Question practice Flashcards
What describes the work of the technostructure of an organisation
Designing systems and standardising work
Materiality is a facet o which characteristic of financial informration
relevance
what was the original role of the finance function
recording financial information
What is described
processing should occur in line with data availability and information needs
timeliness
is accuracy key in relation to information processing in a company’s accounting systems
Yes
is assessability key in relation to information processing in a company’s accounting systems
Yess
is availability key in relation to information processing in a company’s accounting systems
No
Who is responsible for implementing internal controls and their day to day monitoring
Business managers
Who is responsible for policy making, reviewing effectiveness of controls and reporting to shareholders on internal controls
BOD
What are the following two examples of
formal goals and organisational design
Overt variables affecting organisational behaviour
What is market risk
the exposure to potential loss that would result from changes in market prices or rates
What is defined
Economic loss suffered due to the default of a borrower, customer or supplier in the market
Credit risk
What is defined
The risk of choosing the wrong strategy in a particular market
Strategy risk
What is defined
The exposure to potential loss that would result from changes in market prices or rates
Product risk
Information processing must be (CATIVA)
Complete
Accurate
Timely
Inalterable
Verifiable
Assessable
Good information should be ACCURATE
Accurate
Complete
Cost benefit
User targeted
Relevant
Authoritative
Timely
Easy to use
What are the following examples part of
Forecasting what is needed
evaluating available resources
developing objectives plans and tagets
Planning and control
What are the following examples part of
Defining what processes, tech and people are required, allocating and coordinating work, generating effort and commitment in finance staff
organising and leading
How is effectiveness measured
the success in achieving goals and targets
How is efficiency measured
the amount of resources used for the tasks that have been achieved
How is economy measured
by success of team or work group in controlling costs
An offer for sale is a form of
public offer
an offer for subscription is a form of
direct offer
How many years must a company have traded to obtain a full LSE listing
at least three yeras
What is the motive behind holding cash to make sure it covers unexpected liabilities
precautionary motive
What are the personal qualities expected of an accountant RRTCR
reliability
responsibility
timeliness
courtesy and
respect
The body responsible for ensuring that self regulation of the accountancy profession in the UK is effective is the
Professional oversight team of the FRC’s conduct division
The FRCs UK CG code forms part of
the UK listing authorities rules
A complaint bought about a member signing audit certificates when not qualified to do so may be referred by the PSD to
the disciplinary committee
What kind of ethics approach is an approach that combines a concern for the law with emphasis on managerial responsibility
Integrity based
What kind of ethics approach is an approach that is concerned with the law alone
compliance based
Three reserved areas of practice in accounting
statutory audit, investment business and insolvency
T/F
Complaints bought against member firms are usually that they
Have departed from accounting standard
False - guidance
T/F
Complaints bought against member firms are usually that they
Have bought ICAEW, themselves or profession into disrepute
true
T/F
Complaints bought against member firms are usually that they
are in breach of a regulation
True
For a company outside of FTSE 350, what is the minimum number of NEDs on the board
two
For a company inside the FTSE 350, how many NEDs must be on the board
50% excluding the chairman
what is the minimum number of NEDs required on the remuneration committee of a listed company outside FTSE 350
two
The only type of directors on the audit committee of a company within the FTSE 350 are
independent, NEDs
For companies outside the FTSE 350, is the chairman allowed to sit on audit committee
Yes - if considered independent on appointmetn
When can a director of a FTSE 100 company be a chairman of a FTSE 350 compnay
if they can show they have the available time and can show they are able to allocate sufficient time to company to discharge their commitments effectively
What are the following examples of
- monopsony buyer
- monopoly supplier
- slow responsive price mechanism
market imperfections
What does a monopsony buyer do
dominate the market
What does a monopoly supplier do
control the market
what does a slow response price mechanism create
short run inefficiency in resource allocation
a legal minimum price is set to below the equilibrium price - what is the impact of this
nothing
What are the effects of demand full inflation
