Acca f1 BT Exam Kit

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ACCA F1 BT Exam Kit
ACCA F1 Practice and Revision Kit by BPP (Association of Chartered Certified

Accountants)
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Question Bank
ACCA
Business and Technology (BT)
From September 2020

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ii I n t ro d u c t i on A C C A BT Q ue s t ion Ba nk
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APRIL 2020 RELEASE

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A C C A BT Q ue s t ion Ba nk I n t ro d u c t i on iii
How to use this Question Bank
1 QUESTION PRACTICE IS KEY TO SUCCESS

This Question Bank has been written to help you pass Business and Technology (BT).
Targeted question practice
In the first section there are banks of questions based around each chapter of the Course Notes. The
number of questions reflects the weighting of the topic to the syllabus. You should attempt to do all
the questions before attempting the mock assessments at the end.
Do the practice exam and the mock assessments
The importance of question practice cannot be underestimated and you should attempt the
mocks under assessment conditions. For this paper you have two hours to answer 46 questions in
section A and 4 questions in section B. It is vital you stick to the time allocation and answer every
question.
The types of question that may be included are as follows:
OT MTQ
Multiple Choice You are required to choose one answer from a list of options by  
clicking on the appropriate radio button
Multiple Response You are required to select more than one response from the  
options provided by clicking the appropriate tick boxes
Multiple Response You are required to select a response to a number of related  
Matching statements by clicking on the radio button which corresponds
to the appropriate response for each statement
Number Entry You are required to key in a numerical response to the question  
Gapfill You are required to enter answers into blank areas  
Hot Spot You are required to choose one or more answers by clicking on  
the appropriate hotspot area/ areas on an image
A wide representation of the above types of question are included in this Question Bank.

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iv I n t ro d u c t i on A C C A BT Q ue s t ion Ba nk
Contents
Page ref
Chapter / Syllabus area Number of OT No of Multi task Q A
questions questions
1 Organisations, 22 1 109
stakeholders and the
business environment
1 Multi task 6 6 112
questions
2 The macro-economic 12 11 115
environment
questions
3 The micro-economic 23 15 117
environment
questions
4 Organisational structure 14 26 122
questions
5 Organisational culture 12 33 127
and committees
questions
6 Governance and social 10 38 130
responsibility
questions
7 Systems, controls and 6 42 133
compliance
questions
8 Control, security and 24 45 134
audit
questions
9 Identifying and 16 54 140
preventing fraud
questions
10 Leading and managing 14 60 143
individuals and teams
questions
(1) Recruitment and 15 65 146
selection

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A C C A BT Q ue s t ion Ba nk I n t ro d u c t i on v
Page ref
Chapter / Syllabus area Number of OT No of Multi task Q A
questions questions
(1) Multi task 3 68 148
questions
(2) Diversity and equal 8 70 150
opportunities
(2) Multi task 1 72 151
questions
11 Individuals, groups and 14 73 152
teams
questions
(1) Motivating 18 80 156
individuals and
groups
(1) Multi task 3 84 158
questions
12 Training and 15 86 160
development
questions
(1) Performance 11 92 164
appraisal
13 Personal effectiveness 14 95 166
and communication
questions
14 Professional ethics 11 102 171
14 Multi task 5 105 173
questions
Practice exam questions

and answers
Practice exam 177 193
46 objective test questions covering all areas of the
syllabus,
plus 6 multi task questions
Mock exam
A full exam to practise is provided. Question practice, under assessment conditions, is vital to
passing this exam.

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vi I n t ro d u c t i on A C C A BT Q ue s t ion Ba nk

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 1
Chapter 1: Organisations, stakeholders and the business

environment
Objective test questions

1 Which of the following statements are true?
I Public companies are owned by the Government.
II Legal entities owned by private owners are known as limited companies.
III Organisations can achieve results which cannot be achieved by individuals.
 I only
 II only
 III only
 I, II and III
2 marks)
2 An independent voluntary association of people who act together for some common purpose
(which does not include making money) is known as:
 A Co-operative
 A Partnership
 A Limited Company
 A Non-Governmental Organisation
(2 marks)
3 A private sector organisation is owned by:

 The Government
 The shareholders of the organisation
 The stakeholders of the organisation
 The employees of the organisation
(2 marks)
4 Who is a ‘connected stakeholder’?

 An employee of a company
 The Government
 A manager of a company
 The customers of a company
(2 marks)
5 Stakeholders who have a contractual relationship with an organisation are known as:
 Primary stakeholders
 Secondary stakeholders
 External stakeholders
(1 mark)

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2 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk
6 Emvision is a business entity run by Peter Watkins. Peter makes all the decisions relating to the
entity and should it fail, will be personally responsible for its debts.
Which of the following describes what sort of business Emvision is?
 Non-Governmental Organisation
 Private Limited Company
 Sole trader
(1 mark)
7 How is the term ‘synergy’ best described?

 When individuals work together they achieve more than when the same individuals work
on their own.
 When individuals work on their own they achieve more than when the same individuals
work together.
 When individuals use more energy they achieve more.
 When groups of individuals use more energy, they achieve more.
(2 marks)
8 According to Mendelow’s Matrix, stakeholders in which segment should be kept satisfied?

 Segment A – high level of interest, high power
 Segment B – low level of interest, high power
 Segment C – high level of interest, low power
 Segment D – low level of interest, low power
(2 marks)
9 Which TWO of the following are NOT internal stakeholders of an organisation?
Managers 
Suppliers 
Employees 
Shareholders 
(2 marks)
10 According to Mendelow, which group of stakeholders must companies keep satisfied?

 Those with little power and little interest in the company
 Those with a high level of power but little interest in the company
 Those with little power but a high level of interest in the company
 Those with a high level of power and a high level of interest in the company
(2 marks)

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11 An organisation that is accountable to the Government, has a potentially unlimited demand for
its services and can obtain its funds by raising taxes is known as what?
 Public sector organisation
 Co-operative
 Partnership
(1 mark)
12 According to Mendelow’s matrix, how should stakeholders who have a high level of power and
a high level of interest be treated?
 Keep satisfied
 Consult/inform
 Involve
 Ignore
(2 marks)
13 Identify which TWO of the following statements are true.

SMART analysis is a model that is concerned with the general environmental 
influences on a business
Money that is given in exchange for goods and services is known as consideration 
Employees and shareholders are internal stakeholders of an organisation 
Resources available to public sector organisations are limited 
(2 marks)
14 What is the name of the framework that is concerned with the general ‘environmental’
influences on a business?
 INITIAL analysis
 SMART analysis
 PEST analysis
(1 mark)
15 Under contract law, money that is given in exchange for goods and services is known as:
 Agreement
 Consideration
 Financial
(1 mark)

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16 Jane has an employment contract that requires her to give two months’ notice of her intention
to leave Ray Limited and that they give her a similar period of notice should they wish to
terminate her employment. One Friday afternoon, Jane is called into her manager’s office and
told that her job no longer exists and she will no longer be required. He also tells her that she
will receive one month’s pay in lieu of notice. What sort of breach of contract law has taken
place here?
 Unfair dismissal
 Contractual dismissal
 Dismissal without notice
 Wrongful dismissal
(2 marks)
17 Which of the following equations sums up the basics of contract law most accurately?
 Contract = Offer + Agreement
 Acceptance = Agreement + Offer
 Agreement = Offer + Acceptance
 Offer = Agreement + Acceptance
(2 marks)
18 The term commonly used to describe the impact that an organisation’s activities have on the
environment is:
 Environmental pollution
 Environmental depletion
 Environmental footprint
(1 mark)
19 The Data Protection Act 2015 regulates how personal information is used and protects
individuals from misuse of personal details. Which TWO of the following are NOT requirements
of the Act?
Regulated personal information should be kept longer than necessary 

Regulated personal information should be processed for unlimited purposes 
Regulated personal information should not be transferred abroad without adequate 
protection
Regulated personal information should be adequate, relevant and not excessive 
(2 marks)
20 Which of the following is NOT an advantage of outsourcing?

 Economies of scale
 Flexibility
 It encourages employees to keep up-to-date with new developments in their industry
 It can remove uncertainty about cost
(2 marks)

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21 Olga bought a ‘Happy Cook’ cast-iron pan from Barters Ltd, but when she unpacked it at home,
she saw that the wooden handle was broken. The next day, she returned to the store where she
bought it and asked for a full refund. The sales assistant refused to give a refund, her reason
being that it was the responsibility of ‘Happy Cook’ to sort out the problem.
Which of the following answers best describes what should happen if the law is being followed?
 ‘Happy Cook’ is responsible for giving Olga a full refund.
 Barters Ltd are responsible for giving Olga a full refund.
 ‘Happy Cook’ is responsible for giving Olga a partial refund.
 Barters Ltd are responsible for giving Olga a partial refund.
(2 marks)
22 A PESTEL analysis is a useful way of understanding the external environment in which a business
or organisation is operating. Which ONE of the following is an example of a social or
demographic factor that can influence or constrain a business?
Increasing globalisation 
Changes in taxation levels 
An aging population 
(1 mark)

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Multi task questions
QUESTION ONE
Task 1
Which of the following statements relating to redundancy is true?
 Employees must have a minimum of one year’s service to qualify for redundancy.
 If an employer needs fewer workers at a new location, then this will be fair dismissal or
redundancy of the employees concerned.
 Employees must be under 65 years old in order to take redundancy.
 Pregnant employees cannot take redundancy because they will receive maternity benefit
instead.
(2 marks)
Task 2
Identify whether or not it is unlawful to discriminate against someone on the grounds of the following
characteristics.
Unlawful Not unlawful

Gender  
Age  
Nationality  
Religion  
(2 marks)
(Total = 4 marks)
QUESTION TWO
Background
M Co has decided to outsource its IT support to N Co.
Task 1
Identify which TWO of the following are disadvantages for M Co as a result of this decision.
 M Co will become a more complex organisation.
 Urgent IT issues at M Co may not be resolved as quickly.
 Ongoing IT costs of M Co may increase.
 Longer-term contracts with N Co will be prone to disruption.
(2 marks)

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Task 2
Fill in the gaps in the guidance about the Data Protection Act from the words listed below.
The Data Protection Act applies to organisations that hold personal data about data 1 _____.
The Act requires that information that is held about individuals should be 2 ____, 3 _____ and
4 ______.
(1)
 subjects
 users
(2)
 adequate
 sufficient
(3)
 reasonable
 relevant
(4)
 comprehensive
 not excessive
(2 marks)
(Total = 4 marks)
QUESTION THREE
Background
Amberley plc has identified the following as possibly significant stakeholders.
Task 1
Identify which FOUR of the following stakeholders are connected stakeholders.
 Pratish Gill, the company’s Chief Executive
 Pulborough plc, a major customer
 Petworth Limited, the Amberley’s principal supplier
 The Royal Welsh Bank, which made a 10-year $1 million loan to Amberley five years ago.
This loan is secured against Amberley’s property. Amberley has met all of its
commitments in the loan agreement.
 Brenda Towers, the MP in whose constituency Amberley’s head office is located
 Byworth Limited, a small business located next door to Amberley’s principal storage
depot. Amberley has generally maintained good relations with Byworth.
 Greenspace, a local pressure group concerned about Amberley’s activities
 Elm Lodge Mutual Fund, an institutional shareholder that has just purchased 10% of
Amberley’s share capital
(2 marks)

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Task 2
Use Mendelow’s classification to assess the importance of the following stakeholders, complete the
table by using the words High and Low.
Power Interest
Greenspace
Elm Lodge Mutual Fund
Byworth Limited
The Royal Welsh Bank
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Background
There are a number of ways of classifying stakeholders, including whether the organisation needs their
support to continue in business and whether their involvement with the organisation is voluntary or
involuntary (meaning that the stakeholders cannot withdraw from the relationship themselves).
Fulchester Rovers football club is seeking to build a new football ground on some open land at the
edge of Fulchester, to meet the requirements imposed by the football authorities that govern the
league in which Fulchester Rovers plays. The plan is controversial, as environmental pressure groups
claim that local wildlife will be disturbed. Fulchester Rovers’ fans are also unhappy because of the poor
transport links to the ground.
Task 1
Match the following groups of stakeholders with the principal objective that they are likely to have.
Employees Suppliers Shareholders Fans

High earnings growth    
Quality of football    
Prompt payment for goods    
Security of tenure    
(2 marks)
Task 2
Classify the following stakeholder groups according to whether Fulchester Rovers needs their support
to continue in business, and whether the stakeholders’ involvement with Fulchester Rovers is
voluntary.
Needs support Voluntary

Local wildlife  
Environmental pressure groups  
Fulchester Rovers’ fans  
League authorities  
(2 marks)
(Total = 4 marks)

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QUESTION FIVE
Task
Fill in the gaps in the definition of a contract from the words listed below.
A/an (1)________ supported by (2)______ from both parties and made with the intention to be
(3)_____ by parties who have the (4)_____ to make such an agreement.
(1)
 undertaking
 promise
 agreement
 transaction
(2)
 payment
 consideration
 commitment
 promises
(3)
 morally enforceable
 permanent
 for a specific timescale
 legally binding
(4)
 business resources
 economic capability
 legal capacity
 strategic opportunity
(Total = 4 marks)

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QUESTION SIX
Task 1
Which of the following are characteristics of public sector organisations?
Characteristic Not characteristic

Unlimited resources  
Accountability to the government  
Potentially unlimited demand for its services  
Funds can be obtained by raising taxes  
(2 marks)
Task 2
A member of staff at the call centre of a bank has printed out some of the information held
electronically about some of the company’s customers. He has ‘lent’ it to a friend of his so that he can
use it for marketing purposes. Which of the following legal factor(s) are involved in this action?
Involved Not involved
Criminal law  
Company law  
Employment law  
Data protection  
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk 2: T h e mac ro - e c o no mi c e n v i ro n men t 11
Chapter 2: The macro-economic environment

1 _______________________________________will be reached where aggregate supply =
aggregate demand.
Which of the following most accurately completes the sentence shown above?
 Full employment National Income
 Inflationary gap
 Equilibrium National Income
 Deflationary gap
(2 marks)
2 In which of the following situations does a ‘deflationary gap’ arise?

 When resources are fully employed
 When resources are unemployed
 When there is high unemployment and high inflation
 When there is low unemployment and low inflation
(2 marks)
3 If a country’s government has a positive net cash requirement, then which of the following are
true?
I The government’s income exceeds its expenditure
II The government’s expenditure exceeds its income
III The government is running a budget deficit
IV The government is running a budget surplus
 I and III
 I and IV
 II and III
 II and IV
(2 marks)
4 Which of the following taxes is an example of an indirect tax?

 Inheritance tax
 VAT
 Capital gains tax
(1 mark)

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12 2: T h e mac ro - e c o no mi c e n v i ro n men t A C C A BT Q ue s t ion Ba nk
5 Quantitative easing is a policy of which type of economic policy and what sort of time target
does it work in (short or medium term)?
 Monetary policy, works in the short term
 Monetary policy, works in the medium term
 Fiscal policy, works in the short term
 Fiscal policy, works in the medium term
(2 marks)
6 The total workforce of Ruritania is 17.3 million and the government has just announced that
unemployment has risen to 578,000. The rate of unemployment (to the nearest whole percent)
is:
 3%
 4%
 5%
(1 mark)
7 Classify the following as either injections into or withdrawals from the economy.
Injection Withdrawal
Savings  
Expenditure on imports  
Investment  
(2 marks)
8 Which of the following is NOT considered to be a function of taxation?

 A method which allows wealth and income to be re-distributed
 A method by which government income can be raised
 A method by which domestic industries can be protected from competition from abroad
 A method which causes interest rates to rise
(2 marks)
9 The government of Country XYZ sets monetary policies in order to reduce the rate of inflation to
a sustainable low level and has recently raised interest rates. Which of the following statements
about the impact of this monetary policy in Country XYZ is correct?
 The cost of borrowing in Country XYZ will increase if interest rates rise
 The cost of borrowing in Country XYZ will decrease if interest rates rise
 Profits of companies in Country XYZ will rise if interest rates rise
 Saving investments in Country XYZ will be less attractive if interest rates rise
(2 marks)

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A C C A BT Q ue s t ion Ba nk 2: T h e mac ro - e c o no mi c e n v i ro n men t 13
10 Which of the following is NOT an element of fiscal policy?

 Interest rates
 Borrowing
 Revenues
 Expenditure
(2 marks)
11 A period of high inflation would be most detrimental to which of the following groups?
 A company that has stockpiled product
 Organisations with long-term receivables
 Home owners with large mortgages
(1 mark)
12 Which TWO of the statements shown below are NOT true?

Exchange rates are not an element of monetary policy 
Interest rates are not an element of monetary policy 
Frictional unemployment is short-term in nature 
Seasonal unemployment is short-term in nature 
(2 marks)

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14 2: T h e mac ro - e c o no mi c e n v i ro n men t A C C A BT Q ue s t ion Ba nk
Multi task question

QUESTION ONE
Task 1
Identify whether the following types of unemployment are long-term or short-term in nature.
Unemployment category Long-term Short-term

Frictional  
Structural  
Seasonal  
Technological  
(2 marks)
Task 2
If the exchange rate falls between the British Pound and the Euro, identify whether the following are
TRUE or FALSE.
True False
Imports become more expensive to the UK  
Imports become cheaper to the UK  
Exports become more expensive to countries that use the Euro  
Exports become cheaper to countries that use the Euro  
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk 3: T h e mi c ro -e c o n o mi c e n v i ro n me n t 15
Chapter 3: The micro-economic environment

1 Which of the following factors determine the demand for a good?
I The price of the good
II The cost of making the good
III The price of substitute goods
IV Tastes and fashion
 I, II and IV
 II, III and IV
 I, II and III
 I, III and IV
(2 marks)
2 The law of demand represents the quantities of a good or service that consumers are willing
and able to purchase at various prices. Are the following statements relating the implications of
the Law of Demand true or false?
True False
The demand curve is downward sloping  
The demand curve shows an inverse relationship between price and  
quantity demanded
The demand curve has a negative slope  
(2 marks)
3 The graph below shows the quantity of a product that is demanded at different price levels.
Demand curve
7
6
5
Price ($)
4
3
2
1
0
3Kg 6Kg 9Kg
Series 1 6 4 2

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16 3: T h e mi c ro -e c o n o mi c e n v i ro n me n t A C C A BT Q ue s t ion Ba nk
If the price of the product is reduced to $3, what is the estimated quantity demanded?
 3.0 Kg
 4.5 Kg
 6.0 Kg
 7.5 Kg
(2 marks)
4 With reference to the following graph, what is the equilibrium price of Product X?
£350
£300
£250
£200
Series 1
£150 Series 2
£100
£50
£0
Quantity
 £100
 £200
 £300
(1 mark)

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5 Study the following graph:
£350
£300
£250
£200
Series 1
£150 Series 2
£100
£50
£0
Quantity
If the Government were to set a maximum price of £250 for Product X, which of the following
would happen?
 There would be excess demand over supply
 There would be excess supply over demand
 Market failure
 Market equilibrium
(2 marks)
6 Product A has a complementary product - Product B - and a substitute product - Product C.

