Section A: Flashcards
What are finance functions for?
To enable, shape and narrate how
How do finance enable?
Planning e.g. Budgeting
Forecasting
Resource Allocation
How do finance shape?
Performance Management
Control e.g. Variance Analysis
How do finance narrate how?
Financial Reporting
What is a stakeholder?
A group or individual who has an interest in what the org does or the expectation of the org.
What are the three types of stakeholders?
Internal
External
Connected
What is an example of a internal stakeholder?
Employees
Managers
Directors
What is an example of an external stakeholder?
Community
Government
Trade Unions
Competitors
What is an example of a connected stakeholder?
Shareholders
Customers
Suppliers
Finance Providers
According to Mendelow power interest what do you do with someone if they have low power and low interest?
Minimal Effort
According to Mendelow power interest what do you do with someone if they have low power and high interest?
Keep Informed
According to Mendelow power interest what do you do with someone if they have high power and low interest?
Keep Satisfied
According to Mendelow power interest what do you do with someone if they have high power and high interest?
Key Players
What is a tradionalists?
Thinks companies should operate solely to make money for shareholders and they shouldn’t worry about CSR.
What should good CSR increase?
Revenue and Profibility
What is an agency problem?
The directors run the company in their own interests, rather than those of the shareholders.
What are some symptoms of poor corporate governance?
Domination of Board Misleading finance statements no involvement by board lack of contact with shareholders Lack of Supervision Inadequate control functions Short term profitability
Where is the corporate governance best practice guidelines?
UK
Where is the corporate governance a legal requirement?
US
What is a non-executive director?
Only attend board meetings
What are some must nots! for a non-executive director?
Be an employee last 5 years
Have close family ties with directors
Serve for more than 9 years
Who must appoint people to board?
Nomination Committee
Who decides on pay and incentives offered to directors?
Remuneration Committee
What are the 4 I’s in ‘Information to Impact’?
Information
Insight
Influence
Impact
What are the 5 A’s of ‘information to impact’?
Assemble Analyse Advise Apply Acumen
What does assemble mean?
Collate Data
What does analyse mean?
Provides insight
What does advise mean?
Communicate Insight
What does apply mean?
Support implement of decision
What does acumen mean?
Connect activities together
What are some examples of internal sources of data?
Sales Ledger
Purchase Ledger
Payroll System
Fixed Asset System
What are some example of external sources of data?
Suppliers: Product Prices, Specification
Customers: Product requirements, Price sensitivity
Government: Taxation, Inflation Rates
What must information be?
ACCURATE
What does the acronym ACCURATE stand for?
Accurate Cost Complete Understandable Relevant Adaptable Timely Easy to use