price rises due to persistent excess of demand over supply in the economy as a whole
What is chapter 2 of the competition act 1998 concerned with
abuse of a dominant position
What is chapter 1 of the competition act 1998 concerned with
anti competitive agreements
What kind of policy is deregulation of industries
supply side policy
What is part of monetary policy
interest rates and exchange rates
what are the main objectives of macroeconomic policy
economic growth
stable inflation
unemployment
balance of payments (between exports and imports)
UK minimum wage legislation is an example of government intervention to address market failure that results in
inequality - intervention to imrpove social justice
PRIMARY objective of non-profit oriented organisation
provision of goods/services
What power is personal power
referent power
what function
situation where a person can give advice and guidance to another
authority arises in giving specialist advice to another manager or department over which you have no line authority
staff function
What is authority
exercise of power for the proper purpose
What is a functional manager
manager has authority in certain areas over another departmnet
What culture
outward looking and high on control
rational goal culture
what culture
inward looking, looking to make internal environment stable and controlled
Internal process culture
What are covert variables
attitudes
underlying competencies and skills
communication patterns
what kind of advertising is TV advertising
pull
What does an organisation chart concentrate on
shape of organisation
What is shown on an organisation chart
Span of control and scalar chain
What is not shown on organisational chart
Degree of decentralisation
What kind of structure is described
hire trained specialists who are all imbued with the skills and values of the profession. The operating core is the key part because it will have an elaborate support staff to service it and the work is too complex to be standardised by technostructure
professional bureaucracy
What kind of structure
characteristic of small young organisations evolving round a single entrepreneur or small management team
Entrepreneurial structure
what kind of structure
works on a sophisticated and well tuned set of rules and procedures. the technostructure is the key part of this structure, there is strong emphasis on the division of labour and authority is hierarchical
Machine bureaucracy
What kind of structure
is where the middle line seeks as much autonomy for itself as possible. it exerts a pull to split into small self managed units with autonomy given to managers lower down the line
divisional structure
What is the function of the technostructure
to standardise work process for example by producing technical specifications and procedure manuals
what structure is this characteristic likely to be an example of
The technostructure exerts a pull towards standardised processes
Machine bureaucracy
Matrix structure
which of the following basic principles of organisational structure is necessarily contravened by this structure
Unity of command
What is likely to b ea problem for wide flat organisational structure
ensuring enough face to face contact takes place between supreriors and staff members
What is an appropriate description of a mechanistic organisation
suitable for slow moving environment
What is a strateci alliance
daily informal cooperation
Joint venture is where
a third party business is set up and owned by the joint ventures
T/F Being a sole trader
prevents you from employing staff
False
T/F Being a sole trader
gives personal liability for any failure
true
T/F Being a sole trader
prevented from obtaining a loan
False
T/F Being a sole trader
allowed to issue shares to friends and families
False
advantages of flat structure
greater opportunity to delegate
advantages of what organisation
narrow span of control
more participation in decision
improved management training
tall
What analytical techniques are useful for internal analyssi
value chain
PESTLE
distinctive competenceies
Three criteria to judge final decision of strategic option for major business unit
Zcceptability test
suitability test
feasibility test
Coefficient of variation =
SD/Mean
Coefficient of variation can be used to compare
Risk - Better than SD as SD related to mean
Featuers of normal distribution
Distribution is continuous distribution
closer range of values is to mean, higher probability of that range of values occuring
Left skewed data order
Mean Median Mode
Risk management what does ALARP stand for
As low as reasonably practicable
What kind of risk
Economic loss due to the default of the customer
Financial risk
What kind of risk
Risk of choosing the wrong strategy
Strategic Risk
What kind of risk
Risk that customers do not buy the company’s products in expected quantities
product risk
What kind of risk
exposure to economic loss due to changes in market prices or rates
Market risk
T/F
A risk seeking attitude means that an investment should not be undertaken if there is an alternative offering higher risk
True
