Unit R/617/6922 Law for Accounting

ATHE Level 4 Extended Diploma in Accounting

QN Code: 603/4851/3
Level 4 15 credits
Assignment

You are working in an accountancy firm as a junior assistant in a department dealing with
small and medium sized businesses. As part of your training, you have been asked to do an
initial review of the following cases for the partner, picking out the issues and discussing
possible solutions and outcomes. You will need to write a report to the partner based on
each case citing relevant case law. Your report should cover all relevant legal points, discuss
issues of law and give an opinion relating to the scenario where appropriate.

Task 1

A client, Jodie Hart who has started a new training business wants advice on a number of
issues relating to her business. You must deal with each of a-d below.

a) Jodie is trying to decide whether to become a limited company but does not know what
this would involve.

Your report must:

 Analyse the requirements of company law for the formation, financing and
administration of companies.
 Analyse the role and responsibilities of company directors, officers and shareholders.

To gain a distinction, your report must:

 Analyse aspects of capital maintenance.

LO 2 AC 2.1, 2.2
2D1

b) On the 11th August Jodie asked her brother John, who was not part of the business but
helping out, to approach a small business in the town where they live that was closing down.
John was to tell them that Jodie was interested in buying their office furniture and equipment
for £1000 but needed to collect it and move it to her own office premises by the 25th August.
The owner – Harry Parker – says he will think about it.

On the 14th August, Harry sees John in a local coffee shop and says that he would like to sell
the furniture and equipment but that he won’t be able to part with it until the 31st August
when he can deliver it to Jodie’s offices. John says this will be fine.

© ATHE LTD 2019

Jodie then sends Harry an email saying she has changed her mind as her uncle has given
her some office furniture and equipment. Harry writes back saying that they have a contract
and that he will be delivering everything on the 31st and will expect payment.

Using the scenario, write a section of your report about the elements of contracts and about
the agency relationship in order to advise Jodie.

Your report must:

 Analyse the elements and nature of contractual agreements
 Explain the principles of agency and their impact on business practice.

To gain a merit, your report must:

 Assess the validity of the contract.

To gain a distinction, your report must:

 Evaluate the implications of an agency relationship for the principal and the agent.

LO 1 AC 1.2, 1.2
1M1
1D1

c) Jodie is concerned about information and intellectual property in the business. She keeps
personal details of trainees and she has a large amount of training material that has been
produced by her and her employees. She wants advice on the laws relating to data
protection and intellectual property.

Your report must:

 Analyse the requirements of data protection legislation.
 Explain how intellectual property can be protected.

To gain a merit, your report must:

 Assess the importance of intellectual property rights to businesses.

LO 4 AC 4.1, 4.2
4M1

d) One of Jodie’s employees caused a fire at a training event by using electrical equipment
that was not properly checked. Several people suffered minor injuries. They are trying to sue
Jodie for compensation. Jodie immediately dismisses the employee. Use the scenario to
discuss the law of tort and remedies available and discuss the employment law relating to
employment contracts and termination.

Your report must:

 Explain the law of tort and the remedies available.
 Assess the impact of legislation relating to employment

LO 1 AC 1.3
LO 4 AC 4.3

Task 2
Dayloan Limited, a small loans company, are insolvent. They won a number of assets which
are subject to fixed and floating charges and owe a large amount of corporation tax. They
are also being investigated for money laundering and other offences including poor lending
practices, bribing a government official and gaining unauthorised access to competitor’s
computers in order to access their clients. They have failed to operate in accordance with
legislation and guidelines on responsible lending. They want advice on the insolvency and
possible criminal charges and penalties.

Your report must:

 Explain the process of insolvency for business organisations.
 Analyse the relationship between legal principles, legislation, case law and ethical
codes.
 Explain the elements and consequences of malpractice, fraud and bribery in
business organisations.
 Explain offences and penalties related to money laundering.
 Explain offences and penalties related to computer misuse and cybercrime.

To gain a merit, your report must:

 Advise on the insolvency process for a given situation.