Which of the following would cause the demand curve of Product A to shift to the left?
 A fall in direct tax on incomes
 A fall in the price of Product A
 A decrease in the price of Product B
 A fall in the price of Product C
(2 marks)
7 Cars and tyres are examples of:

 Substitutes
 Complements
 Unrelated products
(1 mark)

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8 If demand for Product X falls as household incomes rise, Product X is known as which of the
following?
 Substitute good
 Complementary good
 Inferior good
 Superior good
(2 marks)
9 The responsiveness of the demand for a product to changes in household income is known as:
……………………………………………………………………………………………………….
Which of the following correctly completes the sentence above?
 Household elasticity of demand
 Product elasticity of demand
 Price elasticity of demand
 Income elasticity of demand
(2 marks)
10 A store sells 1,000 units of Product MR in a quarter and 1,200 units of the same product in the
following quarter when household income is 25% higher.
Is the following statement TRUE or FALSE?
True False
The income elasticity of demand of Product MR is 1.25  
(1 mark)
11 A store sells 1,000 units of Product LW in a quarter and 1,200 units of the same product in the
Is the following statement TRUE or FALSE?
True False
The demand for Product LW is said to be income elastic.  
(1 mark)
12 A store sells 1,000 units of Product LBR in a quarter and 1,200 units of the same product in the
Product LBR can be described as what type of good?
 Necessity
 Complementary
 Inferior product
 Luxury product
(2 marks)

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13 Which of the following statements about Jaguar E-types (expensive classic cars) is true?
 Their income elasticity of demand is negative
 Their income elasticity of demand is between 0 and 1
 Their income elasticity of demand is greater than one
(1 mark)
14 Product LBR is sold for $1.50 during September. It is expected that the demand for this product
will fall in October from 28,000 to 21,000 units when the price is raised to $1.80.
What is the point elasticity of demand when the price is $1.50?
Answer_____________________________________________
(1 mark)
15 The price mechanism brings demand and supply of a product into equilibrium and identifies the
equilibrium price. The equilibrium price is also known as the:
 Equal price
 Market clearing price
 Cost-plus price
(1 mark)
16 British tourists are responsible for the high demand for hotel rooms in St Petersburg, Russia
during July and August.
Which TWO of the following would lead to a decrease in the demand for hotel rooms in
St Petersburg during the summer months?
Fall in the value of the Russian Rouble 

Fall in the value of British Sterling 
Fall in the price of flights to St Petersburg 
Increase in the price of flights to St Petersburg 
(2 marks)
17 Which of the following statements regarding the CAP (Common Agricultural Policy) is NOT true?
 It guarantees a maximum price above the market equilibrium price
 It encourages an excess of agricultural goods to be supplied
 It guarantees a minimum price above the market equilibrium price
(1 mark)

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18 Which one of the following is NOT one of Porter’s five competitive forces?
 Threat of substitutes
 Bargaining power of customers
 Threat of new entrants
 Bargaining power of Government bodies
(2 marks)
19 ABC sells mobile telephones. Each phone sold is supplied with a charger, earpiece, car charger
and other accessories which can only be used with ABC Co phones. Its predictive text style is
also very different to that of other manufacturers.
To which of Porter’s five forces is this strategy intended to respond?
 Bargaining power of suppliers
 Bargaining power of customers
 Threat of new entrants
 Intensity of competitive rivalry (2 marks)
20 In relation to how cloud computing can be used by a finance department, which of the following
statements is NOT true?
 It ensures that confidential financial information is maintained securely
 It can facilitate off-shoring of the finance department
 It can allow the finance department to work more flexibly which may improve morale
 It enables collaboration between finance professionals who are geographically diverse
(2 marks)
21 “The speed of data creation is exponentially greater than it was even just a few years ago.
An organisation needs to process data within a reasonable time frame.” This statement
describes the Big Data characteristic of .
Please select a term from the list below to complete the sentence above.
Veracity Volume Visibility
Velocity Variety Variability
(2 marks)
22 Big Data enables managers to measure results, and therefore know more about their
businesses. This should lead to:
 Reduced spend on IT
 Reduced need for marketing staff
 Better decision making and business performance
 Increased power for managers
(2 marks)

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23 Match the following two explanations to the appropriate technological development.
Process automation
Artificial intelligence
Options
The use of robots to carry out low level, repetitive tasks
The use of machines in decision-making
(2 marks)

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QUESTION ONE
Task 1
Which of the following statements about price elasticity are correct?
Correct Incorrect
It is defined as the percentage change in price divided  
by the percentage change in demand.
An item which has price elasticity greater than one is  
price insensitive.
An item that has an elasticity of less than one is said to  
be inelastic.
If demand for an item is inelastic and its price falls,  
total revenue will decrease.
(2 marks)
Task 2
Are the following probable consequences of a rise or fall in interest rates?
Rise Fall
A rise in the demand for consumer credit  
A rise in business investment  
A rise in the exchange rate  
A rise in the demand for housing  
(2 marks)
(Total = 4 marks)

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QUESTION TWO
Task 1
Study the following graph:
£350
£300
£250
£200
Series 1
£150 Series 2
£100
£50
£0
Quantity
If the Government was to set a maximum price of £150 for Product X, which TWO of the
following would be true?
The quantity of Product X supplied would increase 

The quantity of Product X supplied would decrease 
The quantity of Product X purchased would increase 
The quantity of Product X purchased would decrease 
(2 marks)
Task 2
Are the following statements TRUE or FALSE?
True False
Inferior goods have a negative income elasticity of demand  
Elastic goods are luxuries and have an income elasticity of  
demand of 1
(2 marks)
(Total = 4 marks)

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QUESTION THREE
Background
DEF Co supplies a patented bottled sauce through supermarkets and independent food shops
throughout the world.
Task 1
Which TWO of the following statements relating to monopolies are NOT true?
 Monopolists are price takers.
 Monopolists charge higher prices than perfectly competitive firms.
 Monopolists produce lower levels of output than perfectly competitive firms.
 Monopolists cannot earn supernormal profits in the long-term.
(2 marks)
Task 2
Identify whether the following would be significant barriers to entry in DEF Co’s industry.
Yes No
Supplier concentration  
Access to distribution channels  
Economies of scale  
Industry growth rate  
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Task 1
Categorise the following features of a business’s environment under the relevant category in the PEST
framework.
Political Economic Social Technological

Home working    
Foreign exchange markets    
Consumer protection    
Business spending on research    
(2 marks)

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Task 2
State whether or not markets with the following features could be perfectly competitive.
Perfectly competitive Not perfectly competitive

Firms are price takers.  
There is a small number of significant  
producers.
There are significant differences between  
the products each producer offers.
The Internet means that information  
about the prices set by all producers is
readily available.
New entrants need to commit significant  
financial resources to be successful in the
industry.
It is possible for firms to gain a significant  
advantage by introducing new
technologies.
Firms in the industry operate an unofficial  
system of price maintenance to keep profit
levels at a reasonable level.
There is considerable movement of labour  
between firms operating in the industry.
(2 marks)
(Total = 4 marks)

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26 4: O rg an i s at i o n al s t ru c t u re A C C A BT Q ue s t ion Ba nk
Chapter 4: Organisational structure

1 Which of the following is NOT an advantage of the informal organisation for managers?
 Knowledge sharing
 Responsiveness
 Co-operation
 Compliance
(2 marks)
2 According to Mintzberg, the means of co-ordination preferred by the ‘strategic apex’ is:
 Direct supervision
 Mutual adjustment
 Standardisation of output
 Standardisation of skills
(2 marks)
3 What is the main advantage of geographic departmentation?

 Expertise can be pooled
 It avoids duplication
 Poor co-ordination is avoided
 There is local decision making
(2 marks)
4 Which of the following terms is NOT used by Mintzberg in his description of the components of
all organisations?
 Operating staff
 Middle Line
 Strategic Apex
 Technostructure
(2 marks)
5 Which TWO of the following activities are indicative of an organisation which is ‘delayering’?
Decreasing average span of control 

Increasing average span of control 
Increasing the number of middle management redundancies 
Increasing management levels 
(2 marks)

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A C C A BT Q ue s t ion Ba nk 4: O rg an i s at i o n al s t ru c t u re 27
6 Which of the following is NOT one of the classifications of the Anthony hierarchy?
 Middle management
 Strategic management
 Tactical management
 Operational management
(2 marks)
7 If an organisation were to group together employees who carry out similar tasks, this would be
known as:
 Functional departmentation
 Geographic departmentation
 Product/brand departmentation
(1 mark)
8 Which of the following statements is correct?

 Centralisation leads to greater co-ordination and flexibility but less control
 Centralisation leads to greater co-ordination and control, but less flexibility
 Centralisation leads to greater co-ordination, control and flexibility
 Centralisation leads to greater co-ordination, but to less control and flexibility
(2 marks)
9 Which ONE of the following features of organisational structure is NOT associated with
flexibility and adaptability?
 Matrix
 Scalar chain
 Horizontal
(1 mark)
10 The ‘span of control’ refers to:

 The geographical dispersal of employees working for a manager
 The number of employees working for a manager
 The ability of the employees working for a manager
(1 mark)
11 With reference to Anthony’s hierarchy of goals in an organisation at the tactical level, identify
which ONE of the following statements are true?
True False
The tactical roles are Guardian and Advisor roles  
Co-ordinators are responsible for implementing decisions  
Guardians ensure that the decision is implemented within the time  
and budget specified at the tactical level
(2 marks)

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12 In the value chain, the activities that are directly related to production, sales, marketing,
delivery and service are known as:
 Operational activities
 Support activities
 Primary activities
 Secondary activities
(2 marks)
13 In the value chain, the activities that are directly related to procurement, technology
development, human resource management and firm infrastructure are known as:
 Operational activities
 Support activities
 Primary activities
 Secondary activities
(2 marks)
14 Which of the following is a primary activity in Porter’s value chain model?

 Procurement
 Outbound logistics
 Technology development
 Firm infrastructure
(2 marks)

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QUESTION ONE
Background
William Limited is an organisation with a strongly traditional outlook. It is structured and managed
according to classical principles: specialisation, the scalar chain of command, unity of command and
direction. Personnel tend to focus on their own distinct tasks, which are strictly defined and directed.
Communication is vertical rather than lateral. Discipline is much prized and enshrined in the rule book
of the company.
Task 1
Identify which TWO of the following statements are NOT true.
 Swift decisions are likely to be made at William Limited.
 Using Handy’s classification, William Limited has a role culture.
 William Limited is organised in a matrix structure.
 Employees at William Limited are likely to have precise job descriptions and clearly
delegated authority.
(2 marks)
Task 2
With reference to Anthony’s hierarchy of goals in an organisation at the strategic level, identify
whether the people described below are Rule Providers, Experts or Advisors.
Rule Providers Experts Advisors
Provide input and analysis to ensure   
that decisions are made with the best
available information
Provide extra or specialised information   
if it is required
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Which TWO of the following are considered to be advantages of centralisation?
 Quicker decisions are made.
 Standardisation will be increased.
 Motivation of junior managers is likely to increase.
 Most decisions will be made by local staff with operating expertise.
(2 marks)

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Task 2
With reference to Anthony’s hierarchy, state whether the following individuals are operating at a
strategic, tactical or operational level.
Strategic Tactical Operational

Owen, who deals with customers with   
queries in a local branch
Mark, who uses his marketing expertise   
to advise on how the branch network
should develop
Sasha, a senior management accountant   
who compares branch performance with
budgeted performance and investigates
variances
Sunil, a regional manager with a number   
of local branch managers reporting to
him, who is responsible for the overall
performance of his region
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Which TWO of the following are features of informal networks?
 They undermine organisational structures.
 They directly support management objectives.
 They develop spontaneously.
 They reflect patterns of power and influence.
(2 marks)
Task 2
Match the following business features to the type of organisation where they are likely to apply.
Entrepreneurial Functional Matrix Divisional

Head office has limited role,    
mainly offering support
services
Culture created by business    
founder
Organisation is based on    
tasks involved in projects
Individuals’ influence    
depends on the roles they
have rather than their
personal qualities
(2 marks)
(Total = 4 marks)

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QUESTION FOUR
Task 1
Identify which TWO of the following are advantages of a matrix organisation structure.
 It allows for a mix of skills and expertise.
 Authority over staff is clearly defined.
 It facilitates managers being held responsible for end results.
 It is simpler than a functional structure.
(2 marks)
Task 2
Identify which statements in relation to organisation structure are TRUE and which are FALSE.
True False
Functional organisations are normally fluid with rapid  
information flows.
In a matrix organisation, it is possible for an individual to  
have several line managers.
Small, simple, companies dominated by one person do not  
have a succession problem as they are limited companies.
In a divisional structure each division is largely  
autonomous.
(2 marks)
(Total = 4 marks)
QUESTION FIVE
Task 1
Which TWO of the following characteristics does the entrepreneurial structure have?
Wide span of control 

Maximum hierarchy 
Narrow span of control 
Minimal hierarchy 
(2 marks)

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Task 2
Annelise, Louise, Abi and Hayley all work for P&P Ltd. Annelise works in the finance department and
Louise works in the human resources department. Abi is Hayley’s line manager in the administration
department.
Which member(s) of staff have access to information relating to employee salaries?
Access No access
Annelise  
Louise  
Abi  
Hayley  
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk Ch ap t e r 5: O rg an i s at i o n al c u lt u re an d c o mmi t t e es 33
Chapter 5: Organisational culture and committees

1 What are the four Ps of the marketing mix?
 Product, price, profit, promotion
 Product, place, profit, promotion
 Product, place, price, profit
 Product, place, price, promotion
(2 marks)
2 Culture can be defined as the ‘the collection of traditions, values, policies, beliefs and attitudes
that constitute a pervasive context for everything we do and think in an organisation.’ Who is
this definition attributed to?
 Mullins
 Maslow
 Schein
 Schwartz & Davies
(2 marks)
3 Harrison and Handy identified four different types of culture: Power; Role; Task; and Person.
With regard to the above, this type of culture is controlled by a key figure and suits smaller
organisations where there is little conflict between employees.
 Power
 Role
 Task
 Person
(2 marks)
4 Research carried out indicated that the workforce of Country X displayed behaviour which was
dominated by assertiveness, competitiveness and decisiveness, whereas that of Country Z
placed a high value on the quality of life and personal relationships.
Which ONE of the four main cultural dimensions of Hofstede’s model are demonstrated in the
scenario above?
 Power distance
 Uncertainty avoidance
 Individualism
 Masculinity / femininity
(2 marks)

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34 2: Ch ap t e r 5: O rg an i s at i o n al c u lt u re an d co mmi t t e es A C C A BT Q ue s t ion Ba nk
5 Which of the following departments are involved in managing the employees of an

organisation?
 Sales department
 Human resources department
 Administration department
(1 mark)
6 Which of the following is NOT part of the management accounting function?

 Planning
 External reporting
 Decision making
 Control
(2 marks)
7 In order to ensure that an organisation obtains employees with appropriate qualifications and
skills, which part of the human resource cycle is relevant?
 Selection
 Performance
 Rewards
 Training and development
(2 marks)
8 Ilya is the union representative at Acorn College. He is also head of studies responsible for the
recruitment and appraisal of lecturing and administrative staff. The union is in dispute with the
government over teaching salaries and staffing levels.
What phenomenon is Ilya experiencing?
 Role ambiguity
 Role conflict
 Role overlap
 Role duplication
(2 marks)
9 Which of the following is a DISADVANTAGE of using a committee rather than an individual to

make a decision?
 Slower decisions
 Autocratic decisions
 Unworkable decisions
(1 mark)

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10 Handy identified four different types of culture: Power; Role; Task; and Person.
With regard to Handy, this type of culture is slow-to-change, more formal, less personal and
rather bureaucratic.
 Power
 Role
 Task
 Person
(2 marks)
11 Organisational culture has been defined by whom as ‘a pattern of beliefs and expectations
shared by the organisation’s members, and which produce norms which powerfully shape the
behaviour of individuals and groups in the organisation.’
 Hofstede
 Maslow
 Schein
 Schwartz & Davies
(2 marks)
12 According to Schein, there are three different levels at which culture can be understood.
The ‘observable, expressed or explicit elements of culture’ are to be found at which level?
First level 
Second level 
Third level 
(1 mark)

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36 2: Ch ap t e r 5: O rg an i s at i o n al c u lt u re an d co mmi t t e es A C C A BT Q ue s t ion Ba nk

QUESTION ONE
Task 1
Identify whether the following statements relating to marketing are TRUE or FALSE.
True False
The main function of marketing is to maximise sales volume.  
The four Ps of the marketing mix are product, price, profit and promotion.  
(2 marks)
Task 2
Which FOUR of the following are key cultural factors identified by Hofstede?
 Strategic apex
 Power distance
 Individualism
 Technostructure
 Uncertainty avoidance
 Long-term orientation
 Social needs
 Interpersonal relations
(2 marks)
(Total = 4 marks)
QUESTION TWO
Background
The following dimensions are used by Hofstede to classify types of organisational behaviour.
1 High 2 Low
A Masculinity
B Individualism
C Uncertainty avoidance
D Power distance
E Long-term orientation
Consider the following organisations.

Company A is a long-established department store. Major decisions are made by the board and each
floor is organised according to a strict hierarchy, with managers and supervisors on each floor. Junior
staff on each floor have no input into decision-making. Staff roles are strictly defined.
Company B is an IT consultancy founded by a group of IT specialists who had previously worked
together in a larger company. Each consultant is expected to take responsibility for his or her own
consultancy work. Although one of the group has been appointed as Chief Executive, staff meetings
work on the principle of “one person, one vote” with everyone being expected to contribute to
discussions.

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Company C is a financial services company that was fined by its regulator a couple of years ago. Since
then the company has tightened up its procedures. All staff are briefed on the rules they are expected
to follow and are expected to record thoroughly all dealings with the general public. Mechanisms exist
for staff to raise queries and report other staff whose behaviour appears doubtful.
Company D is a prep school which is owned by its Head Teacher. All the principal decisions are made
by the Head Teacher. A number of staff, both male and female, have been at the school for a long
time. During term time staff are expected to work long hours and undertake a wide range of duties,
including, if necessary, covering for colleagues.
Task
For the four companies described, select which combination of dimensions apply from the Hofstede
grid (for example, A1).
Company A _________________________________________________________
Company B _________________________________________________________
Company C _________________________________________________________
Company D _________________________________________________________
(Total = 4 marks)
QUESTION THREE
Task 1
Match the description with the type of culture identified by Handy.
Power Role Task Person
A strong team that solves problems, is    
flexible and whose main aim is to get
the job done
Strong central control of a small    
organisation by a single key figure
A stable, rational, organisation, with a    
bureaucratic culture and an authority
system based on position and function
An organisation designed to serve the    
interests of the staff within it, with
managers acting as facilitators
(2 marks)
Task 2
Identify which of the following features of the marketing mix relate to goods and services and which
only relate to services.
Goods and services Services only
Physical evidence  
Promotion  
People  
Place  
(2 marks)
(Total = 4 marks)

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38 6: G o v e rn an c e a n d s o ci al re s p on s i b il i t y A C C A BT Q ue s t ion Ba nk
Chapter 6: Governance and social responsibility

1 The honesty an organisation demonstrates with its employees, customers and suppliers is known as:
 Independence
 Accountability
 Integrity
(1 mark)
2 The usual purpose of codes of practice on corporate governance is to:

 Establish legally-binding requirements for all companies to adhere to
 Provide a comprehensive framework for administration and management
 Provide guidance on the standards of best practice for companies to adopt
(1 mark)
3 Which of the following are disadvantages of non-executive directors?

I They provide a narrower perspective than executive directors
II They are less able to reassure third parties including shareholders
III They are able to be more independent than the full board members
 I only
 II only
 III only
 None of the above
(2 marks)
4 If a company allows a situation to develop and remain unresolved until the public or the
government, for example, discover it, this is known as:
 Proactive strategy
 Reactive strategy
 Defence strategy
 Accommodation strategy
(2 marks)
5 What is implied by a ‘defence strategy’?

 A company is prepared to take full responsibility for its actions, for example, by recalling
a product as soon as it discovers a fault
 A company tries to reduce or avoid further obligations which may arise from a specific
problem/fault with a product
 A company will allow a specific problem/ fault to remain in place until another party finds
out about it
 A company will take responsibility for its actions only when it is encouraged to do so or if
it believes that by not doing so, the Government will intervene
(2 marks)

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A C C A BT Q ue s t ion Ba nk 6: G o v e rn an c e a n d s o ci al re s p on s i b il i t y 39
6 Who makes up the audit committee of a company?

 Executive directors only
 Non-executive directors only
 Both executive and non-executive directors
(1 mark)
7 With respect to the relationship between law, governance, social responsibility and ethics,
complete the following table, identifying whether the statements made are TRUE or FALSE.
True False
Public listed companies and limited companies are regulated by  
corporate governance
Social responsibility only needs to be considered by a company if it  
employs more than 1,000 employees worldwide
Only public listed companies must demonstrate consideration of  
corporate governance guidance
Adopting an ethical position or not depends on the size of the company  
concerned
(2 marks)
8 The majority of corporate governance reports are based on four main principles. Which of the
following is not one of the main principles of corporate governance?
 Integrity
 Accountability
 Confidentiality
(1 mark)
9 Which of the following measures will help an organisation to limit its environmental impact?
1 Recycling waste
2 Using energy efficient electrical appliances
3 Selecting suppliers carefully
4 Buying raw materials locally
 1 and 2 only
 2 and 4 only
 1 and 3 only
 1, 2, 3 and 4
(2 marks)
10 YYY Limited is an organisation which tends to respond differently to its various social
responsibility objectives, by taking into account the views of stakeholders. With respect to the
Agency theory, YYY Limited is adopting which type of strategy?
 Proactive
 Reactive
 Accommodation
(1 mark)

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40 6: G o v e rn an c e a n d s o ci al re s p on s i b il i t y A C C A BT Q ue s t ion Ba nk
QUESTION ONE
Task 1
Identify whether the following statements relating to non-executive directors are TRUE or FALSE.
True False
One of the main disadvantages of non-executive directors is  
the limited time that they have to attend to the company’s
affairs.
Only non-executive directors should staff the audit committee  
of a company.
(2 marks)
Task 2
Identify which of the following would be the responsibilities of a Chairman of a meeting and which
would be the responsibilities of a Secretary.
Chairman Secretary
Allocating discussion time for each item on the agenda  
Advising committee members of the deadlines of submitting  
items for the agenda
Informing committee members of the date, time and place of  
the next meeting
Advising committee members of the terms of reference for  
the meeting
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
For key areas involving conflicts of interest, the board of directors should establish sub-committees
made up of non-executive directors only. Which of the following committees should be made up of
non-executive directors only?
Non-executives Non-executives and

only executives
Remuneration  
Social responsibility  
Risk  
Audit  
(2 marks)

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A C C A BT Q ue s t ion Ba nk 6: G o v e rn an c e a n d s o ci al re s p on s i b il i t y 41
Task 2
Select from the following if a feature or not a feature of corporate governance.
Feature Not a feature

Emphasis on short-term profitability  
Lack of independent scrutiny  
Regular meetings with institutional shareholders  
Domination by a single person or small group  
(2 marks)
(Total = 4 marks)
QUESTION THREE
Background
There are four different strategies a company may adopt in relation to its corporate social objectives.
Task
State what kind of strategy a business is adopting if it does the following.
Proactive Reactive Defensive Accommodation
Issues widely-drawn disclaimers of    
responsibility for faults with products
Only deals with problems with products    
when complaints are made by consumers
Withdraws a whole range of products    
from sale when a fault is found with one
product in the range
Has regular meetings with consumer    
groups and makes changes to the product
specification in the light of the feedback
from these meetings
(4 marks)
(Total = 4 marks)

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42 7: Sys t e ms , c o n t ro ls an d c o mp l i an c e A C C A BT Q ue s t ion Ba nk
Chapter 7: Systems, controls and compliance

1 ABC Ltd is required by law to file a copy of its accounts so that they are available to the public.
Where are the copies of ABC Ltd’s accounts filed?
 HM Revenue & Customs
 Companies House
 Company Head Office
(1 mark)
2 ‘When a company produces monthly management accounts, they must comply with both
company law and accounting standards.’
Which of the following regarding the above statement is true?
 This statement is true, management accounts must comply with both company law and
accounting standards.
 This statement is false, management accounts must only comply with company law (not
accounting standards).
 This statement is false, management accounts must only comply with accounting
standards only.
 This statement is false, management accounts do not need to comply with either
company law or accounting standards.
(2 marks)
3 What is a ‘qualified’ audit report?

