GENIUS Bus Mock Exam 1) ee iness School © [Xores.\ ‘Data is stored in one single on-site location’ is incorrect because Data is stored off- site. ‘The service provider cannot access the user's information’ is incorrect because one of the advantages is that the supplier can support the client by accessing information and upgrading software as required. ‘Information is simultaenously available to multiple users' is correct as it is a significant benefit of cloud computing. lanswer 2} Aand B. An appraisal is also used to identify potential such as future education, training and development needs, and assessing future prospects in the organisation. ene A Stagflation is the situation which arises where there is a combination of unacceptably high unemployment and unacceptably high inflation. Northland shows extremely high inflation (27.5%) and high unemployment. Southland has high inflation but lower unemployment, Eastland has low inflation and Jower unemployment. Westland has higher unemployment but has low inflation. Therefore they are not experiencing stagflation. This is an example of the ¥ pattern of communication. Adam has only one line of communication up to Boris which is at the bottom of the Y shape. The fact that Boris, Chow and Dev are not connected to each other results in the overall ¥ shape in this reporting pattern. A According to Honey and Mumford, theorists seek to understand basic principles and to take an intellectual, ‘hands-off’ approach to learning. They prefer training to be designed to allow time for analysis. Page 19GENIUS Business School © Personal data is information about a living individual, including expressions of opinion about him/her, but not data about organisations. AandC. err AandC. The main reports a company produces for external purposes are the financial statements. The main financial statements are the statement of profit or lass, the statement of financial position and the statement of cash flows. Budgets and variance reports are internal reports which companies prepare to help them run and manage their business. Ge When faced with an ethical dilemma an individual needs to consider three aspects: * Transparency - do I feel comfortable with others knowing about my decision; is my decision defensible? * Effect - have I considered all parties who may be affected by the decision, and have I taken into account all factors or mitigating circumstances? * Fairness - would a reasonable third party view my decision as fair? Loyalty to a manager is net an appropriate question to ask because it might have been the individual's manager that placed them in the ethical dilemma in the first place. A The implementer is disciplined and reliable, conservative and efficient. Strengths and weaknesses are exactly as described for Desmond. Meret) Bandc. An executive director is an internal stakeholder and a pressure group is an external stakeholder. The two connected stakeholders are a shareholder and a supplier. BandC. Time is a scarce resource. One of the problems managers have in allocating their time comes from determining what tasks are important and distinguishing these from urgent tasks. Page 20GENIUS Business School © Complements are goods which tend to be bought and used together. D. lanswer 13 BandC. Constructive conflict leads to positive results. In this case creativity and innovation is encouraged, and a variety of solutions to problems is introduced. External auditors should design and implement audit procedures that give a reasonable prospect of detecting irregular statements or records. An external audit is not intended to identify every inconsistency or error, nor will it provide a systematic check of every transaction. Sampling the records will form part of the audit tests, but is not an objective of the external audit. C A matrix structure is a hybrid - in this case mixing functional and product structures, Jeading to dual responsibil Intrinsic rewards are those which arise from the performance of the work itself. They are psychological rather than material and relate to the concept of job satisfaction. A The statement uses a key phrase ‘from its own experience’ which means it is learning for itself which is a key feature of machine learning which is a specialised aspect of artificial intelligence. Aand B. Work must be completed without bias or prejudice (independence), and accountants have a public duty as well as that to their employer/client (social responsibility). Courtesy is a personal rather than professional quality. Page 21GENIUS Business School © The requirement for limited liability companies to keep proper records and books of account is usually dictated by national legislation such as the UK Companies Act. A Customer's buying decisions may be influenced by a range of ethical considerations. Factors such as paying suppliers a fair price (the ‘Fairtrade’ commitment), using organic ingredients and whether or not the company tests its products on animals can all be important ethical considerations potential customers may have when choosing whether or not to buy a company's products. AandC. Rate of pay and leave entitlement are examples of standing data. Unlike net salary they are not subject to constant change. AandC. Members of an effective team have a free and open style of communication. They also provide each other with feedback in the form of constructive criticism and show an active interest in work decisions. The halo effect occurs when an applicant has one of the characteristics or traits required for the position, and the interviewer subconsciously gives this undue weight and decides that the applicant has the other characteristics or attributes as well. D. The local authority is a not-for-profit organisation and so will rely most heavily on value for money and efficiency indicators rather than information on performance and profitability. This is an example of a divisional structure where a business is divided into autonomous regions or product businesses. Page 22GENIUS Business School © Unfair dismissal is dismissal without good reason. D. Manes Counselling is a way of helping a person to help him or her self. Therefore Joanne's role és that of a counsellor. Meee Bandc. The first level contains the observable, express or explicit elements of culture - behaviour artefacts and attitudes. AandC. The growth of the service sector and increase in the average age that women decide to have children have been cited as reasons for the increasing participation of women in the labour force. The existence and significance of any threat will depend on the nature, value and intent Of the offer. A professional accountant must first weigh all specific facts and circumstances and conclude that the risk is trivial and incosenquential before accepting a gift or hospitality. The external auditors report to the shareholders on the stewardship of the directors. The increased use of broadband will mean that more customers will be using the internet to place orders. So the business process most affected will be order processing and distribution. Page 23GENIUS Bus iness School © [Xores.