oun ation in

ccountanc

xam

Questions

Time allowed 2 hours

This exam is divided into two sections:

Section A - ALL 46 questions are compulsory and MUST be attempted
Section B - ALL SIX questions are compulsory and MUST be attempted

DO NOT OPEN THIS EXAM UNTIL YOU ARE READY TO START

UNDER EXAMINATION CONDITIONS
 Section A

ALL lt6 questions are compulsory and MUST be attempted

1 Which of the following is another name for an entrepreneurial structure?

0 Matrix structure
0 Flat structure
0 Simple structure (1 mark)

2 Stephanie is the t�pist for Ron, Martin and Josephine. Josephine is the department head and sets
Stephanie's work priorities.
Josephine is in a meeting and Martin needs a letter to be t�ped urgentl�. Martin orders Stephanie
to 't�pe his work now!'.
Stephanie refuses, sa�ing that Josephine has told her to t�pe a report from Ron, as this is needed
for a Board Meeting.
When Josephine returns from her meeting Martin complains and the situation degenerates to a
shouting match between Ron and Martin. Josephine reviews the work to be done and tells
Stephanie to t�pe Ron's report first, then the minutes of the meeting Josephine has just attended,
and then Martin's letter.
She explains to Martin that, although his letter is important, it onl� needs to catch that evening's
post.
Ron's report is needed for a Board meeting in two hours' time and the Board will also need to see
the minutes of her meeting. All parties feel happ� with the result.

Required
How would �ou describe Josephine's response to the conflict?
0 Denial
0 Suppression
0 Compromise
0 Dominance (2 marks)

3 There are three broad pre-requisites or 'pre-conditions' that must exist in order to make fraud a
possibilit�.
0 Dishonest�, criminalit� and opportunit�.
0 Deception, motivation and opportunit�.
0 Dishonest�, motivation and opportunit�. (1 mark)

4 Are the following statements true or false?

True False

Emplo�ees who notice fraud or malpractice in a workplace are 0 0

obliged to reveal their knowledge to external authorities
immediate!�.

The term given to an emplo�ee who reveals fraud or 0 0

malpractice occurring in a workplace is whistle-blower

(2 marks)
5 What elements constitute the purchasing mix?

0 Quantit�, qualit�, product, price.

0 Quantit�, qualit�, discount, deliver�.
0 Quantit�, qualit�, price, deliver�. {1 mark)

6 Which THREE of the following are the professional qualities expected of an accountant?
D Moderation
D Social responsibilit�
D Authorit�
D Independence
D Scepticism (2 marks)

7 Which THREE of the following personal relationships are likel� to constitute a threat to objectivit�
or the appearance of objectivit�?
D The audit partner is married to the finance director of an audit client.
D A junior member of the audit team pla�s football with a marketing assistant of a compan�
audited b� another office of the firm.
D A senior member of the audit team is in a relationship with the financial controller of an audit
client.
D The financial controller of a compan� resigned from the compan� three months ago, is now
working for the compan�'s auditors and is working on the audit of the compan� she
previous!� worked for.
D The audit partner attends the annual dinner of the compan�. (2 marks)

8 A group of people who are not in the same geographical location, but work together using
information and communication technolog� (ICT) to share data, allocate work and hold meetings
is called a team.

Required
Which of the following words most appropriate!� fills the gap?

0 Multi-skilled
0 Virtual
0 Multi-disciplinar� {1 mark)

9 Which of the following factors would lead to stabilit� of price levels for a product?

0 Suppl� decisions are based on the prices of an earlier time period.

0 Demand is based on the prices of the present time period.
0 The product has low price elasticities of demand and suppl�.

0 Output is affected b� non-controllable factors such as climate. (2 marks)

10 Which of the following is an external stakeholder?

0 Supplier
0 Professional bod�
0 Bank
0 Customer (2 marks)
5 What elements constitute the purchasing mix?

0 Quantit�, qualit�, product, price.

0 Quantit�, qualit�, discount, deliver�.
0 Quantit�, qualit�, price, deliver�. {1 mark)

6 Which THREE of the following are the professional qualities expected of an accountant?
D Moderation
D Social responsibilit�
D Authorit�
D Independence
D Scepticism (2 marks)

7 Which THREE of the following personal relationships are likel� to constitute a threat to objectivit�
or the appearance of objectivit�?
D The audit partner is married to the finance director of an audit client.
D A junior member of the audit team pla�s football with a marketing assistant of a compan�
audited b� another office of the firm.
D A senior member of the audit team is in a relationship with the financial controller of an audit
client.
D The financial controller of a compan� resigned from the compan� three months ago, is now
working for the compan�'s auditors and is working on the audit of the compan� she
previous!� worked for.
D The audit partner attends the annual dinner of the compan�. (2 marks)

8 A group of people who are not in the same geographical location, but work together using
information and communication technolog� (ICT) to share data, allocate work and hold meetings
is called a team.

