define culture as per Mullin.
a collection of traditions, values and attitudes that give meaning to what we do in the firm.
What are the levels in Shein’s theory of culture?
1st level: observable, expressed (attitudes and behavior)
2nd level: values and beliefs (what is important)
3rd level: assumptions and fundamental ideas (the heart)
How did Handy link Culture to Structure?
- power culture (entrepreneurial)
- role culture (functional)
- task culture (matrix)
- person culture (talent)
What are the dimensions of culture across different nations according to Holstede?
- power distance (who is calling the shots)
- individualism (“I” or “we”)
- masculinity (assertiveness)
- uncertain avoidance (risk tolerance)
- long-term orientation (respect history/ tradition)
What are the types of committees?
- Executive directors
- Remunerations (non exec)
- Audit (non exec)
- Nominations (non exec)
- Health and safety
- social
- Steering group
*standing committee: on an ongoing basis
What roles do we find in a committee?
- Chairman–> running it, ensures outcome, “face”
- Secretary–> admin, chairman’s right hand, sets meetings, takes minutes, agrees agenda
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
First level
True or False
A task type of culture is slow to change, more formal, less personal and rather bureaucratic.
False
A role type is.
When we refer to the “agency gap” theory, what are we talking about?
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.
True or False
It is a legal requirement for PLCs to comply with the governance code.
False
It is NOT a legal requirement.
What is Corporate Governance?
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.
What is Corporate Social Responsibility?
The way we look after our stakeholders (includes shareholders).
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.
False
The roles should be separated to ensure that no one individual has too much power within the company.
What are the characteristics of a Non Executive Director?
-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
What are the 4 different strategies a company may adopt in relation to CSR?
- Proactive (recalls products without waiting for an issue to arise)
- Reactive (only deals with issues once it’s affected customers)
- Defensive (big disclaimers of responsibility for faults - not its problem)
- Accommodation (treats each issue separately and on its own)
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
Only remuneration and audit
What are the characteristics of Financial Accounting?
-deals with the past
-individuals trans
-prep annual accounts
-working capital
-AR & AP
-cash
What are the characteristics of Management Accounting?
-looks at the future
-to enable decision making
-management accounts
-budget/ variances
-plans ahead
The rules for accountants are called..
International Accounting Standards IAS
Name the different financial systems
- Sales invoicing
- Purchase ledger
- Payroll
- Credit Control
- Cash/ Working capital
True or False
Management accounts must comply with the accounting standards but not company law.
False.
they do NOT need to comply with either.
It’s best practice to follow the accounting standards though.
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?
A Qualified report
Fill in the blank
The body that regulates the UK Accounting and Finance profession is called ______
Financial Responsibility Council - Financial Reporting Council
Financial Reporting Council
True or False
The primary role of a public oversight board is to regulate the auditing profession.
True
(ένα board που επιβλέπει γενικά)
What are the types of Internal Control?
SOAP SPAM
Segregation
Organisation
Authorisation
Personnel
Supervisory
Physical
Arithmetic
Management
Describe the role of the internal auditor.
-reports to the audit manager or audit committee
-reviews internal procedures
-makes recommendations and improvements
-do operational audits
Describe the role of the external auditor.
-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)
Examples of IT General Controls.
server locked in a room
IT managing access in systems
virus protection
password resets
program development
Examples of IT Application Controls
input–> processing–> output
not posting journals if DR not equal to CR
credit limits
CC details checked
What are the stages of Money Laundering?
- Placement: disposal of crime proceeds into a legit (cash) business
- Layering: movement of funds from business to business to conceal the origin
- Integration: funds have been cleaned and used to make a legit transaction
What is the Fraud Triangle?
For fraud to take place, we need 3 factors:
1. motivation
2. opportunity
3. rationalisation
What are the 2 forms of fraud?
- Removal of funds/ assets (stealing cash, payroll fraud, teeming and lading, collusion with client and/or suppliers)
- intentional misrepresentation of the financial position of the firm (overvaluation of stock, fake sales, manipulation of depreciation)
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
The Board of Directors
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.
True
Fill in the blank
In order to disclose knowledge or a suspicion of money laundering, you fill a ___ with the National Crime Agency.
Suspicious Activity Report (SAR)
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.
True
True or False
Both financial and management accounting are required by law.
False