T/F
A risk neutral attitude means an investment should not be undertaken if there is an alternative investment offering a lower return
False
In assessing potential gross risk need to take account of the
potential loss and probability of outcome
Order to respond to reisk
Avoid
reduce
share
accept
What type of risk includes process, people and event risk
operational risk
Liquidity risk is a type of
financial risk
The failure of a participant in the buisness’s supply chain to honour their contractual obligations is classified as a
systematic risk
systematic risk is a type of
event risk
Product risk is a type of
business risk
What risk is exposure to potential loss that results from change in market prices or rates
market risk
is the following a potential problem to successfully building a resilient organisation
directors delegate delivery of resilience policies and procedures to operational managers
Yes
Is the following a potential problem to successfully building a resilient organisation
business functions focus specifically on resilience programmes for their own area
Yes
T/F
Median may not return a value that is the same as an actual value in the data set
True
T/F
The median is hard to identify in large data sets as the values have to be ordered
True
What can be used on qualitative data rather than quantitative
Mode
Centralisation of finance function is least likely to be effective in what
internal reporting to operational managers
tactical information helps staff deal with
short term issues and opportunities
The area outside an information system boundary is known as the
environemtn
data to be same as sources and not have been accidentally or deliberately altered destroyed of disclosed is related to
data integrity
What are the fundamental qualitative characteristics
relevance
faithful representation
What are the enhancing qualitative characteristics
understandability
comparability
verifiability
timeliness
Elements of marketing mis which only apply to services marketing
People
process
physical evidence
Scientific management
what characterise operations of this department
identification of single best way of performing task
effective training in performing tasks
When should stakeholder analysis be carried out
when formulating strategic objectives
Monthly variance reports are an example of
tactical information
Are investment in equities a good use of short term funds
no - least appropriate
Where can bonds be sold
capital market and secondary market
T/F
CCAB has delegated the responsibility for determining eligibility to practice of all accountants to ICAEW
False
T/F
The ICAEW is only responsible for discipline in respect of ICAEW members
True
Core aspects of the King Report
Leadership
sustainability
good corporate citizenship
With natural monopoly
fixed costs will be x
marginal costs will be x
High
Low
What provides barrier to entry in monopolies
economies of scale
T/F
The use of advanced accounting software reduces the need for auditors to audit transactions and verify ownership of assets
True
Actions to reduce risk of cyber attack
implement access controls
install internet gateways
use patch management software
Factors of Harvard model for HR management issues
competence
congruence
When customer pays cheque into account, bank receiving acts as
agent
an offer for subscription to investors is a
direct offer
Is the following one of the 14 classic principles of organisational structure (Henri Fayol)
Decentralisation
No - centralisation is
Is the following one of the 14 classic principles of organisational structure (Henri Fayol)
Initiative
Yes
Is the following one of the 14 classic principles of organisational structure (Henri Fayol)
Order
Yes
Is the following one of the 14 classic principles of organisational structure (Henri Fayol)
Fair remunertaion
Yes
Is the following one of the 14 classic principles of organisational structure (Henri Fayol)
Ideology
No
What is the definition of a risk assessemtn
the nature of risk and implications it may have for a business
Can the following be discounted by an exporter so payment is received early
A crossed cheque drawn by the customer
No - only payable to original payee
Can the following be discounted by an exporter so payment is received early
Letter of credit issued by customer bank
Yes
Can the following be discounted by an exporter so payment is received early
Bill of exchange drawn by the customer
Yes - bill of exchange drawn by customer on bank not bank itself
Is controlling and safeguarding assets a basic aspect of the accountancy profession
Yes
ICAEW Complaints procedure
conciliation
investigation
disciplinary proceedings
Four Ds of a dynamic environment
Dynamic diverse difficult and dangerous
What sets the minimum level of acceptable behaviour
the law
are companies obliged to permit paperless transfers of shares
No
What does the below define
a document that records the terms of any loan
debenture
If a charge entered into by a company is not entered within the prescribed period laid down by CA 2006 is it still valid