\ The external auditors report to the members of the company and so owe a duty of reasonable care and skill to the shareholders as a collective body. cS c In order to work effectively Stephan should set priorities and schedule the work according to those priorities. BandC. The purchasing department advises the payables ledger staff of purchase orders and confirms the validity of invoices when they are received from suppliers. It is the cashier's role to inform the payables ledger team and purchasing department of payments made. A Lose-lose means that neither party gets what they really wanted, and includes the notion of compromise, as in this case. TECA Co is making a decision on the location of its business. Therefore the correct answer is ‘place’. Once training needs have been identified the next step is to translate these needs into training objectives. ED) True/False IFAC is responsible for promoting ethical education standards, but it does not issue global accounting standards. Page 24GENIUS Business School © A procurement manager is responsible for purchasing. Therefore the system most relevant to a procurement manager is to do with ordering inventories. A just-in-time system is a system for ordering inventories that will reduce inventories of raw materials, c A Heifetz said that in order to facilitate change effectively leaders should instil in team members an understanding of their need to adapt their values, attitudes and behaviours over time. A principles-based approach to regulation means that it is up to the company to decide how to act in this case so it cannot approach the government for permission. As DEF Co believes that it is in the best interests of the company and its shareholders to reappoint these non-executive directors then it should do so. However as this is in breach of the code of practice DEF Co should disclose this breach and explain its reasons in the annual report. Meme) c. The group is going through a period of settling down which according to Tuckman's theory is the norming stage. c Statement 1 can be used as a definition of ethics: ethics are a set of moral principles to guide behaviour. ‘Statement 2 is not true. A course of action may not be illegal, but it may still be unethical for example, where some finance companies sell high interest consumer loans to vulnerable people who then struggle to repay the loans and the interest. Clearly companies and individuals have to comply with legal standards and regulations, but the notion of ethical behaviour denotes moral principles and social responsibility as well as legal compliance. Page 25© GENIUS Bus D. iness School © ACCA A systems audit is designed to assess the overall effectiveness of the organisation's internal controls. c \ The civil service is currently ‘a highly controlled, bureaucratic structure’. This is a role culture. Hai wants to make it focus on results which is a task culture. Therefore Hai is seeking to change the civil service from a role culture to a task culture. ee ¢ 4, Internal stakeholders have a direct, close and ongoing relationship with the ‘organisation. This is often contractual in nature, such as contracts of employment with employees at all levels. They reside inside the company and tend to benefit directly from their contributions to company growth. As such they include executive directors and managers, but not non-executive directors. . Connected stakeholders have an ongoing business relationship with the business while remaining somewhat detached. They have an economic or contractual relationship with the organisation. AS such they include suppliers and customers, but not regulators or professional bodies. 3. External stakeholders have no direct link to the organisation, but are influenced by (or can influence) their activities. As such they include pressure groups, but not customers or providers of finance. 4. Opportunitiés and threats arise from the external environment faced by an organisation, and so external stakeholders are relevant. Strengths and weaknesses arise fromwithin the organisation. 5. Stakeholders with low power but high interest cannot influence strategy directly, so do'not need to be kept satisfied. However, they could influence more powerful stakeholders, perhaps via lobbying, so should be kept informed. 6. Stakeholders with high power and high interest can influence, and may even participate in, decision making. Strategy must be acceptable to them - they are the key players. 