 An audit report which has been prepared by a qualified accountant.
 An audit report which is prepared when the company’s auditors believe the accounts
show a true and fair view and have been properly prepared in accordance with company
legislation.
 An audit report which is prepared when the company’s auditors believe the accounts do
not show a true and fair view and/or have not been properly prepared in accordance
with company legislation.
(1 mark)
4 The preparation and filing of annual accounts by limited companies is a requirement of:
 International Accounting Standards
 Codes of corporate governance
 HM Revenue & Customs
 National legislation
(2 marks)

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A C C A BT Q ue s t ion Ba nk 7: Sys t e ms , c o n t ro ls an d c o mp l i an c e 43
5 What is the name given to the term which signifies the rules (from company law, accounting
standards (UK and International) and Stock Exchange requirements) which govern accounting?
 GAAP
 UITF
 FRRP
 IFRS
(2 marks)
6 What is the name of the body that regulates the UK Accounting and Finance profession?
 Financial Responsibility Committee
 Financial Responsibility Council
 Financial Reporting Council
(1 mark)

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44 7: Sys t e ms , c o n t ro ls an d c o mp l i an c e A C C A BT Q ue s t ion Ba nk
Multi task question
QUESTION ONE
Task 1
Identify whether an organisation’s monthly management accounts and annual financial accounts must
comply with company law and/or accounting standards by completing the table below.
Company law Accounting standards
Monthly management accounts  
Annual financial statements  
(2 marks)
Task 2
Identify whether the following tasks would be carried out by a business’s management accounting,
financial accounting or treasury functions.
Financial Management Treasury
accounting accounting
Preparing forecasts of cash requirements   
Investment appraisal   
Analysis of profit centre performance   
Arranging a bank overdraft facility   
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk 8: Co n t ro l , se c u ri t y a n d a u d i t 45
Chapter 8: Control, security and audit

1 Which of the following statements about internal auditors is true?
 Internal auditors report on the truth and fairness of the accounts of the company that
they are auditing and work for.
 Internal auditors report on the effectiveness of the internal control systems of the
company that they are auditing, which is not the same company that they work for.
 Internal auditors report on the effectiveness of the internal control systems of the
company that they are auditing and work for.
 Internal auditors report on the truth and fairness of the accounts of the company that
they are auditing, which is not the same company that they work for.
(2 marks)
2 The internal audit department of Salisbury plc should report to which of the following?
 The Finance Director of Salisbury plc
 The shareholders of Salisbury plc
 The Chief Executive of Salisbury plc
 The audit committee of the board of directors of Salisbury plc
(2 marks)
3 Ben Beaumont conducts a systematic review of dispatch notes.

Which of the following does the above test of control relate to?
 Distribution
 Credit limits
 Goods inwards
(1 mark)
4 ABC Ltd has the following departments: Goods inwards, Purchasing, Stores, Production and
Finance. The stores department has completed a purchase requisition in order to replenish
Product X which is running low.
An appropriate supplier of Product X will be found by which of the following departments?
Goods inwards 
Purchasing 
Stores 
Production 
Finance 
(2 marks)

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46 8: Co n t ro l , se c u ri t y a n d a u d i t A C C A BT Q ue s t ion Ba nk
5 What is the name given to a list of all the assets owned by an organisation and all the liabilities
owed by the same organisation on a given date?
 Income statement
 Statement of financial position
 Net asset statement
(1 mark)
6 The purchasing department is NOT responsible for which of the following procedures?
 Determining the best supplier for the goods requisitioned by the stores department.
 Ordering the goods requisitioned by the stores department from the most appropriate
supplier of the goods.
 Negotiating a discount, if possible, with the supplier.
 Paying the supplier once the goods have been received.
(2 marks)
7 The most important accounting control for detecting the occurrence of fraud and error in
relation to the petty cash and the bank of an organisation is:
 Authorisation
 Custody
 Recording
 Reconciliation
(2 marks)
8 Any action taken by management to enhance the likelihood that established objectives and
goals will be achieved is known as what?
 Internal control
 Internal audit
 Internal check
 Internal review
(2 marks)
9 The different types of internal controls in an organisation can be remembered by SOAPSPAM.

The two Ps in this mnemonic stand for:
P………………………………………………………..
P………………………………………………………..
(2 marks)
10 The different types of internal controls in an organisation can be remembered by SOAPSPAM.

The O and the M in this mnemonic stand for:
O………………………………………………………..
M………………………………………………………..
(2 marks)

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11 Are the following statements TRUE or FALSE?

True False
Internal audit is part of the internal control system of an organisation.  
Internal audits are carried out for the purpose of reporting to the  
shareholders of an organisation.
External audits examine the published accounts of an organisation and  
the report their findings in the form of an audit report.
Internal audit is part of the external audit system  
(2 marks)
12 If an auditor wishes to obtain evidence that the internal controls of an organisation are working
satisfactorily, what sort of tests will he wish to carry out?
Yes No
Compliance tests  
Substantive tests  
(1 mark)
13 When carrying out an audit, what is the main aim of substantive testing?
 To reduce the amount of compliance testing if the substantive testing is successful.
 To identify any errors or omissions in the accounts.
 To provide evidence that the internal controls of the organisation are working effectively.
 To provide ‘value for money’.
(2 marks)
14 Management audits, efficiency audits and ‘value for money’ audits are also known as:
 Compliance audits
 Systems audits
 Operational audits
(1 mark)
15 ABC Audit Company are carrying out the audit of Elms & Co Ltd’s financial accounts. The audit
manager asks the Finance Director of Elms & Co Ltd for evidence of the work of the internal
auditors of the company. The Finance Director explains that they don’t bother writing down any
of the internal audit work done by the internal audit department but explains the type of work
that they do on a regular basis and that the results are sufficient to see that the control systems
in place are working really well.
Can the audit manager of the ABC Audit Company rely on the Finance Director’s assertions that
control systems are working well and therefore reduce the amount of substantive testing
required to be done?
Yes 
No 
(1 mark)

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16 What is an audit trail?

 A system of protecting data from accidental or deliberate threats.
 A system which shows personnel who have accessed a computer system and logs any
changes that have been made.
 A process whereby regular back-ups of data are made automatically.
 A method of auditing an organisation’s computer system by taking regular back-ups.
(2 marks)
17 What is the primary purpose of an external audit?

 To review the work of the internal audit department.
 To carry out compliance and substantive tests.
 To report any errors in the accounting records to the shareholders.
 To give an opinion on whether the financial statements of an organisation give a true and
fair view of the accounting records of the organisation.
(2 marks)
18 Are the following statements TRUE or FALSE?
True False
Only internal auditors can review the controls of the organisation  
they are auditing.
External auditors cannot rely on the work of internal auditors, but  
internal auditors can rely on the work of external auditors.
External auditors can review the controls of the organisation they  
are auditing.
External auditors can rely on the work of internal auditors provided  
that it has been proved worthy of having such reliance placed on it.
(2 marks)
19 Which of the following groups/individuals are the internal auditors of an organisation likely to
report to?
 Finance Director
 Audit Manager
 Board of directors
 Shareholders
(2 marks)
20 Which of the following groups/individuals are the external auditors who are auditing an
organisation likely to report to?
 Finance Director
 Audit Manager
 Board of directors
 Shareholders
(2 marks)

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21 Which of the following is the reason substantive tests are used in the context of external audit
of financial accounts?
 To establish whether a figure is appropriate
 To investigate why a figure is incorrect
 To assess whether a figure should be included
 To determine why a figure is excluded
(2 marks)
22 ABC Co has a system which records details of orders received and goods despatched, invoices
customers and allocates remittances to customers.
What type of system is this?
 Management information system
 Decision support system
 Knowledge management system
 Transaction processing system
(2 marks)
23 James conducts a systematic review of suppliers’ delivery notes.

Which of the following does the above test of control relate to?
 Distribution
 Credit limits
 Goods inwards
(1 mark)
24 Against which TWO of the following does cybersecurity protect?

 Disruption of business operations by misdirection of computer systems
 Theft of data held by the company by hackers
 Misuse of company data by employees
 Failure by employees to implement IT controls

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(2 marks)
QUESTION ONE
Background
The management of Paulted Limited is reviewing the company’s computer systems after an attempted
fraud. Managers are considering a number of additional controls to try to prevent fraud in the future.
Task 1
Identify which of the following is a general control and which of the following is an application control.
General Application
Limit checks on amounts input  
Insisting staff change their password every 30 days  
Production of a list of all transactions processed for  
management review
Forbidding staff to take laptops away from the company’s  
premises
(2 marks)
Task 2
Controls can be classified in a number of different ways. A commonly-used classification is as follows.
A Organisation
B Authorisation
C Personnel
D Segregation of duties
E Physical
F Arithmetic
G Supervisory
H Management
Match the controls given below to a control type listed above.
I Security staff being based at the main entrance to the company’s premises.
II The main board of a company reviewing reports from divisional managing directors at
every board meeting.
III The company operating a bonus scheme that clearly links reward with extra effort.
IV The main board of a company being required to approve major capital investment
expenditure above a certain amount
(2 marks)
(Total = 4 marks)

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QUESTION TWO
Background
Phil and Jill carry out audit work at Hightower Limited. Phil is an employee of Hightower, whereas Jill is
an employee of an accountancy practice that Hightower uses to audit its financial statements.
Task 1
Identify which of Phil and Jill is the internal auditor.
 Phil
 Jill
(1 mark)
Task 2
State which of the following tasks would be the responsibility of Phil, which would be the responsibility
of Jill, which would be the responsibility of both Phil and Jill and which would be the responsibility of
neither.
Phil Jill Both Neither

Assessing whether the financial    
statements comply with international
financial reporting standards
Reviewing the security controls over    
Hightower’s IT systems
Carrying out a value-for-money audit    
of Hightower’s operations.
Signing the audit report on    
Hightower’s accounts
Investigating possible theft of    
inventory from Hightower’s stores
Reporting to Hightower’s    
management weaknesses in internal
control found during the course of
the audit work
(3 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Identify which of the following are purposes of compliance testing.
Purpose Not a purpose

Identifying errors and omissions in accounts  
Obtaining evidence that the internal controls of an  
organisation are working satisfactorily
(2 marks)

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Task 2
Identify which area of the business is likely to have the following controls in place.
Bank and Credit
cash Purchasing Stores control
Dispatch of goods only on receipt    
of a sales order
Comparison of bank paying-in slips    
against records of monies received
Review of overdue accounts    
Comparison of invoices received    
with orders
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Task 1
Identify the following as either an input to or output from a payroll system.
Input Output
Time sheets  
Payslips  
Payroll analysis  
Bonus details  
(2 marks)
Task 2
The following staff work at Robotics plc.
 Andrew – Accountant
 Jenny – Credit Controller
 Aidan – Purchasing Manager
 Abdul – Stores Manager
Which members of staff are involved in the purchase of material?
Not
Involved involved
Andrew  
Jenny  
Aidan  
Abdul  
(2 marks)
(Total = 4 marks)

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QUESTION FIVE
Task 1
Which TWO of the following are controls designed to prevent intruders from PHYSICALLY accessing an
organisation’s computer system?
Control 
Fire alarm 
Keypad entry 
Water sprinklers 
Security guards 
(2 marks)
Task 2
True False
External auditors are appointed by the shareholders of the  
company that is being audited.
Internal audit is part of the external audit system.  
Work done by the internal audit department of a company can  
never be relied upon by the external auditors.
External auditors are appointed by the Chief Executive of the  
(2 marks)
(Total = 4 marks)

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54 9: I d e n t if yi n g and p re v e nt i n g f rau d A C C A BT Q ue s t ion Ba nk
Chapter 9: Identifying and preventing fraud

1 What is the name given to the sales ledger fraud that involves cash or cheque receipts being
stolen, with the theft being concealed by allocating subsequent receipts against the debt?
 Manipulation
 Collusion
 Teeming and lading
 Fictitious sales
(2 marks)
2 The primary responsibility for preventing and detecting fraud lies with which of the following?
Audit Committee 
Internal auditors 
External auditors 
Directors 
(2 marks)
3 What is the main reason that an employee would not enforce the company policy of writing off
receivables of customers who are never going to pay?
 In order to overstate sales turnover
 In order to overstate the company’s year-end bank balance
 In order to overstate bad debts
 In order to overstate profits and net assets
(2 marks)
4 Which of the following circumstances may indicate that fraud is likely to arise in an
organisation?
Tight rules and well-defined regulations 

Well-paid staff 
Few opportunities for collusion 
Failing to check references of new members of staff 
(2 marks)

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A C C A BT Q ue s t ion Ba nk 9: I d e n t if yi n g and p re v e nt i n g f rau d 55
5 Which of the following is NOT a common example of the ‘intentional misrepresentation of the
financial position of an organisation’?
Fictitious sales 
Overstating inventory 
Understating expenses 
Loss of assets 
(2 marks)
6 Identify whether the following statements are TRUE or FALSE.
True False
Window dressing of financial statements is where transactions are  
manipulated to make the statement of financial position look
stronger.
Opportunity is not a pre-requisite for fraud.  
(2 marks)
7 Which of the following will NOT happen if the financial results of an organisation are
intentionally understated?
 The share price might fall
 Shareholder returns may be higher than they should be
 The organisation may be refused loan finance
 Suppliers may offer less favourable credit terms to the organisation based on the
financial results
(2 marks)
8 The fraud most likely to occur in the area of sales is:

 Collusion
 Intentional misrepresentation
(1 mark)
9 With regards to money laundering, it is an offence to fail to disclose knowledge or suspicion of

money laundering.
Failure to make a S…………………………… A…………………………… R……………………………
(SAR), on an SAR form, disclosing knowledge or suspicion of money laundering’…is a crime.
The words that best complete the sentences above are:
 Statutory Activity Report
 Suspicious Action Report
 Statutory Action Report
 Suspicious Activity Report
(2 marks)

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10 The criminal offence of under or over valuing invoices in order to disguise the movement of
money would take place in which phase of the money laundering process?
Phase of money laundering process 

Placement 
Layering 
Integration 
(1 mark)
11 Fred’s accountant is suspicious that his client, Fred, is involved in money laundering. If the
accountant were to alert Fred to this fact, which category/ies of money laundering offence
would the accountant be committing?
Yes No
Laundering  
Failure to report  
Tipping off  
(2 marks)
12 If the employees of a company aim to defraud the business they work for by working with its
customers in order to manipulate the quantity of goods despatched, the name given to this
fraudulent activity is:
 Collusion
 Intentional misrepresentation
(1 mark)
13 Which of the following should be considered first in order to establish an effective internal
control system that will minimise the prospect of fraud?
 Recruitment policy and checks on new personnel
 Identification of areas of potential risk
 Devising appropriate sanctions for inappropriate behaviour
 Segregation of duties in critical areas
(2 marks)
14 In order to comply with Money Laundering Regulations, lawyers, accountants and certain other
professionals must keep records of transactions for how many years?
 3
 5
 6
(1 mark)

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14 A form which is completed in order to disclose any knowledge or suspicion of money laundering
is known as what?
 A Suspicious Disclosure Form
 A Serious Disclosure Form
 A Suspicious Activity Report
 A Serious Activity Report
(2 marks)
16 Which TWO of the following are reasons for understating profits and/or net assets of a
company?
In order to force the share price of the company up so that shares can be sold 
above market value.
In order to privately purchase a business asset at below market value. 
In order to pay HM Revenue & Customs less tax than the company is actually liable 
for.
In order to improve the chances of receiving a much-needed loan from the bank. 
(2 marks)

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QUESTION ONE
Background
Organisations must have procedures in place to prevent money laundering.
Task 1
Rank the stages of money laundering 1,2,3 in the order in which they occur:
 Layering
 Integration
 Placement
(2 marks)
Task 2
Select the appropriate control from the list below to fill in the gaps in the guidance about money
laundering.
A Management authorisation
B Record retention
C Induction and training
D Internal audit
All employees must be made aware of the forms money laundering can take and the offences
under the money laundering legislation through 1______ procedures. If queries are raised
about suspicions transactions, it is essential that organisations have 2 _____ procedures in place
to be able to answer them.
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Which of the following are prerequisites that make fraud a possibility?
Not a
Prerequisite prerequisite
Dishonesty  
Motivation  
Manipulation  
Opportunity  
(2 marks)

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Task 2
Money laundering is the process of making the proceeds of a crime appear to be legitimate.
The process usually comprises three distinct phases:
I Placement
II Layering
III Integration
Complete the following table:
I II III
The transfer of money from business to business, or place to   
place, in order to conceal its initial source.
The initial disposal of the proceeds of criminal activity into an   
apparently legitimate business activity or property.
(2 marks)
(Total = 4 marks)

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60 10: L e ad i n g an d man agi n g i n d i v i d u al s an d t e ams A C C A BT Q ue s t ion Ba nk
Chapter 10: Leading and managing individuals and teams

1 What is the difference between responsibility and authority?
 Responsibility is the right a person has to do something whereas authority is the liability
of a person to carry out their duties
 Responsibility is the liability a person has to carry out their duties whereas authority is
the right a person has to do something
 Responsibility is the liability a person has to carry out their duties whereas authority is
the ability a person has to do something
(1 mark)
2 Which of the following management functions listed in the table below represent the FIVE that
were classified by Henri Fayol?
Management function 
Planning 
Motivating 
Co-operating 
Commanding 
Controlling 
Communicating 
Organising 
Co-ordinating 
(2 marks)
3 Who is responsible for the scientific management movement in the USA, arguing that
management should be based on ‘well-recognised, clearly-defined and fixed principles’?
 Henri Fayol
 F W Taylor
 Elton Mayo
 Peter Drucker
(2 marks)
4 According to Peter Drucker, the main objective of the manager of an organisation is which ONE
of the following?
Planning 
Organising 
Commanding 
Economic performance 
(2 marks)

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A C C A BT Q ue s t ion Ba nk 10: L e ad i n g an d man agi n g i n d i v i d u al s an d t e ams 61
5 Which of the following are managerial roles as described by Mintzberg?