Required
Which of the following words most appropriate!� fills the gap?

0 Multi-skilled
0 Virtual
0 Multi-disciplinar� {1 mark)

9 Which of the following factors would lead to stabilit� of price levels for a product?

0 Suppl� decisions are based on the prices of an earlier time period.

0 Demand is based on the prices of the present time period.
0 The product has low price elasticities of demand and suppl�.

0 Output is affected b� non-controllable factors such as climate. (2 marks)

10 Which of the following is an external stakeholder?

0 Supplier
0 Professional bod�
0 Bank
0 Customer (2 marks)
11 Which of the following are targets of macroeconomic polic�?

Yes No
High levels of inflation 0 0
Economic growth 0 0
Zero unemplo�ment 0 0
Balance of pa�ments equilibrium 0 0

(2 marks)

12 What is the name of the fault in the communication process that leads to the loss of the meaning
of the message in translation from intention to language or from language to understanding?
0 Noise
0 Redundanc�
0 Distortion
0 Ph�sical noise, technical noise and ps�chological noise. (2 marks)

13 Accounting Standards (and compan� law) prescribe that a compan� should produce_ _ _to
be presented to the_ _ _ .

Required
Which two words complete this sentence?
0 Accounts, shareholders
0 Reports, stakeholders
0 Accounts, stakeholders (1 mark)

14 If a task-force team required to look into a particular short-term problem were set up as a
committee, what t�pe of committee would it be?
0 An ad hoe committee
0 An executive committee
0 A standing committee
0 A joint committee (2 marks)

15 What is a co-operative?
0 A business that works closel� with another.
0 A compan� where ownership is separate from control.
0 A business owned b� its workers or customers.
(1 mark)

16 The aim of coaching is to_ _ people b� providing challenging_ _ _and_ _ _in tackling
_
them.

Required
Which words most accurate!� complete this sentence?
0 Develop; objectives; guidance.
0 Promote; opportunities; guidance.
0 Develop; tasks; guidance. (1 mark)
17 What is a 'value activit�'?
0 The means b� which a firm increases the worth of its products.
0 The processes for which a firm can charge the most mone�.
0 Actions that promote ethical standards of behaviour.
0 Those work tasks that require large numbers of staff. (2 marks)

18 What are the main phases of the business c�cle?

0 Recession, depression, recover�, boom.

0 Boom, bust, boom, bust.

0 Recession, depression, stagnation, recover�.

{1 mark)

19 Which TWO of the following are the names given to the two commonl�-adopted approaches to
the management of ethics in organisations?
D S�stem-based
D lntegrit� based
D Inspection-based
D Audit based
D Compliance based (2 marks)

20 Which one of the following statements correct!� defines corporate governance?

0 Procedures and processes according to which an organisation is directed and controlled.
0 A s�stem that allows for corrective action and penalizing mismanagement.
0 The s�stem that ensures director accountabilit� to shareholders and stakeholders. {1 mark)

21 Will� Hackett has a problem with personal time management. He takes on lots of his manager's
work and tries to fit it in with his own. The sheer size of the workload sometimes panics him. He is
popular with his staff, though, because he alwa�s finds time to talk to them and listen to their
problems - which include boredom at work. Sometimes Will� 'just doesn't know where the da� has
gone .

Required
Which of the following could Will� benefit from?

0 Delegation onl�

0 Assertiveness and goal planning

0 Delegation, assertiveness and goal planning

0 Delegation, assertiveness, communication and goal planning (2 marks)

22 Chan, Will and Felipe are emplo�ed b� an audit firm and conduct the audit of Friendl� Faces Co.
Felipe is in charge of the audit.
Friend I� Faces Co acts as agents for children wanting to work in television. Friend I� Faces have
offered Felipe's daughter a part in a popular children's television programme.
In return, the� want Felipe to sign off this �ear's audit report without mentioning the serious
concerns he has over the solvenc� of Friendl� Faces Co.
 Felipe accepts their offer and signs an unqualified audit report.
Chan has found out about the arrangement. Friendl� Faces Co have also offered her son a part
in the same programme.