7. Planning at the strategic level has a longer-term view than at tactical or operational levels, so three to five years would be appropriate. . Stakeholders may influence other stakeholders, and positions change - the key players of today may not still be key players tomorrow. Thus, consensus is a sensible approach. Page 26© GENIUS Business School © Task A divisional structure splits an organisation into autonomous units or regions, each with its own responsibility for profit/loss and each properly delegated authority. The description of XXX Co fits this definition, with divisions for each product group. A matrix structure splits an organisation in two ways, usually a functional split on one axis and a product/customer/project split on the other. Employees have more than one line of authority. The description of YYY Co fits this'definition, with regional divisions and cross-regional project teams. A virtual organisation comprises individuals/teams/companies/etc. which are geographically dispersed. The organisation has no (or minimal) premises and mainly exists electronically on the internet. The description of ZZZ Co fits this definition. Item 2 - The norms of personal and interpersonal behaviour, and the customs/rules about acceptable/unacceptable behaviours, are observable elements of culture at the first level of the'model. Item 4 - Artefacts are concrete expressions of culture such as architecture, internal design, dress codes and symbols. These are observable elements of culture at the first level of the model. Item 5 - Attitudes are the determinants of collective behaviour, such as greeting styles, business formalities and ceremonies. These are observable elements of culture at the firstlevel of the model. Task 3 The technostructure comprises analysers who seek to standardise and optimise business processes and outputs - they look for the best way to complete any job. Page 27© GENIUS Business School © 1, The external auditor is appointed by the shareholders, to provide assurance on the stewardship of directors. He/she must be independent of the directors. 2. The external auditor is appointed from one annual general meeting to the next, so his/her contract term is fixed. The need for independence rules out a contract of employment. 3. The shareholders appoint the external auditor to report back to them ingeneral meeting. 4. The primary purpose of the external auditor's report is to express his/her professional opinion based on evidence collected. He/she canfot provide absolute assurance or guarantees. 5. The main element of the external auditor's opinion is whether or not the financial statements show a fair presentation of financial position and performance. The external auditor cannot state that the financial Statements are accurate in all respects. . Substantive tests aim to detect material misstatement or fraud in the financial statements. They are concerned with the correctness of transactions and account balances. Compliance tests check that the organisation's system of internal controls is operating effectively and as prescribed. 8. Objectivity is oneof the fundamental principles of the ACCA’s Code of Ethics and Conduct. It means not allowing bias, conflict of interest or undue influence of others to override professional or business judgements. Page 28© GENIUS Business School © een 4, Adair’s model is known as action-centred or functional, reflecting its practicality as a tool for developing leaders in industry and commerce. 2. Adair’s model is a practical tool, thus it focuses on what leaders need to actually do (as opposed to trait theorles which focus on what they need to be). 3. Trait theories are based on the idea that leaders are born, not made. They suggest that there are certain personal qualities that are common to successful eaders. 4. Adair’s theory is based on 3 variables (his 3 interlocking circles) - task ‘needs, group needs and individual needs. There is a need for balance between at nieving the task, maintaining the group/team and developing the individual. ~ \ ;, Blake and Mouton produced a grid based on two dimensions of leadership - concern for production and concern for people. A leader who focuses excessively on achievement of the task shows high concern for production but minimal concern for people -a' produce or perish’ mentality, (~~ 6. In the Blake and Mouton model, a leader who focuses excessively on staff needs and developing satisfying relationships will pay tittle attention to results - the‘ country club’ style. In the practical Adair model, team\briefings are essential to foster teamwork and motivate individuals. \ . The action-centred, éiproach is explicitly consultative/participative, believing this to ‘be more effective than the autocratic and hands-off extremes. Counselling is an interpersonal interview where one person helps another to help himself/herself. Jacques thus has a counselling role, helping tenants to resolve their financial difficulties. Coaching involves a trainee being put under the guidance of an experienced employee, who shows the trainee how to perform tasks and helps them develop specific skills, Ki thus has a coaching role, helping the negotiators to build on their strengths and overcome their weaknesses. Counselling is an interpersonal interview where one person helps another to help himself/herself. Larissa thus has a counselling role, helping employees to overcome personal difficulties. ‘Mentoring involves an experienced person helping to foster an individual's personal and career development. It tends to be more informal than coaching, and is less concerned with specific skills. Maureen thus has a mentoring role with the new employees. Page 29GENIUS Business School © A familiarity threat may arise from previous dealings or association with an individual, group or organisation. In this case, Raj knew the manager from his schooldays and had a pre-conceived opinion that he would not be involved in any irregular behaviour. ee Taskt Intimidation threats arise from fear of the consequences of taking a decision. Raj has made it clear that he is anxious to sign off the audit visit on the day in question, so Sam may feel pressurised to provide an early resolution by accepting Raj's view that the branch manager should be trusted. Task2 The board of directors is accountable for the effectiveness of internal contro! systems, and for this reason it would be acceptable for the internal auditors to report to the board. The board of directors should also comprise a proportion of non executive directors to provide an additional degree of independent scrutiny, making it a suitably objective forum to report to. The board of directors is accountable for the effectiveness of internal control systems, but in most large organisations this responsibility is delegated to an audit committee. This committee should always be madeupentirely of independent non executive directors, making it a suitably objective forum to report to. Page 30