 Operational, decisional and interpersonal
 Informational, operational and decisional
 Interpersonal, informational and operational
 Interpersonal, informational and decisional
(2 marks)
6 Is the following statement TRUE or FALSE?
True False
Elton Mayo was the founder of the Human Relations Movement.  
(1 mark)
7 Which style theory of leadership involves: tells; sells; consults; and joins?
……………………………………………………………………………….. Model
(1 mark)
8 According to Blake and Mouton’s Managerial Grid, a manager who is lazy and has no interest in
staff or work results in a managerial style that is described as:
 Country Club
 Impoverished
 Middle of the Road
 Team
(2 marks)
9 Management involves which TWO of the following?
Focusing on people 
Doing the right things 
Doing things right 
Maintaining rather than developing 
(2 marks)
10 The ability to do something, regardless of whether you have the authority or not, is known as:
 Right
 Power
 Responsibility
 Obligation
(2 marks)

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11 The distinction between management and leadership was put forward by _______, who argued
that they were two separate sets of actions: management = coping with complexity and
leadership = coping with change.
Which of the following names most accurately completes the paragraph above?
 Mintzberg
 Heifetz
 Kotter
 Bennis
(2 marks)
12 According to Mintzberg, the interpersonal managerial role does NOT involve which of the
following tasks?
 Spokesperson
 Leader
 Liaison
(1 mark)
13 The following are four styles of management identified by Blake and Mouton:
1 Team
2 Middle of the road
3 Country club
4 Authoritarian
Which of the following are the most task efficient managerial styles as suggested by Blake and
Mouton?
 1 and 3
 2 and 4
 1 and 4
 2 and 3
(2 marks)
14 With reference to the managerial grid of Blake and Mouton, the ‘Dampened Pendulum’
managerial style is also known as:
 Country Club
 Impoverished
 Team
(2 marks)

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QUESTION ONE
Task 1
Which TWO of the following are variables in Blake and Mouton’s Managerial Grid?
Concern for people 

Concern for results 
Concern for task 
Concern for financial reward 
(2 marks)
Task 2
Are the following statements regarding the Fiedler Contingency Model TRUE or FALSE?
True False
Statement 1 Task-orientated leadership is advisable in a crisis  
Statement 2 There is no ideal leader, different leaders will do  
well in different situations
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Leadership involves which TWO of the following?
Asking what and why 
Overly concerned with short-term issues 
Challenging the status quo 
Focusing purely on the bottom line 
(2 marks)
Task 2
Complete the Blake and Mouton Managerial grid with the words High or Low
Concern for task Concern for team

Country club
Team
Authoritarian
Impoverished
(2 marks)
(Total = 4 marks)

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QUESTION THREE
Background
Marcus is leading a multi-disciplinary work team overseeing the development of a new accounting
system. He recruited representatives from each section in the finance directorate. He finds that the
team starts to work well but gradually fails to deliver viable options. Team meetings deteriorate into
arguments as to who is responsible for what. There is no clear sense of direction. No one seems to
take responsibility for the investigation of new options. No one seems to be assessing progress at each
meeting.
Task 1
Which TWO of the following are included in Fayol’s five functions of management?
 Organising
 Communicating
 Commanding
 Monitoring
 Implementing
(2 marks)
Task 2
Identify which of the following failures Marcus is responsible for.
Responsible Not responsible

Failure to ensure effective team management  
Failure to allow the team enough time to develop  
(2 marks)
(Total = 4 marks)

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(1) Recruitment and selection
1 Which of the following is NOT an advantage of advertising internally in an organisation, via
noticeboards, intranet and email?
 Candidates will be known to the organisation
 Opportunities will be created
 Cost may be higher than other methods
 It is less time consuming than external advertising
(2 marks)
2 Put the following stages of the recruitment process into the correct order.
Recruitment process stage First Second Third

Advertise job internally   
Identify need for new recruit   
Prepare job description   
(1 mark)
3 Which of the following would NOT be classified as a type of advertising medium?

 Job advertisement
 National newspaper
 Local radio
 Intranet
(2 marks)
4 Which of the following is a disadvantage of using recruitment consultants in order to fill a

vacancy in an organisation?
 Their view of candidates is not biased
 They don’t save time in the recruitment process
 The fee may be the most important thing
(1 mark)
5 Interviewers may use a range of different techniques when asking candidates questions.
Questions that begin with ‘What, When, Where or Why’ are known as what type of question?
 Probing
 Open
 Closed
 Leading
(2 marks)

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6 Which TWO of the following would be disadvantages of interviews as a method of selection?
The interview is only as good as the interviewer 

Non-verbal communication can also be assessed 
Assessment is subjective 
They are flexible 
(2 marks)
7 Identify whether the following are advantages or disadvantages of the group selection method
of recruiting new staff in an organisation.
Advantage Disadvantage
Management skills can be identified  
The impact of team work can be identified  
Decisions may be divided  
Time consuming and expensive  
(2 marks)
8 Which of the following selection tests is NOT a type of aptitude test?

 Verbal reasoning test
 Spatio-visual ability test
 Personality test
 Physical test
(2 marks)
9 Which of the following is NOT a limitation of selection testing?

 Interpretation of test results requires skill
 Tests will often contain bias
 There is not always a strong correlation between test results and the ability to do a job
 It is standardised
(2 marks)
10 Which TWO of the following are methods used in group selection?
Case studies 
Role-play exercises 
Interview 
(1 mark)

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11 Which of the following is the term used to describe the process of understanding the roles
within the organisation?
 Job analysis
 Job specification
 Job requisition
(1 mark)
12 Adele has just started a new job at ABC Inc. She is reading through her new job description on
her first day to familiarise herself with its contents. Which TWO of the following would be
contained within her job description?
Job title 
Her annual salary 
Her annual holiday entitlement 
Who she reports to (her line manager) 
(2 marks)
13 Which type of interview is the most common selection method used by most organisations?
 One-to-one interviews
 Panel interviews
 Group assessments
(1 mark)
14 Which type of intelligence is routinely examined by IQ tests?

 Emotional
 Spatial
 Practical
 Analytical
(2 marks)
15 Which of the following is the most important advantage for an employer who uses face-to-face
interviews in preference to other recruitment techniques?
 It is quick, easy and inexpensive to organise
 It is an opportunity to assess interpersonal skills
 It is easy to agree on the best candidate
 Candidates perform best when questioned directly
(2 marks)

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QUESTION ONE
Task 1
Which TWO of the following are NOT methods used in group selection/assessment centres?
 References
 Case studies
 Role play exercises
 Interview
(2 marks)
Task 2
Which TWO of the following are disadvantages of group selection/assessment centres?
 They can take a long time
 They can be expensive
 They give longer exposure to the candidates
 They can identify management skills
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Rank the following stages of the recruitment process 1-8 (where 1 is the first thing) in the order in
which they should occur (for a standard job).
 Arrange external advertising
 Prepare particulars of the job
 Request references
 Check the budget exists to recruit
 Conduct interviews
 Identify selection criteria
 Investigate need for new post
 Decide how to find applicants
(2 marks)

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Task 2
Identify which selection method has which of the following advantages.
Application Selection
forms Interviews testing Consultants
Provides objective assessment    
of intelligence and aptitude
Provides factual information    
in standard form
Allows assessment of non-    
verbal communication
Provides external view of    
candidates
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Identify whether the following are part of the recruitment or selection process.
Recruitment Selection
Contracting an agency to headhunt a new Chief Executive for an  
organisation
Carrying out the first and second interviews before appointing the  
new Chief Executive of an organisation
(2 marks)
Task 2
Which TWO of the following might be carried out in order to select potential new recruits for an
organisation?
Checking references 
Drawing up a job advertisement 
Writing a job description 
Reviewing results of aptitude tests 
(2 marks)
(Total = 4 marks)

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(2) Diversity and equal opportunities
1 If one member of staff uses abusive language and behaves in a threatening way towards
another member of staff, then what sort of action is said to be taking place?
 Direct discrimination
 Indirect discrimination
 Victimisation
 Harassment
(2 marks)
2 Which TWO of the following are types of discrimination?
Open discrimination 
Closed discrimination 
Direct discrimination 
Victimisation 
(2 marks)
3 If Employee A is treated less favourably than Employee B because Employee A has given
evidence to support Employee C’s complaint about discrimination, then what is taking place in
this situation with regards to Employee A?
 Victimisation
 Harassment
(2 marks)
4 What type of gender discrimination is said to be taking place if an employer offers less
favourable terms of employment to part-time workers?
 Victimisation
(1 mark)

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5 Anna attends a final job interview at XYZ Ltd in which she is asked whether she has any plans to
start a family in the near future. On the way home on the train she bumps into the other
candidate and they start chatting about their respective interviews. Anna soon realises that this
candidate, who is male, was not asked any such questions about whether he had any plans to
start a family. Anna is not successful in getting the job because she is less qualified than the
male candidate (who does get the job).
Which of the following statements are correct?
I There appears to have been sexual discrimination against Anna by XYZ Ltd and Anna
would be successful in her claim
II There appears to have been sexual discrimination against Anna by XYZ Ltd and Anna
would not be successful in her claim
III There does not appear to have been any sexual discrimination taking place at all
 I only
 II only
 III only
 None of the statements are true
(2 marks)
6 In which of the following situations is positive discrimination permitted?

Advertising a job in a language in which a high proportion of this ethnic group is 
unemployed
Selecting half of the managers in an organisation based on the fact that they are 
women only
Additional training provided for certain employee groups where there is a 
requirement
Employing an equal number of men and women 
(2 marks)
7 Kate is a 28-year old entrepreneur who wants to employ an assistant. She therefore only wants to
employ someone who is aged 21-25 as she thinks it will be awkward instructing and supervising
someone who is older than her. She places an advert in the local paper, specifying that suitable
candidates will be aged 21-25 and a ‘recent graduate’. Her friend Martin tells her that he thinks she
might be in breach of age discrimination. Is Martin’s opinion on the matter TRUE or FALSE?
True False
Specifying 21-25 years old in the advert is age discrimination  
Specifying ‘recent graduate’ in the advert is age discrimination  
(1 mark)
8 If people from a certain ethnic group are encouraged to apply for a particular job, this is an
example of which of the following?
 Positive discrimination
 Positive action
(2 marks)

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Multi task question
QUESTION ONE
Background
Jim Bloggs is advertising for a new accounts assistant in his office and has specified in his advert the
following:
‘Accounts assistant required, 30-40 years old, male, previous experience considered to be an
advantage.’
Task 1
This advertisement is an example of which type of discrimination?
Direct Indirect
Discrimination on the grounds on sex  
Discrimination on the grounds of age  
(2 marks)
Task 2
True False
Diversity in the workplace is the same as equal opportunities  
Discrimination relating to sex, race and disability are governed by law  
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk 11: I n d i v i d u al s, g ro u ps an d t e ams 73
Chapter 11: Individuals, groups and teams

1 Which of the following is NOT a basic component of attitudes?
 Context
 Positive feelings
 Negative feelings
 Volition
(2 marks)
2 Are the following statements about groups and teams TRUE or FALSE?
True False
A group is a collection of individuals who are in the same vicinity but  
who do not interact with each other
A team is a collection of individuals who interact with each other but  
who are not linked by a common purpose
(2 marks)
3 Which TWO of the following are limitations of team working?
Ideas are not pooled 

Information is not shared 
Delayed final decision 
Conflict 
(2 marks)
4 According to Belbin (in 1988), how many roles are there in an effective team?
 Seven
 Nine
 Eleven
(1 mark)

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74 11: I n d i v i d u al s, g ro u ps an d t e ams A C C A BT Q ue s t ion Ba nk
5 Adam is a team member of one of the teams at FGH plc and he is known for his attention to
detail and for always reading the small print at the end of any of the documents that he is
required to study. Some of his fellow team members tease him for being so diligent as they only
really believe in getting an ‘overview’ of what individual documents are trying to convey.
What role (according to Belbin) has Adam assumed in his team?
 Specialist
 Resource investigator
 Monitor Evaluator
 Completer Finisher
(2 marks)
6 According to Belbin, which TWO of the following contributions are most likely to be made by
the team member who assumes the role of ‘plant’?
Problem solver 
Thrives on pressure 
Concerned with fairness and equity 
Ignores details 
(2 marks)
7 Bruce Wayne Tuckman identified four distinct developmental stages that teams go through
(Forming, Storming, Norming and Performing). Identify which stage the following descriptions
relate to.
Forming Storming Norming

Team members begin to trust each other at this stage   
Team members behave relatively independently at   
this stage
Team members put forward their ideas for the rest of   
the team to consider at this stage
(2 marks)
8 Which of the following attributes does a group have that a random collection of individuals does
not?
 Identity
 Leadership
 Resources
(1 mark)

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9 Team effectiveness can be evaluated in a number of ways: it can be evaluated by assessing both
quantitative and qualitative factors. Identify whether the following statements relate to an
effective team or an ineffective team.
Quantitative factor Effective Ineffective

Labour turnover is high  
Absenteeism is high  
Output and productivity is high  
(2 marks)
10 Teams which are made up of individuals from many different departments within an
organisation are known as what?
 Project team
 Multi-skilled team
 Multi-disciplinary team
(1 mark)
11 Richard is a highly enthusiastic member of his team. An extrovert by nature, he is curious and
communicative. He responds to new challenges positively and has a capacity for contacting
people, exploring anything new. However, his attention span is short and he tends to become
less involved in a task once his initial interest has passed.
According to Belbin’s team roles theory, Richard displays the characteristics of which of the
following?
 Monitor-evaluator
 Plant
 Resource-investigator
 Company worker
(2 marks)
12 Team effectiveness can be evaluated in a number of ways: it can be evaluated by assessing both
quantitative and qualitative factors. Identify whether the following statements relate to an
effective team or an ineffective team.
Effective Ineffective
Individual targets are achieved  
Team members are suspicious of each other  
High quality of output is produced  
(2 marks)

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13 According to Bruce Wayne Tuckman, teams go through four distinct developmental stages.
A team which is going through the following is in the middle of which stage?
 Team members adjust their behaviour towards each other as they develop work habits
that make teamwork seem more natural and fluid
 Team members begin to trust one another
 Motivation increases as the team become more acquainted with the project
 Forming
 Storming
 Norming
 Performing
(2 marks)
14 When an individual’s behaviour changes in order to be consistent with the group norm, what is
this known as?
 Consistence
 Compliance
 Conformity
 Obedience
(2 marks)

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QUESTION ONE
Task 1
Belbin identified nine roles in an effective team.
A Plant
B Resource Investigator
C Chairman
D Shaper
E Monitor-Evaluator
F Team worker
G Implementer
H Completer-Finisher
I Specialist
Match the description given below to the team role identified by Belbin.
I Team member who knows how the resources the group needs can be provided
II Team member who possesses the drive and courage to overcome obstacles
III Team member who turns decisions into systems, processes and tasks that will produce
what the team wants
IV Team member whose primary concern is for effective interpersonal relations within the
team
(2 marks)
Task 2
Bruce Wayne Tuckman identified four distinct developmental stages that teams go through. Identify
which stage the following descriptions describe.
Forming Storming Norming Performing

Team members are now competent,    
autonomous and able to handle the
decision-making process without
supervision.
Different ideas compete for    
consideration.
Team members tend to behave    
quite independently.
Team members are expected to take    
more responsibility for making
decisions and for their professional
behaviour.
(2 marks)
(Total = 4 marks)

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QUESTION TWO
Background
Belbin identified nine roles in an effective team.
A Plant
B Resource Investigator
C Chairman
D Shaper
E Monitor-Evaluator
F Team worker
G Implementer
H Completer-Finisher
I Specialist
Task 1
Match the description given below to the team role identified by Belbin.
I Team member who makes every effort to see and judge all options accurately
II Team member who uses creativity and imagination to solve difficult problems
III Team member whose primary concern is meeting deadlines
IV Team member who is highly motivated by the challenges and the pressures of the tasks
(2 marks)
Task 2
Identify which TWO of the following are advantages of teamworking.
 Teamworking can be used to combine the skills of different individuals.
 Teamworking can facilitate communication between different business functions.
 Teamworking ensures that the best decisions for the organisation are made.
 The consensus and cohesion involved in teamworking can ensure that time is not spent
considering alternative strategies.
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Which TWO of the following are attributes of interpersonal intelligence as part of Teamworker in
Belbin’s effective team model?
Empathy 
Co-operation 
Managing stress 
Self-control 
(2 marks)

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Task 2
Are the following statements about the stages teams go through as they develop TRUE or FALSE?
True False
Adjourning is when a team becomes complacent about the task that it  
is performing
Dorming is when a team has finished one task and is waiting to  
commence the next one
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Background
Team effectiveness can be evaluated using both quantitative and qualitative methods. Team BIG at a
large organisation has recently had its team effectiveness evaluated. Qualitative results revealed the
following:
 Stoppages were high
 Opinions were imposed on team members
 Ideas were kept from other team members
 Feedback was undermining
Task 1
True False
Team BIG is performing as an effective team  
Based on the above information, it is not possible to make a preliminary  
assessment of team BIG’s performance
(2 marks)
Task 2
Which TWO of the following qualitative factors might indicate Team BIG is operating ineffectively?
 High absenteeism from team meetings
 Poor understanding of individual roles within the team
 Willingness to share ideas
 Free communication within the team
(Total = 4 marks)

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(1) Motivating individuals and groups
1 Theories of motivation can be classed as either content or process theories. Identify the
questions asked that distinguishes the theory type.
Content Process
Theory Theory
What things are individuals motivated by?  
How can individuals be motivated?  
(2 marks)
2 Which of the following would NOT fit into ‘Physiological needs’ according to Maslow’s hierarchy
of needs?
 Warmth
 Food
 Shelter
 Affection
(2 marks)
3 According to Herzberg’s ‘Motivation-Hygiene’ Theory, which TWO of the following would be

classed as motivation factors?
Annual salary and bonus 

Job security 
Responsibility 
Promotion 
(2 marks)
4 Which of the following is NOT one of the three ways that Herzberg suggested could make jobs
more interesting for an individual?
 Job security
 Job enrichment
 Job rotation
(1 mark)
5 Are the following statements relating to Maslow’s hierarchy of needs TRUE or FALSE?
True False
The most primitive need is ‘Safety’ and it is at the bottom of the pyramid  
Self-actualisation is the easiest need to satisfy  
(2 marks)

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6 According to Vroom’s expectancy theory, as an employee becomes more confident about what
is achievable, what will happen?
 Their motivation will decrease
 Their motivation will increase
 Their valence will increase
 Their valence will decrease
(2 marks)
7 If F = Motivation force, V = Valence and E = Expectancy, which of the following equations

correctly represents Vroom’s expectancy theory?
V=F×E 
V = E/F 
F=V×E 
F = V/E 
(2 marks)
8 According to Douglas McGregor’s X-Y Theory, which TWO of the following does the Theory X
manager believe?
Employees are happy to accept and seek responsibility 

The average employee dislikes work and will avoid it where possible 
Most employees must be forced to work towards an organisation’s objectives 
(1 mark)
9 According to Herzberg, a vertical extension of an individual’s job which leads to increased levels
of responsibility and provides greater challenges is known as what?
 Job enrichment
 Job rotation
 Job enlargement
(1 mark)
10 Which of the following will NOT determine how much an individual is paid?
 Market rates
 Job content
 Job performance by an individual
 Job enlargement
(2 marks)

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11 An individual’s pay may be enhanced by PRP (Performance Related Pay). Fred works on the
production line at ToastersRUS factory and is paid a fixed amount per toaster completed. The
type of scheme where an employee is paid a fixed amount per unit produced is known as what?
 Piecework scheme
 Group bonus scheme
 Profit-sharing scheme
 Points scheme
(2 marks)
12 According to Herzberg’s two factor theory, which ONE of the following is the most important of
the hygiene factors?
Company policy and administration 

Job security 
Pay and benefits 
Relationship with co-workers 
(2 marks)
13 Abdul has a team of staff working for him and his style of management could easily be
described as ‘authoritarian’. He believes that all of his staff members dislike work and avoid it
whenever they can and he has to threaten them with punishments in order to get them to work
towards organisational objectives.
Abdul’s approach to managing his team is described by which motivational theorist?
 Vroom
 McGregor
 Maslow
 Herzberg
(2 marks)
14 In order to motivate its employees, a large computer company offers promotion to its sales staff
if they meet their sales targets. One of the members of the sales team, Bridget, sees this as
highly attractive (Valence = +0.90) but her portfolio of clients and past performance mean that
the sales target will be almost impossible (Expectancy = 0.1).
Using Vroom’s formula, what is Bridget’s motivational force?
Answer = ……………………………………………………………..
(1 mark)
15 According to Herzberg, a horizontal extension of a job which leads to an increase in the number
of operations carried out by an individual and reducing the number of repetitive tasks is known
as what?
 Job enrichment
 Job rotation
 Job enlargement
(1 mark)

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16 What is meant by ‘valence’ in Vroom’s expectancy theory?