Required
What action would �ou recommend Chan takes?
0 Accept the offer but report Felipe to the head of the audit firm anon�mousl� to avoid conflict.
0 Refuse the offer and report Felipe to the head of the audit firm.
0 Accept the offer and keep quiet.
0 Do nothing in order to avoid conflict.
(2 marks)

23 Julie is a valuable member of her team.

She is creative and imaginative and solves difficult problems, although she sometimes ignores
details.

Required
Which one of Belbin's team roles does Julie fulfil?
0 Specialist
0 Completer- finisher
0 Team worker
0 Plant (2 marks)

24 An accounting package automaticall� downloads bank transactions from the bank's s�stem,
saving the bookkeeper time entering the transactions manuall�.

Required
What is this feature of the accounting package an example of?
0 Artificial intelligence
0 Distributed ledger technolog�
0 Cloud computing
0 Automation
(2 marks)

25 Which parties contribute to a 360 degree appraisal?

Yes No
Line management 0 0
Colleagues 0 0
The appraisee 0 0
Customers 0 0

(2 marks)

26 When anal�sing the current situation in a business, a consultant will review the general
environment surrounding it.
0 Interest rates
0 High levels of staff turnover
0 New legislation coming into effect in 6 months' time {1 mark)
27 Assuming best corporate governance practice is applied, who should be responsible for setting
directors' remuneration?
0 The chief executive
0 The audit committee
0 Shareholders
0 Independent non-executive directors
(2 marks)

28 Which of the following is an offence related to Mone� Laundering?

0 Disguising, converting, transferring or removing criminal propert�.
0 Failure of an engineering compan� to obtain satisfactor� evidence of identit� where a
transaction is for a small amount.
0 Purchasing stolen goods. {1 mark)

29 Which TWO of the following are part of the role of financial accounting?
D Recording transactions in 'books of prime entr�'
D Preparing budgets and other financial plans
D Preparing financial statements for the use of external shareholders
D Preparing variance reports (2 marks)

30 Velma pie is a large car manufacturer that has to regular!� source thousands of component parts
for input into its range of vehicles. The aim of a joint project between the Finance Director and the
IT Director is to reduce the bargaining power of ke� suppliers and get the best price for the inputs
to the business. Several options in terms of the use of IT have been suggested.

Required
Which TWO of the following will reduce the bargaining power of suppliers?
D An extranet link to allow ke� suppliers access to future production schedules for Velma pie
D A database of all suppliers used b� the business to date, with capabilit� to blanket email
invitation to tender requests.
D Access to an online marketplace set up as a joint venture in conjunction with other large
vehicle manufacturers.
D Outsourcing the manufacture of whole s�stems (eg the braking s�stem) to selected suppliers
and sharing technical data with the chosen suppliers.
(2 marks)

31 Which of the following statements is true?

(1) An informal organisation exists within ever� formal organisation.
(2) The objectives of the informal organisation are the same as those of the formal organisation.
(3) A strong, close-knit informal organisation is desirable within the formal organisation this
practice?
0 Statement 1 onl�
0 Statements 1 and 3
0 Statements 2 and 3
0 Statement 3 onl�
(2 marks)
32 Which of the following groups should look for signs of pett� fraud as well as checking work that
staff have completed?
0 External auditors
0 Board of Directors
0 Operational managers
0 Audit committee (2 marks)

33 What t�pe of culture did Hand� suggest suits a simple and small organisation run b� an
entrepreneurial owner or founder?
0 Role
0 Task
0 Power (1 mark)

34 Are the following statements true or false?

True False

Drucker argued that developing people is a management 0 0

function.

Drucker argued that the manager of a business has one basic 0 0

function - economic performance

(2 marks)

35 Max and Ton� run a successful parcel deliver� service. 8� chance Max discovers that Ton� has
been issuing a large number of invoices for deliveries that have not been made.
When Max investigates further, he discovers that these invoices have been paid, but the funds
received b� the deliver� firm have subsequent!� been used to pa� a compan� called ABC.
Max discovers ABC is owned b� Ton�'s wife. The pa�ments to ABC were made to pa� invoices
issued to the parcel deliver� compan� for accounting services provided b� ABC. These services
have never actuall� been carried out. Max is suspicious and reports Ton� to the police. Eventual!�
Ton� is arrested for mone� laundering.

Required
What phase in the mone� laundering process has Max's firm been involved in?
0 Placement
0 La�ering
0 Integration
0 Failure to disclose (2 marks)

36 XYZ Ltd has a job vacanc� in one of its departments. Son�a B�kemate, the human resources
manager, knows that there are people in the compan� who could do the job if the� were
promoted to it. There is also a reasonable pool of suitabl� skilled individuals available in the local
area, who are easil� reached through the emplo�ment agenc� used b� the firm.