no void against any liquidatory, administrator or creditor and money secured by void charge is immediately repayable
Minimum age for company director
16
Once director appointed, register of directors should be updated and Registrar of comapnies notified within no more than
14 days
T/F
Directors can be found guilty of fraudulent trading even if company not wound up
True
T/F
Directors can only be found to have committed wrongful trading if their compnay has been wound up
True
T/F
The duty to exercise independent judgement verrides any agreement or provision that restricts or fetters the exercise of discretion by a director
True
If a company makes a rights issue to members, how long do members have to accept the offer of new shares once it is made
21 days
T/F
Any individual member can apply to the court for cancellation of a variation of class rights, provided they are a member of the class affected
False
T/F
Holders of at least 10% of companies paid up share capital with voting rights can requisition a general meeting
True
T/F
Relief under s994 will not be granted unless there has been a breach of company law
False - although relief less likely to be given in absence of such breach
T/F
Does the CREST transfer system operate in respect of all shares
False
Who may petition for bankruptcy
individual debtor
creditor of that debtor owed at least 5k
any supervisor of IVA in respect of that debtor
Where debts are less than X and debtors estate is worth more than Y and the debtor has not been made bankrupt or entered into a scheme with their creditors in the previous five years, the court is likley to Z a bankruptcy order
40k
4k
refuse
Can you accept appointment of director of limited company whilst subect to IVA
Yes
How long does an IVA run for
5 years
after what period of time following a bankruptcy order being made is it discharged
1 year (can be 2 - 15 if culpable)
T/F
In the event of a capital deficiency, remaining partners will bear the loss equally in absence of express agreement to the contrary
False
T/F
Performance of existing contractual duty to another party can be valid consideration
True
Will the provisions of the law reform frustrated contracts act 1943 override any express contractual terms which cover the event that has occured
NO
What is defined
a fixed or ascertainable sum agreed by the parties at the time of contracting payable in the event of a breach
Liquidated damages
What is defined
A sum of money payable under a contract in the event of a breach whose purpose is to deter a potential difficulty
Penalty clause
The Articles of association of a company limited by shares form a contract between
the company and the shareholders in respect of the shareholders rights only
What is required to dismiss a director
an ordinary resolution with 28 days notice to the company
In private company, are there rules regarding providing loans to directors
allowed if director makes appropriate disclosure
Can a third party be prejudiced due to alter vires actions of directors?
No
What % paid up capital with voting rights to call a meeting of company
5%
what % holding of nominal value of shares with voting rights may agree to shorter notice period for AGM
90%
IS VALID CONSIDERATION IA PAYMENT OF A LESser sum earlier than the date when payment is due?
Ye
T/F Where articles contain a provision for entrenchment, such provisions can only be altered by court order
False - unanimous agreement of company members
Whose interests must directors have regard of
creditors members and employees
Who can petition the court alleging company affairs are being or have been conducted in a manner which is unfairly prejudicial t interests of members generally
a shareholder only
T/F
Notice of at least 21 days must be given for AGM, unless at least 90% of the members entitled to attend and vote agree to shorter notice
False - members must be unaniomous
in dealing with bankruptcy, what costs are paid first
costs of dealing with bankruptcy
T/F A bankrupt is discharged two years following the bankruptcy order
False - one year
T/F do preference shareholders have a right to receive any unpaid preference dividends when company is wound up
No
Who must proposals of achieving aim of administration be sent to
Registrar of Companies
Companies Creditors
Members
T/F
There must be at least one partner with unlimited liability in an unlimited partnership
True
t/F
in an unlimited partnership
the partnership must be incorporated
True
T/F
In an unlimited partnership, a partner with limited liability may not withdraw capital
True
T/F
In an unlimited partnership, all partners are entitled to a 5% return on capital invested
Flase
Does an LLP need to file its partnership agreement with the Registrar of companies
No
How many days must notify Registrar of companies with changes to membership of LLP
14 days
T/F
an LLP is required to include the name of the business on its correspondence and outside place of business
True
three ways of committing fraud
fraud by way of false representation
fraud due to abuse of position
fraud due to failure to disclose informaton