 The strength of an individual’s belief that acting in a certain way will obtain the desired
outcome
 The strength of an individual’s preference for a given outcome
 The values an individual applies to the motivation decision
 The strength of an individual’s motivation to act in a certain way
(2 marks)
17 According to Douglas McGregor’s X-Y Theory, which ONE of the following is NOT a characteristic
of the Theory X manager?
 One-way communicator
 Tolerant
 Poor listener
(1 mark)
18 When a person engages in an activity for its own sake, for example, a hobby, where there isn’t
any obvious external incentive present, this is known as what?
 Intense motivation
 Intrinsic motivation
 Extrinsic motivation
(1 mark)

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QUESTION ONE
Task 1
Which of the following features of an individual’s job are motivators or hygiene factors as identified by
Hertzberg?
Motivator Hygiene
One-off year-end bonus to reward contribution during the year  
Competitive salary  
Comfortable office  
Opportunity to mentor new staff  
(2 marks)
Task 2
Which of the following beliefs are characteristic of the Theory X school of management identified by
McGregor and which are characteristic of the Theory Y school?
Theory X Theory Y
Individuals need to be told clearly the sanctions they will face  
if they do not perform adequately.
Individuals will naturally direct their work towards meeting  
organisational objectives.
Individuals are naturally resistant to change.  
Most individuals do not seek advancement within the  
organisation.
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Maslow’s theory assumes we all have similar needs and react in a similar way. Which TWO of the
following fit into the category ‘Esteem needs’?
Receiving excellent references from your employer when you apply for a new job 
due to a house move
Meeting friends at the pub on a Friday night after a busy week 
Coming top in your Accountancy examinations 
Reading a book 
(2 marks)

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Task 2
Identify whether the following theories are content or process theories, by completing the table
below.
Content Process
Theory Theory
Vroom’s Expectancy Theory  
McGregor’s X-Y Theory  
Maslow’s hierarchy of needs  
Herzberg’s Motivation-Hygiene Theory  
(2 marks)
(Total = 4 marks)
QUESTION THREE
Background
According to Vroom, Force or Motivation = _______ × _______
Task 1
Identify which TWO of the following words complete Vroom’s equation.
1 Valence
2 Opportunity
3 Expectancy
4 Needs
(2 marks)
Task 2
Consider the following statements that relate to Maslow’s hierarchy of needs and identify whether
they are TRUE or FALSE.
True False
Affection is a physiological need.  
Relationships are a social need.  
(2 marks)
(Total = 4 marks)

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86 12: T rai n i n g a n d d e v e l op me n t A C C A BT Q ue s t ion Ba nk
Chapter 12: Training and development

1 Which of the following is NOT one of the benefits that learning brings to the workplace?
 Increased productivity
 Better staff retention
 Higher motivation
 Increased staff costs
(2 marks)
2 John is an employee of ABC Ltd and is a member of the Marketing Department. He is quite a
cautious team member who often takes a back seat during meetings. He prefers to sit back and
observe what everyone has to say before collecting his thoughts and coming to a firm
conclusion about what he thinks of a new project. John’s most likely learning style is which of
the following?
 Activist
 Reflector
 Theorist
 Pragmatist
(2 marks)
3 According to Honey and Mumford, which TWO of the following are typical of those individuals
with a pragmatist’s learning style?
Think through problems logically 

Collect and analyse data and are slow to reach conclusions 
Search for new ideas and keen to experiment 
Act quickly and confidently on ideas and get straight to the point in a discussion 
(2 marks)
4 According to Armstrong, training is the planned and systematic modification of WHAT, through
learning events, programmes and instruction which enables individuals to achieve the level of
knowledge, skills and competence to carry out their work effectively?
 Potential
 Ability
 Behaviour
 Knowledge
(2 marks)

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A C C A BT Q ue s t ion Ba nk 12: T rai n i n g a n d d e v e l op me n t 87
5 Identify the correct definitions of Development and Education in the table shown below.
Development Education
Knowledge acquired gradually by instruction and learning  
The growth or realisation of an individual’s potential and ability  
through the provision of learning and educational experiences
(1 mark)
6 Which TWO of the following are benefits of training and development to the employees of an
organisation?
Increased skills 
More interesting work 
Cheaper than buying in skills 
(1 mark)
7 Put the four stages of Kolb’s experiential learning theory into the correct order.
First Second Third Fourth
Acting    
Thinking    
Experiencing    
Reflecting    
(2 marks)
8 According to Kolb, different people naturally prefer a different learning style. Each preferred
learning style is a product of how to approach a task (watching or doing) and the emotional
response to the experience (thinking or feeling). A combination of ‘doing’ and ‘feeling’ produces
the preferred learning style known as which of the following?
 Accommodating
 Diverging
 Converging
 Assimilating
(2 marks)
9 According to Kolb, an individual who has a concise and logical approach to learning, whose ideas
and concepts are more important than people and who prefers reading, lectures, exploring
analytical models and having time to think things through can be described as having which of
the following preferred learning styles?
 Accommodating
 Diverging
 Converging
 Assimilating
(2 marks)

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10 The training and development process in an organisation involves a number of steps. Identify
which of the following statements regarding these steps are TRUE and which ones are FALSE.
True False
The first stage in the training and development process is to set  
objectives for the skills and competences required to fulfil the overall
strategy
The final stage in the training and development process is to check to  
ensure that the objectives have actually been met
(2 marks)
11 Which ONE of the following is NOT a role of the Human Resources Department in an
organisation?
 Agree objectives with staff
 Provide rewards
 Pay salaries
(1 mark)
12 An individual who prefers an ‘assimilating’ learning style will be NOT be comfortable in which of
the following situations?
 Exploring analytical methods
 Having time to think things through
 Being thrown in as the deep end without notes and instructions
 Organising wide-ranging information into a clear and logical format
(2 marks)
13 The experiential learning theory was developed by whom?
Kolb 
Honey and Mumford 
(1 mark)
14 Which TWO of the following are benefits that learning can bring to the workplace?
Increased productivity 
Decreased costs 
Greater staff flexibility 
Higher staff turnover 
(2 marks)

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15 An individual whose preferred learning style could be described as ‘Pragmatist’ would be

comfortable in which TWO of the following situations?
Putting ideas and theories into practice 

Acting quickly and confidently on ideas and ‘getting straight to the point’ 
Standing back and observing 
Seeking to centre activity around themselves 
(2 marks)

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QUESTION ONE
Task 1
Which TWO of the following are benefits of training and development to the employees of an
organisation?
 Increased flexibility
 Better performance at work
 Improved staff retention
 Self confidence
(2 marks)
Task 2
Which TWO of the following are benefits of training and development of employees to an organisation?
 Increased employability
 Reduced employment cost
 Improved performance of staff
 Staff job satisfaction
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Honey and Mumford developed a learning style questionnaire designed to determine a person’s
preferred learning style. Match up the following learning styles with the correction description of how
they learn.
Conclude Do Review Plan

Activists    
Reflectors    
Theorists    
Pragmatists    
(2 marks)
Task 2
Kolb’s preferred learning style ‘converging’ is a product of which TWO of the following choices?
Doing 
Watching 
Feeling 
Thinking 
(2 marks)
(Total = 4 marks)

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QUESTION THREE
Task 1
According to Honey and Mumford, which TWO of the following are NOT typical of individuals with a
theorist’s learning style?
1 Think through problems logically
2 Prefer principles, models and systems thinking
3 Immerse themselves fully in new experiences
4 Open-minded, enthusiastic and flexible
(2 marks)
Task 2
Match the descriptions of the method of learning described below to the learning styles described by
Kolb.
Diverging Assimilating Converging Accommodating
Amrish requires clear explanations    
and organises information received in
clear formats.
Helga develops by solving problems    
and finding practical uses for theories.
Yen-pei prefers to work in groups so    
that she can understand varying
perspectives of different people.
Jaitinder prefers to act on instinct and    
intuition rather than logic and analysis.
(2 marks)
(Total = 4 marks)

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(1) Performance appraisal
1 Which of the following is NOT an aim of performance assessment?
 Identify employee training needs
 On-the job training
 Give feedback on performance to employees
 Form a basis for decisions regarding an employee’s annual salary
(2 marks)
2 Management by Objectives is a method of assessing the performance of human resources and it

involves four steps. Put the following steps in the correct order of operation.

Agree feedback    
Agree resources    
Agree rewards    
Agree objectives    
(2 marks)
3 Management by objectives is often achieved using set targets and introduced the SMART
criteria. The objective ‘M’ in the SMART criteria stands for which ONE of the following?
Monitored 
Measurable 
Manageable 
(1 mark)
4 Ivor is preparing for his annual appraisal with his line manager. The company that he works for,
MR Ltd, has just introduced a system of appraisal that includes the appraisee receiving feedback
from anyone who comes into contact with him, including his peers, managers, customers and
suppliers. This type of appraisal system is known as what?
 360 degree appraisal
 Self- appraisal
 Formal appraisal
(1 mark)
5 Which of the following is NOT a benefit of a performance appraisal to an organisation?

Get to know employees 
Improved communication 
Receive feedback 
Understand organisational goals 
(2 marks)

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6 Which TWO of the following are NOT barriers to effective appraisal?
Allocate more time in case appraisal overruns 

Appraisal focused on pay and benefits 
Train managers to conduct honest appraisals 
Employees behave defensively 
(2 marks)
7 During his appraisal, Alistair’s line manager feeds back his strengths and weaknesses to him and
then explains why his criticism of him is justified. He tells Alistair how he should go about trying
to improve the situation (which gave rise to the criticism), but does not offer any suggestions or
guidance to him. This appraisal technique is most accurately described as which of the
following?
 ‘Tell and sell’ technique
 ‘Tell and listen’ technique
 ‘Problem-solving’ technique
(1 mark)
8 In relation to performance appraisal, which of the following statements are TRUE?

I Performance appraisals identify employees’ training needs
II Performance appraisals are important because, as identified by the ‘Hawthorne effect’,
employees who are noticed perform better
III One of the main aims of individual performance appraisals is for feedback to be given by
employees to employers
 I and II only
 I and III only
 II and III only
 I, II and III
(2 marks)
9 Anne is in attending her annual performance appraisal and her line manager, Mr White, has
asked her to complete a form in which she assesses his performance as her manager. Once she
has completed it, she hands it back to him for review. What is this type of appraisal known as?
 Upward appraisal
 Downward appraisal
 Vertical appraisal
(1 mark)

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10 Which of the following is NOT one of the general criteria used to evaluate an appraisal scheme?
Relevance 
Fairness 
Co-operation 
Subjectivity 
(2 marks)
11 The performance of human resources at AAA Ltd is assessed by agreeing the following:
 Rewards
 Feedback
 Resources
 Objectives
What is this technique commonly known as?
 Management by Rewards
 Management by Feedback
 Management by Resources
 Management by Objectives
(2 marks)

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A C C A BT Q ue s t ion Ba nk 13: P e rs o n al ef f e c ti v e n e s s a n d c o mmu ni c a t i o n 95
Chapter 13: Personal effectiveness and communication

1 Which of the following is NOT one of the key principles of time management?
 Focus
 Urgency
 Organisation
 Production
(2 marks)
2 One of the key principles of time management is ‘goals’. In order to be useful, such goals need
to be SMART. What does the ‘R’ in SMART represent?
R = ……………………………………………………………………………………
(1 mark)
3 Peter is a trainee at ABC Ltd and he has been put under the guidance of Andrew, a more
experienced employee whose job it is to show Peter how to perform tasks.
The job that Andrew is performing is that of:
 Mentor
 Counsellor
 Coach
 Personal Development Officer
(2 marks)
4 Sarah is helping Anne to work through some of the problems that she is experiencing at work.
Sarah believes that the best course of action is for her to help Anne to identify and explore her
issues and then to come up with her own solutions.
Sarah is said to be taking on the role of:
 Mentor
 Counsellor
 Coach
 Personal Development Officer
(2 marks)
5 George is Fred’s line manager and has asked Fred to produce a report which details the sales
figures for the last quarter. Fred produces the report by the end of the week as requested.
What is the direction of the communication between Fred and George?
 Horizontal
 Diagonal
 Vertical
(1 mark)

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96 13: P e rs o n al ef f e c ti v e n e s s a n d c o mmu ni c at i o n A C C A BT Q ue s t ion Ba nk
6 According to Leavitt, which TWO of the following statements relating to communication

patterns is true?
The wheel communication pattern solves problems the slowest. 

The circle communication pattern solves problems the slowest. 
The lowest job satisfaction is associated with the wheel communication pattern. 
The highest job satisfaction is associated with the wheel communication pattern. 
(2 marks)
7 Who does lateral communication most commonly take place between?

I Superior and subordinate
II One member of a peer group and another
III The head of one department and another
 II only
 I, and III
 I, II and III
 II and III
(2 marks)
8 One of the processes of formal communication involves the meaning of a message being lost,
for example, by the wrong impression being given by an email. What is this process known as?
 Declension
 Distraction
 Decoding
 Distortion
(2 marks)
9 The communication method chosen by an organisation in different situations will depend on

the objective of the communication.
Complete the table below by selecting one of the following methods of communication:
 Email
 Face-to-face
 Video conferencing
 Letter
Objective of communication Method

Face-to-face communication between chief executives in two offices which are
100 miles apart
Written record of a confidential matter
To reach the staff of several head offices in several countries around the world
(2 marks)

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10 Which of the following is NOT recognised as being one of the qualities of good information?
 Relevant
 Operational
 Timely
 Complete
(2 marks)
11 Poor quality lateral communication will result in which of the following?

 Lack of direction
 Lack of co-ordination
 Lack of delegation
(1 mark)
12 According to Leavitt, what is the name of the communication pattern that involves a superior
giving an instruction to several subordinates simultaneously?
 Circle
 Chain
 Y
 Wheel
(2 marks)
13 What is ‘feedback’?
 The information being communicated
 The communication response from the recipient
 The recipient of the information
(1 mark)
14 Competence is the ability to do a job. Within the competency framework, competence CANNOT
be which of the following?
 Behavioural
 Occupational
 Progressive
(1 mark)

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QUESTION ONE
Background
Bishen’s recent appraisal has identified that his most significant weakness is poor time management.
Task 1
Which TWO of the following are NOT key principles relating to time management?
 Goals
 Specificity
 Focus
 Urgency
 Organisation
 Communication
(2 marks)
Task 2
Identify which FOUR of the following methods could be used to improve Bishen’s time management.
 Producing a daily plan listing the tasks that have to be done that day
 Always being available to deal with queries that other staff have
 Only having on his desk material relating to the work that he is currently doing
 Responding to emails immediately they arrive in his in-box
 Making sure he attends every meeting where his presence has been requested
 Organising his work in batches requiring the same files and materials
 Developing subordinates by delegating work to them and not spending time explaining
what they have to do
 Taking some action every time he reads a piece of paperwork
(2 marks)
(Total = 4 marks)

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QUESTION TWO
Task 1
Match the features with the model of communication identified by Leavitt (there are 2 that apply for
each).
Circle Chain Y Wheel

A central figure has the information to    
co-ordinate the task.
There is no obvious leader.    
Each member of the group can only    
communicate with one or two other
people.
It is likely be a quick method of solving    
problems.
(2 marks)
Task 2
Rank in 1-5 order the stages in the radio feedback model with 1 being the first stage.
 Receiver
 Coded message
 Feedback
 Sender
 Decode message
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Identify the method of development that is most appropriate for the work situation described.
Coaching Counselling Appraising Mentoring

The new trainee is allocated a more    
experienced staff member who acts as a
sounding board on their career
development.
The new trainee is allocated a more    
experienced staff member who is given
responsibility for helping the trainee to
learn new skills on the job.
The new trainee has regular sessions with    
her line manager reviewing progress and
setting objectives for the next period.
The line manager discusses with the new    
trainee concerns that other staff have
raised about the trainee’s work.
(2 marks)

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Task 2
Tigs Limited uses coaching as a means of staff development. Which two of the following are
advantages of coaching?
1 It allows for the strengths and weaknesses of the trainee.
2 It briefs the trainee on important topics that may be only indirectly work-related.
3 It allows the trainee to talk through problems that the trainee is having with other staff.
4 It gives the trainee the opportunity to broaden knowledge and experience
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Task 1
Identify the best method of communication in the following situations.
Face to face
meeting Email Report Notice
Provision of information about the    
date, time and venue of the next
quarterly staff meeting
Provision of information about new    
working arrangements and answering
staff queries about the changes
Provision of detailed analysis of    
competitor strategies and new
products over the last two years
Provision of information about    
procedures to be followed if a fire
alarm is raised
(2 marks)

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Task 2
For each of the following situations, explain the flaw in the communication process.
Selective Non-verbal
Overload hearing Misunderstanding signs
Kevin is meant to have a meeting with    
Paula to deal with urgent queries she
has raised at 10am one morning.
However, at 10am Kevin is still in a
previous meeting that has overrun.
At the end of this meeting Kevin is
summoned to see his Managing
Director, Col, and is with Col until
lunchtime. At the end of the morning
Kevin has still not seen Paula.
During the first part of the afternoon    
Kevin holds a meeting about plans for
future work for an important client.
During this meeting Kathy raises a
number of concerns about these
plans, but Kevin checks his text
messages while she is talking.
In the later afternoon Kevin holds a    
general staff meeting at which Col
speaks briefly, saying how well the
business is doing at the moment.
During the meeting staff express
concern about the number of staff
that have left since the last meeting.
After the meeting Col emails Kevin to
say that he felt the meeting couldn’t
have gone better.
Paula finally manages to see Kevin at    
the end of the afternoon. She says
that she does not think there will be
sufficient staff resource to complete
the work she is managing to meet the
deadline in two weeks’ time. Kevin
tells her that he is currently recruiting
new staff to replace those who have
left and they will be joining the
company over the next few months.
(2 marks)
(Total = 4 marks)

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102 14: P ro f e s s i o n al e t hi c s A C C A BT Q ue s t ion Ba nk
Chapter 14: Professional ethics

1 All directors of an organisation have a duty of faithful service to their organisation. Such a duty
(of faithful service) is also known as:
 A fiduciary responsibility
 A moral responsibility
 An ethical responsibility
(1 mark)
2 Which TWO of the following are NOT concepts of corporate governance?
Fairness 
Relativity 
Honesty 
Ethnicity 
Integrity 
Judgement 
Transparency 
(2 marks)
3 The utilitarianism approach to ethical decision making can be most closely summarised as which
of the following?
 Deciding on the course of action which results in the most useful outcome for some of
the people involved.
 Deciding on the course of action which results in the least useful outcome for all of the
people involved.
 Deciding on the course of action which results in the most useful outcome for as many of
the people involved as possible.
 Deciding on the course of action which results in the least useful outcome for as few of
the people involved as possible.
(2 marks)

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A C C A BT Q ue s t ion Ba nk 14: P ro f e s s i o n al e t hi c s 103
4 Which of the following is/are criticism(s) of ethical relativism?

I Some of those operating in the marketplace may benefit themselves at the expense of
others
II It may lead to an acceptance of the practice that ‘anything goes’
III It does not take any account of developing advances in morality
 II only
 I, and III
 I, II and III
 II and III
(2 marks)
5 Robert works in the stores department of an electrical goods retailer. One day he carries out a
stocktake of televisions and he finds that there are four fewer TVs than as per the stock records.
He decides to try to investigate why there is a difference when James, the store’s manager asks
him what he is doing. When Robert explains to him what he has found out, James says that he
doesn’t need to worry about it and that he will look into it himself. Later on Robert sees James
in the car park loading four TVs into the back of a white van and accepting cash from the driver
of the van. Robert decides that he should report what he has seen to James’ line manager.
Robert’s decision to disclose what he has seen is known as:
_____________________________________________________
(1 mark)
6 As an accountant, you will be expected to have a number of personal and professional qualities.
Identify whether the following qualities would be categorised as ‘personal’ or ‘professional’.
Personal Professional
Reliability  
Timeliness  
Courtesy  
Respect  
Scepticism  
Accountability  
Independence  
(2 marks)

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7 The ACCA’s Code of Ethics and Conduct states that members and firms should not accept or
continue engagements in which there are, or are likely to be, significant conflicts of interest
between members, firms and clients. ABC & Co. are the auditors of ZEBRA plc, a company listed
on the London Stock Exchange. ABD & Co. both prepares ZEBRA plc’s accounting records and
financial statements and audits them. What sort of conflict of interest could be said to arise in
this situation?
 Self-interest threat
 Self-review threat
 Familiarity threat
 Advocacy threat
(2 marks)
8 Is the following statement TRUE or FALSE? (Tick as appropriate)

‘An integrity-based approach to managing ethics is concerned with managers taking the sole
responsibility for ethical behaviour, rather than ensuring that the organisation acts according to
the law.’
 True
 False (1 mark)
9 You work as a management accountant in the Finance Department of a big hospital. At the end
of a meeting with one of your clinical budget holders, she asks you if you could give her some
advice regarding her husband’s tax return, which she shows to you. She explains that her
husband is unsure whether he has calculated his self-employed profit correctly because he
doesn’t know whether all of the expenses that he has claimed are legitimate business expenses.
Which issue is arising in this situation?
 Professional competence and due care
 Confidentiality
 Objectivity
 Conflict of interest
(2 marks)
10 The ACCA Code of Ethics and Conduct states that the public may perceive that the objectivity of
a member is likely to be jeopardised when the fees (for audit and recurring work) for one client
(or group of clients) exceeds what percentage of the firm’s total fees?
 Listed/public interest companies = 10%, other companies = 15%
(2 marks)
11 Which ONE of the following would NOT represent an ethical objective in relation to
employment practices?
 Promotion of workforce diversity
 Guarantee of minimum wages
 Employment training
(1 mark)

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QUESTION ONE
Background
Accountants have codes of professional ethics because the public rely on their judgements.
Task 1
Match the following situations to the ethical threat that they represent.
Self-review Advocacy Familiarity Intimidation

Provision of legal advice to client    
Practice having acted for client for 20 years    
Audit team carrying out audit and preparing    
client’s accounting records
Accountant only receiving fees from client if a    
successful outcome is achieved (contingent
fee)
(2 marks)
Task 2
Which of the following is NOT a suitable safeguard against a threat of self-review by a firm of
accountants?
 Independent review by a senior partner in the firm
 Separation of teams within the firm to carry out different aspects of the task
 Independent review by a third party accountant
 Training to all staff about ethical threats and safeguards
(2 marks)
(Total = 4 marks)
QUESTION TWO
Task 1
Which of the following are personal qualities that an accountant should have and which are
professional qualities?
Independence  
Reliability  
Scepticism  
Courtesy  
Respect  
Accountability  
Timeliness  
(2 marks)

lOMoARcPSD|11199247
Task 2
Match the following situations to the ethical threat that they represent.
Self Advocacy Familiarity Intimidatio
interest n
An audit senior having an affair with a    
member of the client’s finance team
A client threatening to sue an accountancy    
practice if the practice qualifies the
client’s audit report
A client giving the audit partner tickets to    
a major sporting event
An accountancy firm giving a client advice    
on debt reconstruction and negotiating on
the client’s behalf with the bank
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Which FOUR of the following are fundamental principles of ethical behaviour from the IFAC and ACCA
Codes of Ethics?
 Professional competence
 Professional behaviour
 Advocacy
 Accountability
 Confidentiality
 Reliability
 Respect
 Objectivity
(2 marks)