Required
Which one of the following is a justification for recruiting external I� rather than internal!�?
0 Reduction of risk
0 Motivation of the existing workforce
0 Time needed for induction
0 Innovation and adaptabilit� (2 marks)
37 Are the following statements relating to emplo�ment protection legislation true or false?

True False

Wrongful dismissal relates to the method of dismissal 0 0

Unfair dismissal is dismissal that has breached the contract of 0 0

emplo�ment

(2 marks)

38 A leader ma� be distinguished from a manager b� lack of dependenc� on:

0 Personal power
0 Position power
0 Ph�sical power {1 mark)

39 Which of the following is not an objective of personal development?

0 Providing justification for a promotion.

0 Improving performance in an existing job.

0 Career development.
0 Acquiring transferable skills and competences. {1 mark)

40 Dan is a ver� valuable member of staff and so his manager, Lee, wants to make sure that he
remains motivated and happ� in his job.
Lee knows that Dan has a high desire for success in ever�thing that he does. Lee therefore wants
to give Dan appropriate work to fulfil this desire.

Required
Which of the following features would NOT help to keep Dan motivated?
0 A degree of personal responsibilit�
0 Goals that ma� not be achievable
0 Realistic levels of risk-taking
0 An element of clear feedback
(2 marks)

41 The countr� of Sportland has recentl� had a downturn in its econom� and is facing a recession.
Man� businesses are making large numbers of staff redundant, although all businesses are
expected to recover in the long term.

Required
What t�pe of unemplo�ment is this?
0 Frictional
0 Structural
0 C�clical
{1 mark)

42 Which of the following is most clearl� a sign of an ineffective group?

0 Internal disagreement and criticism

0 Competition with other groups
 0 Passive acceptance of work decisions.

0 Achievement of individual targets

(2 marks)

43 What does the term diversit� mean?

0 A business invests in man� different activities in order to reduce risks

0 The business does not discriminate against an� groups based on gender or ethnic
background
0 The composition of the workforce reflects the population as a whole
0 A polic� of fast tracking individuals from minorit� groups
(2 marks)

44 Which of the following is NOT a valid advantages of having accounting standards?

0 The� discourage confusing variations in the methods used to prepare accounts
0 The� enforce conformit� because companies are never allowed to depart from a standard.
0 The� are less rigid than enforcing conformit� b� legislation.
0 The� provide a focal point for debate and discussions about accounting practice.
(2 marks)

45 Michael is conducting his appraisal interviews. His philosoph� is simple. He tells the subordinate in
question how he has been assessed - good and bad - and then gives him or her a chance to put
questions, suggest improvement targets, explaining shortcomings, identif�ing problems.

Required
This approach is known as the:
0 'tell and sell ' method.

0 'tell and listen' method.

0 'problem-solving' approach
0 peer rating method.
(2 marks)

46 Which t�pe of control aims to intercept data being transmitted into a s�stem from outside via the
internet?

0 Access controls
0 Firewall
0 Data verification controls
{1 mark)
Section B
ALL SIX questions are compulsory and MUST be attempted
47 Here is information about to four companies:
Compan� W consists mostl� of project teams and task forces. The compan� has no clear
leader and performance of the compan� is judged b� results.
Compan� X is a well-established compan� with a formal structure. Emplo�ees are not
particular!� ambitious and do not overstep the boundaries of their authorit�.
Compan� Y is a compan� that exists to serve the individuals that make up the compan�.
Compan� Z is a small compan� run b� an entrepreneur who makes all of the major
business decisions. There are few formal rules across the compan�.

Required
(a) What t�pe of culture is demonstrated b� each compan� using Harrison and Han�'s
cultural stereot�pes?

Compan� W
I TI
Compan� X
I TI
Compan� Y
I TI
Compan� Z
I TI
Pull down list
• Person culture
• Power culture
• Role culture
• Task culture
(2 marks)
(b) A committee includes the following roles:
• Chair
• Secretar�

Required
For each of the following roles, state whether it is the dut� of the Chair or the secretar�

Chair Secretary
Give ruling on disputed points 0 0
Taking notes during a meeting 0 0
Communicating decisions taken in a meeting 0 0
Fixing the date of a meeting 0 0

(2 marks)
(Total = Lt marks)

48 (a) Each of the following individuals works for Carberr� Co.