LO 2 AC 2.3
LO 3 AC 3.1, 3.2, 3.3, 3.4
2M1
Guidelines for assessors

The assignments submitted by learners must achieve the learning outcomes and meet the standards specified by the assessment criteria for
the unit. To achieve a merit or distinction grade, the learners must demonstrate that they have achieved all the criteria set for these grades.
Where work for the pass standard is marginal, assessors can take into account any extension work completed by the learners. The suggested
evidence listed below is how learners can demonstrate that they have met the required standards.

Task LOs and Suggested evidence Suggested additional Suggested additional evidence
number AC PASS evidence MERIT DISTINCTION
LO 2 AC 2.1, 2.2
Learners need to write a
comprehensive report detailing the
relevant points of law on the
formation, financing and
administration of companies LO2 2D1
including the advantages (e.g. veil
of incorporation/limited liability) and Distinction responses will discuss the
disadvantages (e.g. administrative relevant law capital maintenance issues
LO 2 AC burden). They should recognise that such as reduction of capital, redemption
1a) 2.1, 2.2 the scenario organisation is a small of shares, distribution of profits and
2D1 business and identify exemptions purchase of own shares. Responses
available in respect of reporting. should be supported with relevant case
Learner responses should advise on law.
the duties of directors and the roles
of shareholders and officers of the
company.
Responses should be supported
with relevant case law.

© ATHE LTD 2019

 LO 1 AC 1.2, 1.2
Learners should identify the
elements of a contract (offer, LO1 1D1
counter-offer, acceptance,
consideration etc.). LO1 1M1
For a distinction, learners need evaluate
LO 1 AC Learners should discuss the Merit responses will refer to the the implications of the agency
1.2, 1.2 scenario and comment on the relationship for Jodie and John giving the
position of John as an agent of the
1b) 1M1 advantages and disadvantages of the
business and his ability to make validity of the contract.
1D1 relationship and exploring the
contracts on behalf of the business.
They should demonstrate an Responses should be supported implications of issues arising. Responses
understanding of the issues relating with relevant case law should be supported with relevant case
to agency. law.
Responses should be supported
with relevant case law.
LO 4 AC 4.1, 4.2
Learner reports should detail the LO4 4M1
requirements for Jodie’s business in
relation to data protection and Merit responses will discuss the
LO 4 AC explain the relevant data protection
4.1, 4.2 value of the intellectual property
1c) legislation and the penalties for non- to Jodie’s business. They should
4M1
compliance. They should explain refer specifically to intellectual
how Jodie can protect training
property described in the
materials produced in-house and
scenario.
actions she can take if someone
breaches her rights.
LO 1 AC 1.3
LO 1 AC 1.3 LO 4 AC 4.3
1d) LO 4 AC 4.3 Learners should discuss the issue
of liability under tort law in relation
to the actions of the employee
 (vicarious liability). Responses
should also consider the remedies
available to those who have
suffered injury and Jodie’s liability in
relation to this. In respect of the
employee, learners should explain
how employees are under contract
and the main responsibilities of
employees and employers under
employment contracts. They should
consider the issue of the
employee’s dismissal and whether
Jodie was within her rights to
dismiss the employee in this way.
Responses should be supported
with relevant case law.
LO 2 AC 2.3
LO 3 AC 3.1, 3.2, 3.3, 3.4
Responses should explain the
process of insolvency – distinction
responses will relate the discussion LO2 2M1
LO 2 AC 2.3 to the scenario and advise on the
LO 3 AC Merit responses must provide
specifics such as fixed and floating
3.1, 3.2, 3.3, charges and money owed to HMRC. advice on insolvency for the
2 3.4 specific situation set out in the
Responses should also discuss the
2M1 potentially criminal behaviour of the scenario.
company in respect of money
laundering, bribery and computer
hacking as well as discussing the
differences between ethical lending
codes and legislation relating to
lending. (Note that learners do not
need to show detailed knowledge of
the specific area only an awareness
of the difference between ethical
codes and legislation). They should
discuss issues of corporate
governance and ethical practice.
They should consider the penalties
that could be imposed in each case
and the consequences for the
company and its officers.