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Task 2
Match the following definitions to the professional qualities that are listed.
Social
responsibility Independence Scepticism Accountability
Carrying out responsibilities    
without bias or prejudice
Taking responsibility for    
own work and decisions
Questioning information    
provided to be able to form
an opinion on its reliability
Acknowledgement of a duty    
to act in the public interest
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Task 1
Identify which personal qualities are being demonstrated in the following circumstances.
Independence Responsibility Timeliness Respect

Anne is chairing a meeting of senior    
managers in the accountancy firm
where she works that is due to start at
10am. Although not all the managers
have arrived on time, Anne starts the
meeting precisely at 10am.
During the meeting the managers    
discuss an important deadline that
staff whom Anne manages have failed
to meet. Anne acknowledges that the
failure was her fault as team manager
and states that she will discuss what
happened with her team.
During the meeting with her team,    
Anne asks them to explain the
reasons why they failed to meet the
deadline and raise any concerns they
have with the way the work was
carried out.
At the end of the day Anne hears    
that her daughter has been recruited
by the Accounts department of an
important client of the firm. When
she gets in the next morning, Anne
emails the Senior Partner to say that
she can no longer do any work on
that client’s affairs.
(2 marks)

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Task 2
Identify which of the following are characteristics of a compliance-based approach and which are
characteristic of an integrity-based approach.
Compliance Integrity
Underpinned by external regulation  
Based on assumption that individuals focus on their  
own self-interest
Aims to promote values and responsible behaviour  
Allows employees discretion in their actions  
depending on situation
(2 marks)
(Total = 4 marks)
QUESTION FIVE
Task 1
Identify which of the following would be acting in the public interest.
Acting in public Not acting in public
interest interest
An auditor publicly disclosing the identity of a  
whistleblower at a client organisation
An employee of an airline company reporting  
unsafe practices
An auditor of a charity reporting a material  
fraud
An accountant at a listed company reporting  
illegal accounting to a stock exchange regulator
(2 marks)
Task 2
Which of the following activities is/are legal and which is/are illegal?
Legal Illegal
Tax avoidance  
Tax evasion  
(2 marks)
(Total = 4 marks)

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 1: O rg an i s at i on s , s t ake h o l de rs a n d t h e bu s i n e s s e n v i ro n me n t 109
Chapter 1: Organisations, stakeholders and the business

environment
Answers to objective test questions

1  II only
Individuals may be capable of achieving results that an organisation can, so statement (III) is not
true. Public companies are companies that are listed on the Stock Exchange.
2  A Non-Governmental Organisation
Note that a co-operative is a business owned by the workers/customers who share profits.
3  The shareholders of the organisation.
4  Customers of a company
Connected stakeholders include: shareholders; suppliers; financiers and customers of an
organisation.
5  Primary stakeholders
Primary stakeholders are those stakeholders who have a contractual relationship with an
organisation.
6  Sole trader
7  When individuals work together they achieve more than when the same individuals work
on their own.
8  Segment B – low level of interest, high power

Stakeholders in segment B – low level of interest, high power – should be treated with care as it
is possible for them to move into the segment representing high level of interest, high power
and so should be kept satisfied.
9
Suppliers 
Shareholders 

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110 A n s w e rs t o 1: O rg an i s at i on s , s t ake h o l de rs a n d t h e bu s i n e s s e n v i ro n me n t A C C A BT Q ue s t ion Ba nk
10  Those with high power but a low level of interest in the company
11  Public sector organisation
12  Involve
13
Money that is given in exchange for goods and services is known as consideration 
Resources available to public sector organisations are limited 
14  PEST analysis
PEST analysis is a tool concerned with the general influences on a business of its own
environment. This is a wider analysis than just the physical environment (which is included in a
PESTEL analysis) but political, economic, social and technological issues in its environment.
15  Consideration
16  Wrongful dismissal
Wrongful dismissal – a dismissal that breaches the contract of employment, i.e. only giving Jane
one month’s pay in lieu of notice, rather than two.
17  Agreement = Offer + Acceptance
18  Environmental footprint
The environmental footprint is the impact that the activities of an organisation have on the
environment.
19
Regulated personal information should be kept longer than necessary 
Regulated personal information should be processed for unlimited purposes 
20  It encourages employees to keep up-to-date with developments in their industry.

Outsourcing does NOT encourage employees to keep up-to-date with new developments in
their industry, but quite the reverse. If a contractor is dealing with a firm’s website, there is no
requirement for management to come up with new ideas or to explore new developments in
the firm’s industry.

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21  Barters Ltd are responsible for giving Olga a full refund

It is the responsibility of the seller to refund the customer as the contracts of sale are between
the person/organisation who sells the goods and the customer and not the manufacturer and
the purchaser.
22
An aging population 

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Multi task answers
QUESTION ONE
Task 1
 If an employer needs fewer workers at a new location, then this will be fair dismissal or
redundancy of the employees concerned.
Task 2
Unlawful Not unlawful

Gender  
Age  
Nationality  
Religion  
QUESTION TWO
Task 1
 Urgent IT issues at M Co may not be resolved as quickly.
 Longer-term contracts with N Co will be prone to disruption.
Outsourcing functions like IT simplifies the structure of an organisation and should reduce
ongoing operational costs, but because support is external to the organisation, there may be a
greater lead time required for resolving IT issues. Because there is less direct control over
subcontractor’s employees, long-term projects in particular may be prone to disruption.
Task 2
(1)  subjects
(2)  adequate
(3)  relevant
(4)  not excessive
QUESTION THREE
Task 1
 Pulborough plc, a major customer
 Petworth Limited, Amberley’s principal supplier
 The Royal Welsh Bank, which made a 10-year S1 million loan to Amberley five years ago.
Amberley has met all of its commitments in the loan agreement.
 Elm Lodge Mutual Fund, an institutional shareholder that has just purchased 10% of
Amberley’s share capital.
Pratish Gill is an internal stakeholder. Brenda Towers, Byworth Limited and Greenspace are all
external stakeholders.

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Task 2
Power Interest
Greenspace Low High
Elm Lodge Mutual Fund High High
Byworth Limited Low Low
The Royal Welsh Bank High Low
Greenspace clearly has high interest, but probably low power as it is only a local pressure group.
Elm Lodge Mutual Fund has become a major investor in Amberley and because it has recently
made the investment, is likely to be particularly interested in the company. Byworth could
probably not do much about Amberley’s activities, but as relations seem to be cordial it is
probably content with the current situation. Similarly, the Royal Welsh Bank is probably not very
concerned with Amberley as the loan is secured and it has fulfilled all its commitments to date.
QUESTION FOUR
Task 1
Employees Suppliers Shareholders Fans

High earnings growth    
Quality of play    
Prompt payment for goods    
Security of tenure    
Task 2
Needs support Voluntary

Local wildlife  
Environmental pressure group  
Fulchester Rovers’ fans  
League authorities  
QUESTION FIVE
Task
(1)  agreement
(2)  consideration
(3)  legally binding
(4)  legal capacity

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QUESTION SIX
Task 1
Characteristic Not characteristic

Unlimited resources  
Accountability to the government  
Potentially unlimited demand for its services  
Funds can be obtained by raising taxes  
Task 2
Involved Not involved

Criminal law  
Company law  
Employment law  
Data protection  
Employment law is involved as it is highly likely that his employment contract would require not
disclosing client information and a serious breach could lead to dismissal under the contract.

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 2: T he mac ro - e c o n o mi c e n v i ro n me nt 115
Chapter 2: The macro-economic environment

1  Equilibrium National Income
Equilibrium National Income will be reached where aggregate supply = aggregate demand.
2  When resources are unemployed

In a situation where there is an unemployment of resources, it is known as a deflationary gap.
3  II and III
4  VAT
Suppliers add VAT to the cost of the goods so they are essentially collecting tax.
5  Monetary policy, works in the medium term

Quantitative easing occurs when governments print more money in the hope that the economy
will be stimulated. It is generally a medium-term policy.
6  The rate of unemployment is 3% to the nearest whole per cent.
7
Savings  
Expenditure on imports  
Investment  
8  A method which causes interest rates to rise

Taxation does not cause interest rates to rise. However, it can be used by governments for the
other three objectives.
9  The cost of borrowing in Country XYZ will increase if interest rates rise
If interest rates rise, the cost of borrowing will rise. Profits of companies will fall because they
will have higher interest charges to pay and investment in Country XYZ will be more attractive
because interest earnings will be potentially higher.

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116 A n s w e rs t o 2: T he mac ro - e c o n o mi c e n v i ro n me nt A C C A BT Q ue s t ion Ba nk
10  Interest rates
Interest rates are a target for monetary policy. The formal planning of fiscal policy is set out in
the Government’s Budget (expenditure and revenues) and its borrowing requirements (the
Public Sector Net Cash Requirement i.e. the amount by which government planned expenditure
falls short of its revenues).
11  Organisations with long-term receivables

In periods of high inflation if a company has bought stock previously this can be sold for a higher
price that the original cost. Those that owe large sums of money benefit as the amount that is
owed falls in value in real terms.
12
Exchange rates are not an element of monetary policy 
Interest rates are not an element of monetary policy 
Answer to multi task question
QUESTION ONE
Task 1
Unemployment category Long-term Short-term

Frictional  
Structural  
Seasonal  
Technological  
Task 2
True False
Imports become more expensive to the UK  
Imports become cheaper to the UK  
Exports become more expensive to countries that use the Euro  
Exports become cheaper to countries that use the Euro  

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 3: T he mi c ro - e c o no mi c e n v i ro n men t 117
Chapter 3: The micro-economic environment

1  I, III and IV
The factors that determine the demand for a good include: the price of the good, the price of
substitute goods and tastes and fashion. Don’t forget that the size of the income of households
and the distribution of this household income also influence the demand for a good.
2
True False
The demand curve is downward sloping  
The demand curve shows an inverse relationship between price  
and quantity demanded
The demand curve has a negative slope  
3  The estimated quantity demanded is: 7.5 Kg
4  £200
The equilibrium price of Product X is £200 (the point where the supply and demand curves
intersect).
5  Market equilibrium
If a maximum price is set above the equilibrium market price, it will not have an effect on the
market equilibrium. A price ceiling will only affect the market equilibrium if it is set below the
equilibrium price.
6  A fall in the price of Product C

A fall in the price of Product C (the substitute product) would cause customers to favour
Product C compared to Product A and so the demand for Product A would fall and the demand
curve for Product A would shift to the left.
7  Complements
Cars and tyres are complementary products because an increase in demand for cars is likely to
cause an increase in demand for tyres.

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118 A n s w e rs t o 3: T he mi c ro - e c o no mi c e n v i ro n men t A C C A BT Q ue s t ion Ba nk
8  Inferior good
As household incomes rise, the demand for Product X falls because customers will prefer to
spend their additional income on what they see as ‘superior’ goods.
9  Income elasticity of demand
10
True False
The income elasticity of demand of Product MR is 1.25  
% change in quantity demanded

Income elasticity of demand = % change in income
% change in quantity demanded (sold) = 200/1000 × 100% = 20%

20%
Income elasticity of demand = 25%
= 0.8
11
True False
The demand for Product LW is said to be income elastic.  
Demand for Product LW is said to be income inelastic because the income elasticity is between
0 and 1. The statement is therefore false.
12  Necessity
Goods with a price elasticity of demand between 0 – 1 are known as necessities.
13  Their income elasticity is greater than one

Luxury goods such as Jaguar E-types have a high income elasticity of demand (˃1) and the
demand for such cars increases at a rapid rate as incomes rise.
14 Point elasticity of demand = –1.25

−7,000
% Change in demand = 28,000 = −25%
30
% Change in price = 150 = 20%
−25%
Point elasticity of demand = 20%
= –1.25
15  Market clearing price

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16
Fall in the value of British Sterling 
Increase in the price of flights to St Petersburg 
17  It guarantees a maximum price above the market equilibrium price
18  Bargaining power of Government bodies

Porter’s five competitive forces are:
 Threat of new entrants
 Threat of substitutes
 Bargaining power of customers
 Bargaining power of suppliers
 Rivalry between competitors in the same industry
19  Threat of new entrants

The marketing tactic of making key accessories unique to a particular product discourages
competitors from offering substitute products because the costs of so doing will be greater and
entry into the market made more difficult. It does not alter the balance of power of suppliers or
customers nor affect the intensity of competitive rivalry.
20  It ensures that confidential financial information is maintained securely

The cloud does not ensure this, and although there may be some security benefits to using the cloud,
in terms of a reduced need to transfer files which can give rise to data security risk, controls are
required to ensure that confidential information is maintained safely and is secure against hackers.
21 An organisation needs to process data within a reasonable time frame. This statement describes
the Big Data characteristic of Velocity .
22  Better decision making and business performance
23
Process automation The use of robots to carry out low level, repetitive tasks
Artificial intelligence The use of machines in decision-making
Remember that artificial intelligence contains the ‘decision-making’ element.

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120 A n s w e rs t o 3: T he mi c ro - e c o no mi c e n v i ro n men t A C C A BT Q ue s t ion Ba nk
Answers to multi task questions
QUESTION ONE
Task 1
Correct Incorrect
It is defined as the percentage change in price divided  
by the percentage change in demand.
An item which has price elasticity greater than one is  
price insensitive.
An item that has an elasticity of less than one is said to  
be inelastic.
If demand for an item is inelastic and its price falls,  
total revenue will decrease.
Task 2
Rise Fall
A rise in the demand for consumer credit  
A rise in business investment  
A rise in the exchange rate  
A rise in the demand for housing  
QUESTION TWO
Task 1
The quantity of Product X supplied would decrease 

The quantity of Product X purchased would decrease 
The maximum price of £150 is below the equilibrium price, therefore the quantity of Product X
supplied will decrease and the quantity of Product X demanded will increase. However, the
quantity purchased will be limited to the quantity produced. Therefore, the quantities of
Product X supplied and purchased would both decrease.
Task 2
True False
Inferior goods have a negative income elasticity of demand  
Elastic goods are luxuries and have an income elasticity of demand of 1  
QUESTION THREE
Task 1
 Monopolists are price takers.
 Monopolists cannot earn supernormal profits in the long-term.

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Task 2
Yes No
Supplier concentration  
Access to distribution channels  
Economies of scale  
Industry growth rate  
QUESTION FOUR
Task 1
Political Economic Social Technological

Home working    
Foreign exchange markets    
Consumer protection    
Business spending on    
research
Task 2
Perfectly competitive Not perfectly competitive

Firms are price takers.  
There is a small number of significant  
producers.
There are significant differences between  
the products each producer offers.
The Internet means that information  
about the prices set by all producers is
readily available.
New entrants need to commit significant  
financial resources to be successful in the
industry.
It is possible for firms to gain a significant  
advantage by introducing new
technologies.
Firms in the industry operate an unofficial  
system of price maintenance to keep
profit levels at a reasonable level.
There is considerable movement of  
labour between firms operating in the
market.

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122 A n s w e rs t o 4: O rg an i s at i on al s t ru ct u re A C C A BT Q ue s t ion Ba nk
Chapter 4: Organisational structure

1  Compliance
2  Direct supervision
The main job of the strategic apex is to make sure that the organisation is on course to
complete its mission.
3  There is local decision making
4  Operating staff
Operating staff is not one of the components of all organisations, according to Mintzberg, but
the Operating core is.
5
Increasing average span of control 
Increasing the number of middle management redundancies 
When organisations ‘delayer’ they increase the average span of control, reduce the number of
middle management jobs and become flatter in structure.
6  Middle management
Middle management is not one of the classifications of the Anthony hierarchy. Robert Anthony
classified managerial activity as: strategic, tactical and operational.
7  Functional departmentation
Functional departmentation involves organising people who do similar tasks to work together.
8  Centralisation leads to greater co-ordination and control but less flexibility

Centralisation leads to greater control and co-ordination, but it is decentralisation which leads
to greater flexibility.
9  Scalar chain

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 4: O rg an i s at i on al s t ru ct u re 123
10  The number of employees working for a manager

The span of control or the span of management indicates the number of subordinates /
employees who report directly to a superior/manager.
11
True False
The tactical roles are Guardian and Advisor roles  
Co-ordinators are responsible for implementing decisions  
Guardians ensure that the decision is implemented within the time  
and budget specified at the tactical level
The tactical roles are the Guardian and Coordinator roles (not Advisor).
Guardians ensure that the decision is implemented within the time and budget specified at the
strategic level.
12  Primary activities
Primary activities: inbound logistics, operations, outbound logistics, marketing and sales and
after-sales service.
13  Support activities
Support activities provide support to the primary activities.
14  Outbound logistics
Primary activities include: inbound logistics, operations, outbound logistics, marketing and sales
and after-sales advice.

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QUESTION ONE
Task 1
 Swift decisions are likely to be made at William Limited.
 William Limited is organised in a matrix structure.
Task 2
Rule Providers Experts Advisors

Provide input and analysis to ensure   
that decisions are made with the best
available information
Provide extra or specialised   
information if it is required
QUESTION TWO
Task 1
 Quicker decisions are made.
 Standardisation will be increased.
Task 2
Strategic Tactical Operational

Owen, who deals with customers with   
queries in a local branch
Mark, who uses his marketing expertise   
to advise on how the branch network
should develop
Sasha, a senior management accountant   
who compares branch performance with
budgeted performance and investigates
variances
Sunil, a regional manager with a number   
of local branch managers reporting to
him, who is responsible for the overall
performance of his region
QUESTION THREE
Task 1
 They develop spontaneously.
 They reflect patterns of power and influence.
Informal networks neither directly support or undermine formal authority or management
objectives, but they do emerge spontaneously and are often influenced by the patterns of
unofficial power and influence within an organisation.

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 4: O rg an i s at i on al s t ru ct u re 125
Task 2
Entrepreneurial Functional Matrix Divisional

Head office has limited role,    
mainly offering support
services
Culture created by business    
founder
Organisation is based on tasks    
involved in projects
Individuals’ influence depends    
on the roles they have rather
than their personal qualities
QUESTION FOUR
Task 1
 It allows for a mix of skills and expertise.
 It facilitates managers being held responsible for end results.
Task 2
True False
Functional organisations are normally fluid with rapid  
information flows.
In a matrix organisation, it is possible for an individual to  
have several line managers.
Small, simple, companies dominated by one person do  
not have a succession problem as they are limited
companies.
In a divisional structure each division is largely  
autonomous.
Small companies may have perpetual succession in strictly legal terms, but will need to find
someone else to take over running the business if the company is to continue trading when the
dominant individual leaves.

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QUESTION FIVE
Task 1
Wide span of control 

Minimal hierarchy 
Task 2
Access No access
Annelise  
Louise  
Abi  
Hayley  
Annelise would be involved with payroll administration when preparing the wages each month
and Louise would have access to payroll information for all employees (as a member of the HR
department).

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 5: O rg an i s at i on al c u lt u re a n d c o mmi t t ee s 127
Chapter 5: Organisational culture and committees

1  Product, place, price, promotion
2  Mullins
3  Power
4  Masculinity / femininity
Masculine cultures are much more assertive, competitive and decisive than the more feminine
cultures which place more importance on the quality of life and personal relationships.
5  Human resources department
6  External reporting
Reporting is not one of the main management accounting functions.
7  Selection
8  Role conflict
Ilya as a union representative is experiencing role conflict. This is because he has a responsibility
to ensure the efficient management of salary costs as head of studies, but as representative of
the union would support better pay and conditions for the union members in his department
which he represents.
9  Slower decisions
Committees are appointed to make democratic, well considered and workable decisions, using
the broader expertise of a representative group of people. However, decisions arrived at by
committee can take longer to arrive at.
10  Role
11  Schwartz & Davies
12
First level 

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128 A n s w e rs t o 5: O rg an i s at i on al c u lt u re a n d c o mmi t t ee s A C C A BT Q ue s t ion Ba nk
QUESTION ONE
Task 1
True False
The main function of marketing is to maximise sales volume.  
The four Ps of the marketing mix are product, price, profit  
and promotion.
The main function of marketing is to identify and anticipate customer needs.