Julie takes stationer� from the office stationer� cupboard home so that she can make
notes for a work meeting.
 Ken has borrowed mone� from the office charit� collection with the intention of
repa�ing it as soon as possible.
Michael is struggling to meet his deadline for a report for the Chief Executive, so he
asks one of his colleagues to assist him.
Nadia has adjusted the three-�ear cash flow forecasts for the compan� to increase the
chances of obtaining a bank loan.

Required
State whether each individual's behaviour is ethical or unethical.

Ethical Unethical
Julie 0 0
Ken 0 0
Nadia 0 0
Michael 0 0

(2 marks)

(b) There are different views about how much external pressures can modif� business
objectives.
The view that objectives emerge from the differing views of shareholders, managers,
emplo�ees, customers, suppliers and the public, but the� are not all selected or
controlled b� management is known as the ___________ _ .
Which phrase correct!� fills the blank above?
0 Stakeholder view of compan� objective
0 Framework of rules
0 Consensus theor� (2 marks)
(Total = Lt marks)

49 (a) State whether the following statements about internal audit are true or false.

True False
All organisations need to have an internal audit 0 0
department.

The internal auditor should be independent 0 0

The internal auditor should report to the Finance 0 0
Director.

The internal auditor ma� perform a social audit. 0 0

The internal auditor ma� review compliance with laws 0 0
and regulations

Internal audit will assess the risk management and 0 0

control culture of an organisation.

(2 marks)

( b) Do the following statements relate to

• Internal audit
• External audit
• Both internal and external audit
 Work relates to the operations of the
organisation
I TI
Objective of work is to express an opinion on
the financial statements
I TI

Pull down list

• Both internal and external audit
• External audit
• Internal audit
(2 marks)

(Total = Lt marks)

50 Luis, Charlotte, Ro� and Jessica all work for OWE Co

Required
(a) For each person, select the appropriate development tool for the situation:

Luis has just completed his first three-month period with

OWE Co and is keen to get feedback on his performance
I TI
level and areas for development.

Charlotte is new to her department and needs an

experienced emplo�ee to show her how to perform the
I TI
tasks that she wil I be expected to do.

Ro� has just joined the compan�, but has ambitions to

become a manager at OWE Co and wants to know how
I TI
he can reach this goal in the long run.

Jessica has just been told she will need to relocate in order
to continue working in the marketing department of OWE.
I TI
She is concerned about several issues arising from this
relocation and wants to work through these issues.

Pull down list

• Appraisal
• Coaching
• Counselling
• Mentoring
(2 marks)

(b) Which TWO of the following are benefits to an organisation of using counselling?
D Identifies future managers
D Demonstrates commitment to emplo�ees
D Establishes learning targets
D Determines pa� increases
D Reduces labour turnover
D Provides a role model for emplo�ees (2 marks)

(Total = Lt marks)
51 (a) For each of the following teams, identif� the correct stage from Tuckman's model.

Team W has been performing well for some time. It is now

concentrating on self-maintenance and the initial task that
I TI
the team was formed for is beginning to get overlooked.

Team X is fulfilling its objectives, unhindered b� difficulties of

growth and development.
I TI
Team Y consists of members tr�ing to impress their own
personalit�. There is wariness from each team member
I TI
about introducing new ideas and the objectives of the team
are current!� unclear.

Team Z is beginning to see agreements about individual

requirements and expectations. Procedures are evolving
I TI
which should bring in methodical working for the team.

Pull down list

• Dorming
• Forming
• Norming
• Performing
(2 marks)

(b) Which TWO of the following steps would help to create a team identit�?
D Dealing with conflict within the team openl�
D Creating a separate space, either ph�sical or virtual, for the team
D Creating a team uniform
D Encouraging interpersonal relationships within the team
D Encouraging competition with other groups (2 marks)

(Total = Lt marks)

52 Highgate is a private limited compan� which is run b� the three founders who are John,
Oliver and Jemma. The famil� members also own 80% of the shares and as such control
the compan� as well as running it.
The other 20% of the compan� is held b� private investors who don't have an� so� in the
da�-to-da� running of the business.
Highgate does not have man� customers and is heavil� reliant on one main customer
(Archwa�) for a significant percentage of its revenue.

Required
(a) For each of the following, indicate whether the� are internal, connected or external
stakeholders.

John, Oliver and Jemma

The 20% shareholders

Archwa�
 Pull down list
• Connected stakeholders
• External stakeholder
• Internal stakeholder
(2 marks)

(b) Which TWO of the following are advantages of a public sector organisation over a
limited compan�?
D Fairness
D Accountabilit�
D Efficienc�
D Political interference
D No restriction on size (2 marks)

(Total = Lt marks)