The Four Ps of the marketing mix are product, place, price and promotion.
Task 2
 Power distance
 Individualism
 Uncertainty avoidance
 Long-term orientation
QUESTION TWO
Task
Company A D1
Company B B1
Company C C1
Company D B2
QUESTION THREE
Task 1
Power Role Task Person

A strong team that solves problems, is    
flexible and whose main aim is to get
the job done
Strong central control of a small    
organisation by a single key figure
A stable, rational, organisation, with a    
bureaucratic culture and an authority
system based on position and function
An organisation designed to serve the    
interests of the staff within it, with
managers acting as facilitators of
staff’s contribution

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 5: O rg an i s at i on al c u lt u re a n d c o mmi t t ee s 129
Task 2
Goods and Services

services only
Physical evidence  
Promotion  
People  
Place  

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130 A n s w e rs t o 6: G o v e rn an c e and s o c i al re s p o n si b i l it y A C C A BT Q ue s t ion Ba nk
Chapter 6: Governance and social responsibility

1  Integrity
2  Provide guidance on the standards of best practice for companies to adopt
3  None of the above

Non- executive directors are not required to reassure third parties as it does not form
part of their duties and therefore cannot be viewed a disadvantage.
4  Reactive strategy
5  A company tries to reduce or avoid further obligations which may arise from a specific
problem/fault with a product
6  Non-executive directors only

Audit committees should be staffed by independent non-executive directors.
7
True False
Public listed companies and limited companies are regulated by  
corporate governance
Social responsibility only needs to be considered by a company if it  
employs more than 1,000 employees worldwide
Only public listed companies must demonstrate consideration of  
corporate governance guidelines
Adopting an ethical position or not depends on the size of the company  
concerned
Listed companies must comply or explain.
8  Confidentiality
9  1, 2, 3 and 4
All the options describe measures that will limit environmental impact or potentially reduce the
carbon footprint.
10  Accommodation

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 6: G o v e rn an c e and s o c i al re s p o n si b i l it y 131
QUESTION ONE
Task 1
True False
One of the main disadvantages of non-executive  
directors is the limited time that they have to attend to
the company’s affairs.
Only non-executive directors should staff the audit  
committee of a company.
Task 2
Chairman Secretary
Allocating discussion time for each item on the agenda  
Advising committee members of the deadlines of  
submitting items for the agenda
Informing committee members of the date, time and  
place of the next meeting
Advising committee members of the terms of reference  
for the meeting
QUESTION TWO
(a)
Non-executives Non-executives and
only executives
Remuneration  
Social responsibility  
Risk  
Audit  
(b)
Feature Not a feature
Emphasis on short-term profitability  
Lack of independent scrutiny  
Regular meetings with institutional shareholders  
Domination by a single person or small group  
Corporate governance provisions attempt to combat items 2 and 4 in this list.

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132 A n s w e rs t o 6: G o v e rn an c e and s o c i al re s p o n si b i l it y A C C A BT Q ue s t ion Ba nk
QUESTION THREE
Task
Proactive Reactive Defensive Accommodation
Issues widely-drawn disclaimers of    
responsibility for faults with products
Only deals with problems with products    
when complaints are made by consumers
Withdraws a whole range of products    
from sale when a fault is found with one
product in the range
Has regular meetings with consumer    
groups and makes changes to the product
specification in the light of the feedback
from these meetings

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 7: Sys t e ms , c o n t ro l s an d c o mp li an c e 133
Chapter 7: Systems, controls and compliance

1  Companies House
The accounts should be filed with the Registrar of Companies at Companies House.
2  This statement is false. Management accounts do not need to comply with either
company law or accounting standards.
Management accounts do not need to comply with either company law, or accounting
standards, whereas financial accounts must comply with both.
3  An audit report which is prepared when the company’s auditors believe the accounts do
not show a true and fair view and/or have not been properly prepared in accordance
with company legislation.
4  National legislation
5  GAAP (Generally Accepted Accounting Practice)
6  Financial Reporting Council
QUESTION ONE
Task 1
Company law Accounting standards

Monthly management accounts  
Annual financial statements  
Task 2
Financial Management
accounting accounting Treasury
Preparing forecasts of cash requirements   
Investment appraisal   
Analysis of profit centre performance   
Arranging a bank overdraft facility   

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134 A n s w e rs t o 8: Co n t ro l , s e c u rit y a n d a u di t A C C A BT Q ue s t ion Ba nk
Chapter 8: Control, security and audit

1  Internal auditors report on the effectiveness of the internal control systems of the
company that they are auditing and work for
The option internal auditors report on the effectiveness of the internal control systems of the
company that they are auditing, which is not the same company that they work for is not
correct. As although an internal audit department can be outsource some of the work to an
independent firm the staff of the firm that are providing internal audit services but are not
‘internal auditors’.
2  The audit committee of the board of directors of Salisbury plc

The internal audit department is not part of the finance department and in order to reduce the
occurrence of fraud, the internal audit department reports to the audit committee of Salisbury
plc’s board of directors.
3  Distribution
4
Purchasing 
5  Statement of financial position
6  Paying the supplier once the goods have been received

The supplier is paid by the accounts department once the invoice has been received and checks
have been made to establish the fact that the goods have been received.
7  Reconciliation
Petty cash should be reconciled when the petty cash float needs to be replenished and a bank
reconciliation should be performed at least once a month. This should DETECT any
discrepancies.
8  Internal control
9 Physical
Personnel

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 8: Co n t ro l , s e c u rit y an d au di t 135
10 Organisation
Management
11
True False
Internal audit is part of the internal control system of an organisation.  
Internal audits are carried out for the purpose of reporting to the  
shareholders of an organisation.
External audits examine the published accounts of an organisation and  
the report their findings in the form of an audit report.
Internal audit is part of the external audit system  
12
Yes No
Compliance tests  
Substantive tests  
13  To identify errors or omissions in the accounts

Substantive testing when carried out as part of an audit is designed to identify errors and
omissions in the accounts.
14  Operational audits
Operational audits are also known as: management, efficiency or ‘value for money’ audits.
15
No 
Without audit manuals and working papers of the internal audit department being available for
inspection, the audit manager cannot rely on the word of the Finance Director. The audit
manager must be able to inspect documentary evidence before he can judge whether he can
rely on the work of the internal auditors.
16  A system which shows personnel who have accessed a computer system and logs any
changes that have been made.
17  To give an opinion on whether the financial records of an organisation give a true and fair
view of the accounting records of an organisation
The primary purpose of an external audit is to review the accounting records of an organisation
and to give and opinion as to whether the financial statements of the organisation represent a
true and fair view of that organisation.

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18
True False
Only internal auditors can review the controls of the organisation  
they are auditing.
External auditors cannot rely on the work of internal auditors, but  
internal auditors can rely on the work of external auditors.
External auditors can review the controls of the organisation they  
are auditing.
External auditors can rely on the work of internal auditors provided  
that it has been proved worthy of having such reliance placed on it.
19  Board of directors
The Board of directors (if an organisation had an audit committee in place, then the internal
auditors would report direct to this committee).
20  Shareholders
21  To establish whether a figure is appropriate

Substantive tests are tests for accuracy and they are used to establish facts. The other tests are
less specific and arguably more subjective.
22  Transaction processing system

At the operational level, systems connected to individual and batches of input and output
processes are known as transactional. Management information, knowledge management and
decision support systems are more relevant to the tactical and strategic levels.
23  Goods inwards
Reviewing suppliers’ signatures on delivery notes would be a review of a goods inwards control
relating to verifying the authenticity and origin of supplies. The other controls are either more
general such as quality or to do with other specific functions such as despatch to customers and
credit control.
24  Disruption of business operations by misdirection of computer systems

 Theft of data held by the company by hackers
These two are the major elements that cybersecurity is designed to protect. The security
systems cannot prevent misuse of information by an employee who is entitled to access
that information as part of their job. Neither can they ensure that employees implement
IT controls (such as using passwords and changing them regularly). While the system can
prompt for such changes, the strength of the password used/changes to it are still in the
control of the employee and can make the system vulnerable.

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QUESTION ONE
Task 1
General Application
Limit checks on amounts input  
Insisting staff change their password every 30 days  
Production of a list of all transactions processed for  
management review
Forbidding staff to take laptops away from the  
company’s premises
Task 2
E I; H II; C III; B IV
QUESTION TWO
Task 1
 Phil
Task 2
Phil Jill Both Neither

Assessing whether the financial    
statements comply with international
financial reporting standards
Reviewing the security controls over    
Hightower’s IT systems
Carrying out a value-for-money audit    
of Hightower’s operations
Signing the audit report on    
Hightower’s accounts
Investigating possible theft of    
inventory from Hightower’s stores
Reporting to Hightower’s    
management weaknesses in internal
control found during the course of the
audit work
If Jill is just an employee, she will not have the authority to sign audit reports. Both Phil and Jill
should report control weaknesses they have found, even if testing controls is not the primary
purpose of their work.

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QUESTION THREE
Task 1
Purpose Not a purpose

Identifying errors and omissions in accounts  
Obtaining evidence that the internal controls of an  
organisation are working satisfactorily
Task 2
Bank Credit
and cash Purchasing Stores control
Dispatch of goods only on receipt    
of a sales order
Comparison of bank paying-in slips    
against records of monies received
Review of overdue accounts    
Comparison of invoices received    
with orders
QUESTION FOUR
Task 1
Input Output
Time sheets  
Payslips  
Payroll analysis  
Bonus details  
Task 2
Not
Involved involved
Andrew  
Jenny  
Aidan  
Abdul  

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QUESTION FIVE
Task 1
Keypad entry 
Security guards 
Task 2
True False
External auditors are appointed by the shareholders of the  
Internal audit is part of the external audit system.  
Work done by the internal audit department of a company can  
never be relied upon by the external auditors.
External auditors are appointed by the Chief Executive of the  

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140 A n s w e rs t o 9: I d e nt i f yin g an d p re v e n t in g f rau d A C C A BT Q ue s t ion Ba nk
Chapter 9: Identifying and preventing fraud

1  Teeming and lading
2
Directors 
3  In order to overstate profits and net assets.
4
Failing to check references of new members of staff 
5
Loss of assets 
6
True False
Window dressing of financial statements is where transactions are  
manipulated to make the statement of financial position look
stronger.
Opportunity is not a pre-requisite for fraud.  
7  Shareholder returns may be higher than they should be

Shareholder returns will be lower, not higher than they should be. If the results of an
organisation were deliberately OVERSTATED then the profits distributed to shareholders would
be higher than they should be because profits would have been intentionally overstated.
8  Teeming and lading

Teeming and lading is one of the best known frauds in the sales ledger area.

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 9: I d e nt i f yin g an d p re v e n t in g f rau d 141
9  Suspicious Activity Report

‘With regards to money laundering, it is an offence to fail to disclose knowledge or suspicion of
money laundering.
Failure to make a Suspicious Activity Report A (SAR), on an SAR form, disclosing knowledge or
suspicion of money laundering…’
10
Layering 
11
Yes No
Laundering  
Failure to report  
Tipping off  
The question does not say that Fred’s accountant has failed to report this to the authorities.
12  Collusion
13  Identification of areas of potential risk

Before fraud can be prevented it is first necessary to identify areas where fraud is likely to occur
before preventative measures can be taken.
14  5 years
15  A Suspicious Activity Report
16
In order to privately purchase a business asset at below market value. 
In order to pay HM Revenue & Customs less tax than the company is actually liable for. 

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142 A n s w e rs t o 9: I d e nt i f yin g an d p re v e n t in g f rau d A C C A BT Q ue s t ion Ba nk
QUESTION ONE
Task 1
1 Placement 2 Layering 3 Integration
Task 2
C1; B2
QUESTION TWO
Task 1
Prerequisite Not a
prerequisite
Dishonesty  
Motivation  
Manipulation  
Opportunity  
Manipulation is not a prerequisite of fraud it is a method of carrying out.

Task 2
I II III
The transfer of money from business to business, or place to   
place, in order to conceal its initial source.
The initial disposal of the proceeds of criminal activity into an   
apparently legitimate business activity or property.

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 10: L e ad i n g an d man ag i ng i n di v i d u al s a nd t e ams 143
Chapter 10: Leading and managing individuals and teams

1  Responsibility is the liability a person has to carry out their duties whereas authority is
the right a person has to do something.
2
Planning 
Commanding 
Controlling 
Organising 
Co-ordinating 
3  F W Taylor
4
Economic performance 
5  Interpersonal, informational and decisional
6
True False
Elton Mayo was the founder of the Human Relations Movement.  
7 Ashridge Model
8  Impoverished
9
Doing things right 
Maintaining rather than developing 
10  Power

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144 A n s w e rs t o 10: L e ad i n g an d man ag i ng i n di v i d u al s a nd t e ams A C C A BT Q ue s t ion Ba nk
11  Kotter
12  Spokesperson (this is a task of the informational managerial role).
13  1 and 4
Only the Task and Authoritarian styles have the value of the task rated at 9 on the Blake and
Mouton grid, so these are the most task efficient styles.
14  Middle of the Road

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QUESTION ONE
Task 1
Concern for people 
Concern for task 
Task 2
True False
Statement 1 Task-orientated leadership is advisable in a crisis  
Statement 2 There is no ideal leader, different leaders will do  
well in different situations
QUESTION TWO
Task 1
Asking what and why 
Challenging the status quo 
Task 2
Concern for task Concern for people

Country club Low High
Team High High
Authoritarian High Low
Impoverished Low Low
QUESTION THREE
Task 1
 Organising
 Commanding
Task 2
Responsible Not responsible

Failure to ensure effective team management  
Failure to allow the team enough time to develop  
Marcus has allowed the team to develop as it was performing well initially, but because of the
later failures, has clearly failed to manage the team effectively overall.

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(1) Recruitment and selection
1  Costs may be higher than other methods
2
Recruitment process stage First Second Third
Advertise job internally   
Identify need for new recruit   
Prepare job description   
3  Job advertisement
4  The fee may be the most important thing

Recruitment consultants will earn a fee for introducing candidates to the organisation, but they
may not necessarily be the best candidates if the agency is most concerned with earning a fee
for its work.
5  Open
Open questions reveal the most about a candidate as they encourage candidates to talk.
6
The interview is only as good as the interviewer 
Assessment is subjective 
7
Advantage Disadvantage
Management skills can be identified  
The impact of team work can be identified  
Decisions may be divided  
Time consuming and expensive  
8  Personality test
9  It is standardised

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10
Case studies 
Role-play exercises 
11  Job analysis
12
Job title 
Who she reports to (her line manager) 
13  One-to-one or individual interviews
14  Analytical
15  It is an opportunity to assess interpersonal skills

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QUESTION ONE
Task 1
 References
 Interview
Task 2
 They can take a long time
 They can be expensive
QUESTION TWO
Task 1
(1) Investigate need for new post
(2) Check the budget exists to recruit
(3) Identify selection criteria
(4) Prepare particulars of the job
(5) Decide how to find applicants
(6) Arrange external advertising
(7) Conduct interviews
(8) Request references
Task 2
Application Selection
forms Interviews testing Consultants
Provides objective assessment    
of intelligence and aptitude
Provides factual information in    
standard form
Allows assessment of non-    
verbal communication
Provides external view of    
candidates

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QUESTION THREE
Task 1
Recruitment Selection
Contracting an agency to headhunt a new Chief Executive for an  
organisation
Carrying out the first and second interviews before appointing the  
new Chief Executive of an organisation
Task 2
Checking references 
Reviewing results of aptitude tests 

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(2) Diversity and equal opportunities
1  Harassment
2
Direct discrimination 
Victimisation 
3  Victimisation
4  Indirect discrimination
5  II only
XYZ Ltd appears to have indirectly sexually discriminated against Anna, but she didn’t get the
job because she was not as well qualified for it as the other candidate, who just happened to be
male. Anna would not have a successful indirect sexual discrimination case in this instance.
6
Additional training provided for certain employee groups where there is a 
requirement
7
True False
Specifying 21-25 years old in the advert is age discrimination  
Specifying ‘recent graduate’ in the advert is age discrimination  
8  Positive action

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QUESTION ONE
Task 1
Direct Indirect
Discrimination on the grounds on sex  
Discrimination on the grounds of age  
Task 2
True False
Diversity in the workplace is the same as equal opportunities  
Discrimination relating to sex, race and disability are governed by law  
Equal opportunities is about individuals having equal opportunity regardless of sex, age etc.
Diversity is about positively valuing differences in the workplace.

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152 A n s w e rs t o 11: I n d i v id u al s , g ro u p s a n d te ams A C C A BT Q ue s t ion Ba nk
Chapter 11: Individuals, groups and teams

1  Context
2
True False
A group is a collection of individuals who are in the same vicinity but  
who do not interact with each other
A team is a collection of individuals who interact with each other but  
who are not linked by a common purpose
A group – a collection of individuals – who interact with each other.

A team – a collection of individuals – who interact and are linked by a common purpose.
3
Delayed final decision 
Conflict 
4  Nine roles
Originally Belbin’s work referred to eight team roles. Later, a ninth role was added (‘specialist’).
5  Completer Finisher
6
Problem solver 
Ignores details 
7
Forming Storming Norming
Team members begin to trust each other at this stage   
Team members behave relatively independently at   
this stage
Team members put forward their ideas for the rest of   
the team to consider at this stage

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 11: I n d i v id u al s , g ro u p s a n d te ams 153
8  Identity
Identity. A group is a collection of individuals who all identify themselves as being part of a
group, i.e. they have an identity.
9
Quantitative factor Effective Ineffective
Labour turnover is high  
Absenteeism is high  
Output and productivity is high  
10  Multi-disciplinary team
The correct response is not multi-skilled team as even though people work in different
departments that does not equate to them having different skills as they could have the same
skills for example numeracy, literacy.
A multi-disciplinary team contains people from different specialist areas in an organisation for
example sales, product design and finance.
11  Resource-investigator
The scenario accurately describes the resource-investigator.
12
Effective Ineffective
Individual targets are achieved  
Team members are suspicious of each other  
High quality of output is produced  
15  Norming
16  Conformity

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QUESTION ONE
Task 1
B I; D II; G III; F IV
Task 2
Forming Storming Norming Performing

Team members are now competent,    
autonomous and able to handle the
decision-making process without
supervision.
Different ideas compete for    
consideration.
Team members tend to behave quite    
independently.
Team members are expected to take    
more responsibility for making decisions
and for their professional behaviour.
QUESTION TWO
Task 1
E I; A II; H III; D IV
Task 2
 Teamworking can be used to combine the skills of different individuals.
 Teamworking can facilitate communications between different business functions.
Teamworking may mean that compromise decisions are reached rather than the best decision
for the organisation. Failure to consider alternative strategies will often be a weakness rather
than a strength.
QUESTION THREE
Task 1
Empathy 
Co-operation 
Task 2
True False
Adjourning is when a team becomes complacent about the task that it  
is performing
Dorming is when a team has finished one task and is waiting to  
commence the next one
Adjourning is when a team has finished one task and is waiting to commence the next one.
Dorming is when a team becomes complacent about the task that it is performing.

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QUESTION FOUR
Task 1
True False
Team BIG is performing as an effective team  
Based on the above information, it is not possible to make a preliminary  
assessment of team BIG’s performance
Task 2
 High absenteeism from team meetings
 Poor understanding of individual roles within the team

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(1) Motivating individuals and groups
1
Content Process
Theory Theory
What things are individuals motivated by?  
How can individuals be motivated?  
2  Affection
3
Responsibility 
Promotion 
4  Job security
5
True False
The most primitive need is ‘Safety’ and it is at the bottom of the pyramid  
Self-actualisation is the easiest need to satisfy  
The most primitive need, which is at the bottom of the pyramid is ‘Physiological’.
Self-actualisation is the most difficult need to satisfy.
6  Their motivation will increase

Motivation will increase.
It is a product of V (Valence) and E (Expectancy).
7
F=V×E 
8
The average employee dislikes work and will avoid it where possible 
Most employees must be forced to work towards an organisation’s objectives 

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9  Job enrichment
10  Job enlargement
11  Piecework scheme
12
Pay and benefits 
13  McGregor
McGregor – in his X-Y Theory
14  Answer = 0.09 (0.9 × 0.1)
15  Job enlargement
16  The strength of an individual’s preference for a given outcome
17  Tolerant
18  Intrinsic motivation

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QUESTION ONE
Task 1
Motivator Hygiene
One-off year-end bonus to reward contribution during  
the year
Competitive salary  
Comfortable office  
Opportunity to mentor new staff  
Task 2
Theory X Theory Y
Individuals need to be told clearly the sanctions they  
will face if they do not perform adequately.
Individuals will naturally direct their work towards  
meeting organisational objectives.
Individuals are naturally resistant to change.  
Most individuals do not seek advancement within the  
organisation.
QUESTION TWO
Task 1
Receiving excellent references from your employer when you apply for a new job 
due to a house move
Coming top in your Accountancy examinations 
Task 2
Content Process
Theory Theory
Vroom’s Expectancy Theory  
McGregor’s X-Y Theory  
Maslow’s hierarchy of needs  
Herzberg’s Motivation-Hygiene Theory  

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QUESTION THREE
Task 1
 Valence
 Expectancy
This means that a person will be motivated if the reward is both sufficiently attractive and
attainable.
Task 2
True False
Affection is a physiological need.  
Relationships are a social need.  

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160 A n s w e rs t o 12: T rai n i ng a n d d e v e l o p me nt A C C A BT Q ue s t ion Ba nk
Chapter 12: Training and development

1  Increased staff costs
2  Reflector
3
Search for new ideas and keen to experiment 
Act quickly and confidently on ideas and get straight to the point in a discussion 
4  Behaviour
5
Development Education
Knowledge acquired gradually by instruction and learning  
The growth or realisation of an individual’s potential and ability  
through the provision of learning and educational experiences
6
Increased skills 
More interesting work 
7
Acting    
Thinking    
Experiencing    
Reflecting    
8  Accommodating
9  Assimilating

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 12: T rai n i ng a n d d e v e l o p me nt 161
10
True False
The first stage in the training and development process is to set  
objectives for the skills and competences required to fulfil the overall
strategy
The final stage in the training and development process is to check to  
ensure that the objectives have actually been met
The first stage in the training and development process is to identify the skills and competences
needed to fulfil the overall strategy. The second stage involves setting objectives for the skills
and competences that are required.
11  Pay salaries
This is the function of the Payroll/Finance Department.
12  Being thrown in at the deep end without notes and instructions

This kind of learner will prefer readings, lectures, exploring analytical models and having time to
think things through.
13 
Kolb 
14
Increased productivity 
Greater staff flexibility 
15
Putting ideas and theories into practice 
Acting quickly and confidently on ideas and ‘getting straight to the point’ 

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QUESTION ONE
Task 1
 Better performance at work
 Self confidence
Increased flexibility and improved staff retention are benefits to employers and NOT employees.
Task 2
 Improved performance of staff
 Staff job satisfaction
Staff job satisfaction can lead to improved retention (hence the company continues to use the
investment in that individual). Improved performance is a benefit to the company. Reduced cost is
unlikely to result as improved staff may demand improved wages. Improved employability is an
advantage to the individual but may be a disadvantage to the entity, if the person leaves as a result.
QUESTION TWO
Task 1
Conclude Do Review Plan

Activists    
Reflectors    
Theorists    
Pragmatists    
Task 2
Doing 
Thinking 

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QUESTION THREE
Task 1
 Immerse themselves fully in new experiences
 Open-minded, enthusiastic and flexible
Activists immerse themselves fully in new experiences and are open-minded, enthusiastic and
flexible.
Task 2
Diverging Assimilating Converging Accommodating

Amrish requires clear explanations    
and organises information
received in clear formats.
Helga develops by solving    
problems and finding practical
uses for theories.
Yen-pei prefers to work in groups    
so that she can understand varying
perspectives of different people.
Jaitinder prefers to act on instinct    
and intuition rather than logic and
analysis.

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(1) Performance appraisal
1  On-the job training
2
Agree feedback    
Agree resources    
Agree rewards    
Agree objectives    
3
Measurable 
4  360 degree appraisal
5
Understand organisational goals 
Understanding organisational goals is a benefit of performance appraisal to the employees of an

organisation, not the organisation itself. It is hoped that the organisation already understands
the goals it is trying to achieve before appraising its staff.
6
Allocate more time in case appraisal overruns 
Train managers to conduct honest appraisals 
7  ‘Tell and sell’ technique

This is illustrated by Ashridge Management College theory.
8  I and II only.
One of the main aims of individual performance appraisals is for feedback to be given by
employers to employees (not employees to employers, though this might be useful, it is not one
of the main aims of an individual performance appraisal).
9  Upward appraisal

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10
Subjectivity 
11  Management by objectives

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166 A n s w e rs t o 13: P e rs o n al e ff e c t i v en e s s a nd c o mmu n i cat i o n A C C A BT Q ue s t ion Ba nk
Chapter 13: Personal effectiveness and communication

1  Production
The key principles of time management are: goals, focus, urgency, priorities, action plans and
organisation. Production is not one of the key principles.
2  R = Realistic
(S = Specific, A = Attainable or Agreed, R = Realistic, T = Time-bounded)
3  Coach
Andrew is a coach. He is given the task of achieving a specific objective ie to show Peter how to
perform tasks.
4  Counsellor
Counselling is primarily a non-directive role which involves helping others to work through their
own problems and to come up with their own solutions.
5  Vertical
The information flows up and down between George (superior) and Fred (subordinate).
6
The circle communication pattern solves problems the slowest. 
The highest job satisfaction is associated with the wheel communication pattern. 
7  II and III
II and III. Lateral communication (also known as horizontal communication) takes place between
people of the same rank (one member of a peer group and another and the heads of different
departments). I describes vertical communication.
8  Distortion

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 13: P e rs o n al e ff e c t i v en e s s a nd c o mmu n i ca t i o n 167
9
Objective of communication Method
Face-to-face communication between chief executives in two offices which are Video
100 miles apart conferencing
Written record of a confidential matter Letter
To reach the staff of several head offices in several countries around the world Email
10  Operational
The qualities of information are: accurate, complete, cost-beneficial, user-targeted, relevant,
reliable, authoritative, timely and easy to use.
11  Lack of co-ordination
Poor lateral communication leads to lack of coordination. The other common business problems
are connected with upward or downward channels of communication or lines of authority.
12  Wheel
13  The communication response from the recipient
14  Progressive

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QUESTION ONE
Task 1
 Specificity
 Communication
Task 2
 Producing a daily plan listing the tasks that have to be done that day
 Only having on his desk material relating to the work that he is currently doing
 Organising his work in batches requiring the same files and materials
 Taking some action every time he reads a piece of paperwork
QUESTION TWO
Task 1
Circle Chain Y Wheel

A central figure has the information    
to co-ordinate the task.
There is no obvious leader.    
Each member of the group can only    
communicate with one or two other
people.
It is likely to be a quick method of    
solving problems.
Task 2
1 Sender
2 Coded message
3 Decode message
4 Receiver
5 Feedback

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 13: P e rs o n al e ff e c t i v en e s s a nd c o mmu n i ca t i o n 169
QUESTION THREE
Task 1
Coaching Counselling Appraising Mentoring

The new trainee is allocated a more    
experienced staff member who acts as
a sounding board on their career
development.
The new trainee is allocated a more    
experienced staff member who is
given responsibility for helping the
trainee to learn new skills on the job.
The new trainee has regular sessions    
with her line manager reviewing
progress and setting objectives for the
next period.
The line manager discusses with the    
new trainee concerns that other staff
have raised about the trainee’s work.
Task 2
 It allows for the strengths and weaknesses of the trainee.
 It gives the trainee the opportunity to broaden knowledge and experience.
QUESTION FOUR
Task 1
Face to face
meeting Email Report Notice
Provision of information about the    
date, time and venue of the next
quarterly staff meeting.
Provision of information about new    
working arrangements and answering
staff queries about the changes
Provision of detailed analysis of    
competitor strategies and new
products over the last two years
Provision of information about    
procedures to be followed if a fire
alarm is raised

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Task 2
Selective Non-verbal
Overload hearing Misunderstanding signs
Kevin is meant to have a meeting with    
Paula to deal with urgent queries she
has raised at 10am one morning.
However at 10am Kevin is still in a
previous meeting that has overrun. At
the end of this meeting Kevin is
summoned to see his Managing
Director, Col, and is with Col until
lunchtime. At the end of the morning
Kevin has still not seen Paula.
During the first part of the afternoon    
Kevin holds a meeting about plans for
future work for an important client.
During this meeting Kathy raises a
number of concerns about these
plans, but Kevin checks his text
messages while she is talking.
In the later afternoon Kevin holds a    
general staff meeting at which Col
speaks briefly, saying how well the
business is doing at the moment.
During the meeting staff express
concern about the number of staff
that have left since the last staff
meeting. After the meeting Kevin
emails Col to say that he felt the
meeting couldn’t have gone better.
Paula finally manages to see Kevin at    
the end of the afternoon. She says
that she does not think there will be
sufficient staff resource to complete
the work she is managing to meet the
deadline in two weeks’ time. Kevin
tells her that he is currently recruiting
new staff to replace those who have
left and they will be joining the
company over the next few months.

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A C C A BT Q ue s t ion Ba nk A n s w e rs t o 14: P ro f e ss i o n a l e t h i cs 171
Chapter 14: Professional ethics

1  A fiduciary duty
2
Relativity 
Ethnicity 
Relativity and ethnicity are not concepts of Corporate Governance.
3  Deciding on the course of action which results in the most useful outcome for as many of
the people involved as possible
Utilitarianism is the best-known ethical principle that is based on the outcome or consequence
of a decision taken.
4  II only
I is a criticism of egoism and III is a criticism of absolutism.
5  Whistle blowing
6
Reliability  
Timeliness  
Courtesy  
Respect  
Scepticism  
Accountability  
Independence  
7  Self-review threat
Self-review threat. There is clearly a conflict of interest arising if ABC & Co. are both preparing
the financial statements of ZEBRA plc and auditing them. This conflict of interest is known as a
self-review threat.

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172 A n s w e rs t o 14: P ro f e ss i o n al e t h i cs A C C A BT Q ue s t ion Ba nk
8  False
An integrity-based approach to managing ethics COMBINES ensuring that the organisation acts
within the law with managers also taking responsibility for ethical behaviour.
9  Professional competence and due care

It is impossible for you to comment on whether the expenses claimed by the budget holder’s
husband are legitimate business expenses or not without seeing details of the accounts
themselves. That said, it is likely that you would need to have a qualification (such as a
practising certificate) before you are able to give financial advice to anyone.
10  Listed/public interest companies = 10%, other companies = 15%
11  Guarantee of minimum wages

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QUESTION ONE
Task 1
Self-review Advocacy Familiarity Intimidation
Provision of legal advice to client    
Practice having acted for client for 20 years    
Audit team carrying out audit and preparing    
client’s accounting records
Accountant only receiving fees from client if a    
successful outcome is achieved
Task 2
 Independent review by a senior partner in the firm
This would add to the threat of self-review at the firm level. If the work is divided between different
teams and information barriers exist, this might become appropriate. The other options are all
suitable safeguards against self-review, although they might not all be sufficient independently.
QUESTION TWO
Task 1
Independence  
Reliability  
Scepticism  
Courtesy  
Respect  
Accountability  
Timeliness  
Task 2
Self-interest Advocacy Familiarity Intimidation

An audit senior having an affair with a    
member of the client’s finance team
A client threatening to sue an    
accountancy practice if the practice
qualifies the client’s audit report
A client giving the audit partner tickets    
to a major sporting event
An accountancy firm providing a client    
with advice on debt reconstruction
and negotiating on the client’s behalf
with the bank

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QUESTION THREE
Task 1
 Professional competence
 Professional behaviour
 Confidentiality
 Objectivity
Task 2
Social
responsibility Independence Scepticism Accountability
Carrying out responsibilities    
without bias or prejudice
Taking responsibility for    
own work and decisions
Questioning information    
provided to be able to form
an opinion on its reliability
Acknowledgement of a duty    
to act in the public interest
QUESTION FOUR
Task 1
Independence Responsibility Timeliness Respect
Anne is chairing a meeting of senior    
managers in the accountancy firm
where she works that is due to start
at 10am. Although not all the
managers have arrived on time, Anne
starts the meeting precisely at 10.
During the meeting the managers    
discuss an important deadline that
staff whom Anne manages have failed
to meet. Anne acknowledges that the
failure was her fault as team manager
and states that she will discuss what
happened with her team.
During the meeting with her team,    
Anne asks them to explain the
reasons why they failed to meet the
deadline and raise any concerns they
have with the way the work was
carried out.
At the end of the day Anne hears that    
her daughter has been recruited by
the Accounts department of an
important client of the firm. When
she gets in the next morning, Anne
emails the Senior Partner to say that
she can no longer do any work on that
client’s affairs.

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Task 2
Compliance Integrity
Underpinned by external regulation  
Based on assumption that individuals focus on  
their own self-interest
Aims to promote values and responsible behaviour  
Allows employees discretion in their actions  
depending on situation
QUESTION FIVE
Task 1
Acting in public Not acting in public

interest interest
An auditor publicly disclosing the identity of a  
whistleblower at a client organisation
An employee of an airline company reporting  
unsafe practices
An auditor of a charity reporting a material fraud  
An accountant at a listed company reporting illegal  
accounting to a stock exchange regulator
All the actions help to protect the public interest except the first one, which may serve to
prejudice further investigations or prevent effective prosecution, and may dissuade other
whistleblowers from acting in the public interest themselves in future cases.
Task 2
Legal Illegal
Tax avoidance  
Tax evasion  
Tax avoidance is a way of managing tax affairs to mitigate tax liability legally. Tax evasion is
illegal.

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177
ACCA
Practice Examination
Time allowed: 2 hours
All questions are compulsory and MUST be attempted

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178 P rac t i c e e xam q u es t i o n s A C C A BT Q ue s t ion Ba nk
Section A
All 46 questions are compulsory and must be attempted.
1 Classify the following as either injections into or withdrawals from the economy.
Export income  
Taxation  
Government spending  
Saving  
(2 marks)
2 Which of the following selection tests is a type of aptitude test?

 Verbal reasoning test
 Intelligence test
 Personality test
(1 mark)
3 According to Blake and Mouton’s Managerial Grid, a manager who enjoys good relationships
with his staff, attending to their needs as required, but has little concern for the results
achieved, gives rise to a managerial style that is described as:
 Country Club
 Impoverished
 Team
(2 marks)
4 Which one of the following is NOT once of the classifications included in Maslow’s hierarchy of
needs?
 Growth
 Self-actualisation
 Physiological
(1 mark)
5 According to Herzberg’s ‘Motivation-Hygiene’ Theory, which TWO of the following would NOT
be classed as motivation factors?
 Annual salary and bonus
 Job security
 Responsibility
 Promotion
(2 marks)

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A C C A BT Q ue s t ion Ba nk P ra c t i c e e xa m q u es t i o n s 179
6 According to Kolb, an individual who is able to look at things from different perspectives, is
sensitive, imaginative and emotional, is interested in people and prefers to work in groups can
be described as having which of the following preferred learning styles?
 Accommodating
 Diverging
 Converging
 Assimilating
(2 marks)
7 Identify whether the following benefits of the appraisal system are relevant to the employee or
to the organisation.
Organisation Employee
Explain organisational goals  
Understand organisational goals  
(2 marks)
8 Which section of the human resources cycle is concerned with motivating staff and making sure
that they stay with the organisation?
 Selection
 Performance
 Rewards
(1 mark)
9 Anya believes that she is superior to the organisation she works for. Her boss finds her quite
difficult to manage because she has very strong ideas about how best to do her job.
According to Handy, in which of his four cultural stereotypes does Anya belong?
 Power
 Role
 Task
 Person
(2 marks)
10 Janet is a major customer of A Ltd and accounts for 75% of A Ltd’s turnover in the year. Amy
owns 60% of A Ltd’s share capital has never missed one of the company’s general meetings.
Jack is a reporter for a local newspaper and often reports on local firms such as A Ltd.
According to Mendelow, which TWO of the stakeholders should A Ltd involve?
 Janet
 Amy
 Jack
(1 mark)

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11 Wasim is a part-time worker who has lost his driving licence after accumulating several points
for speeding. His employer, B Ltd, has decided that it will be difficult for him to carry out his job
if he does not have a valid driving licence. B Ltd has written to Wasim to give its reasons for
dismissal in writing. Wasim believes that he has a claim for unfair dismissal against B Ltd. Which
TWO of the following statements regarding this scenario are TRUE?
 Loss of driving licence is unlikely to be a successful unfair dismissal in a claim by Wasim.
 B Ltd does not need to give reasons for Wasim’s dismissal in writing, it is sufficient to tell
him face-to-face.
 Only full-time employees may claim for unfair dismissal.
 There is a minimum period of employment required to claim for unfair dismissal
(2 marks)
12 What is the main factor most likely to be responsible for the following?
 Planning for the long-term is difficult.
 Interest rates are rising.
 Wealth is redistributed from accounts receivable to accounts payable.
 Inflation
 Deflation
 Stagnation
 Unemployment
(2 marks)
13 If the price of flights to Berlin from London were reduced by AB Air, then which TWO of the
following situations are most likely to arise?
 The demand for hotel rooms in Berlin would fall.
 The demand for hotel rooms in Berlin would rise.
 Rival company CD Air would reduce the price of its flights to Berlin.
 Rival company CD Air would increase the price of its flights to Berlin.
(2 marks)
14 A management structure that has few managers with a wide span of control, where decisions
are made quickly and is more susceptible to fraud or error is known as what type of
organisation?
 Long scalar chain
 Short scalar chain
 Centralised
 Decentralised
(2 marks)

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15 According to Anthony’s hierarchy of roles in an organisation, which of the following statements

relating to the operational level is NOT true?
 Providers are responsible for ensuring that the infrastructure is available to meet the
requirements of the customers.
 The customers are the beneficiaries of the system.
 The more efficiently and cost effectively the customers supply their services, the less
money that organisation spends on Total Cost of Ownership.
(1 mark)
16 Identify whether the following statements are TRUE or FALSE.

True False
The primary purpose of an external audit is to report any errors to  
the shareholders of the company being audited.
Internal auditors of a company are likely to report to the Finance  
Director of that company.
Auditors will carry out compliance tests if they wish to obtain  
evidence that the internal controls of an organisation are working
satisfactorily.
The main aim of substantive testing, when carrying out an audit, is  
to identify any errors or omissions in the accounts.
(2 marks)
17 Non-directive exploration by one employee of another employee’s issues is known as what?

 Counselling
 Coaching
 Mentoring
 Appraising
(2 marks)
18 Which ONE of the following represents the fastest pattern of communication as identified by
Leavitt?
 The circle
 The ‘y’
 The square
 The wheel
(2 marks)
19 The Bank of England has decided to reduce interest rates by one per cent. Which of the
following departments in Relion Ltd will be most affected by this decision?
 Accounts receivable
 Sales and marketing
 Treasury
(1 mark)

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20 The Staff at Hatters IT Consultancy are organised into a number of departments:

 Programming
 Sales
 Marketing
 Accounts
Members of each of the departments work on cross departmental project teams to meet the
needs of their customers and to provide flexibility, What is the name given to the organisational
structure in place at Hatters IT Consultancy?
 Matrix
 Horizontal
 Scalar chain
(1 mark)
21 Structural unemployment would be most likely to be caused by which of the following

situations?
 Surf instructors being laid off at the end of the holiday season
 University graduates who are unable to find a job shortly after graduating
 Recession in the nightclub industry
 A reduction in demand for steel which leads to the closure of foundries
(2 marks)
22 Which of the following writers is members of the Human Relations School of Management?
 Taylor
 Adair
 Mayo
(1 mark)
23 Employees of XYZ Ltd have been notified by the Managing Director of the company that there
has been a serious fraud committed by a member of staff in the past month. At lunch time, the
accounts department are discussing the news that has broken and who has the ultimate
responsibility for the prevention of fraud at XYZ Ltd.
John thinks that it is the fraud manager.
James thinks that it is the head of internal audit.
Jackie thinks that it is the external auditors.
Jessie thinks that it is the board of directors.
Whose thinking is correct about the ultimate responsibility for the prevention of fraud?
 John
 James
 Jackie
 Jessie
(2 marks)

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24 Edward is a team member who is dynamic and thrives on pressure. He tends to be the one to
challenge and push other team members to the extent that he sometimes annoys or upsets
them. He does, however, tend to be the one to bring the team successfully through difficult
periods.
According to Belbin, Edward’s team role is described as which of the following?
 Co-ordinator
 Shaper
 Implementer
 Plant
(2 marks)
25 Which TWO of the following are ‘interpersonal’ roles of management, according to Mintzberg?
 Figurehead
 Entrepreneur
 Spokesperson
 Liaison
(2 marks)
26 It is company policy at FRAC Limited not to look too closely at the recoverability of its debts,
which results in some debts which are not recoverable remaining on the books of FRAC Limited
as recoverable.
Could FRAC Limited’s actions be considered to be a fraudulent activity?
 No – because none of FRAC Limited’s customers have been overcharged for goods or
services
 Yes – because other customers may be being overcharged as a result of FRAC Limited’s
debt policy
 No – because there isn’t any cash involved
 Yes – because it overstates the assets and profits of FRAC Limited
(2 marks)
27 Which leadership approach sees the leadership process as being made up of three interrelated
variables: task needs, the individual needs of group members and the needs of the group as a
whole?
 The managerial grid
 Dispersed leadership
 Action-centred leadership
 Contingency theory
(2 marks)

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28 Which TWO of the following are advantages of a computerised accounting system over a
manual accounting system?
 Quicker calculations can be performed
 Automatic correction of errors made by the data entry clerk
 Easier presentation of information in a variety of forms
(1 mark)
29 Which of the following appraisal methods provides input from the most people to the appraisal
of an employee?
 360 degree feedback
 Peer appraisal
 Self-appraisal
 Upward appraisal
(2 marks)
30 Which TWO of the following are fundamental principles of the International Federation of
Accountants’ Code?
 Confidentiality
 Reliability
 Social responsibility
 Integrity
(2 marks)
31 Identify which TWO of the following statements are NOT true.

 Public sector organisations are owned by the government.
 A private sector organisation is owned by the shareholders of the organisation.
 Organisations owned by private owners are always known as limited companies.
 A non-government organisation is a business owned by the workers and customers who
share the profits.
(2 marks)
32 Which of the following is NOT an advantage of an organisation having a narrow span of control?
 It is easier to control staff.
 It costs less money to run because fewer managers are required.
 Less management skill is required.
(1 mark)

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33 Identify TWO of Porter’s five competitive forces from the list shown below.
 Threat of substitutes
 Threat of complements
 Threat of new entrants
 Threat of suppliers
(2 marks)
34 Which of the following is NOT an element of monetary policy?

 Interest rates
 Taxation
 Credit controls
(1 mark)
35 If a government’s income is greater than its expenditure, then which of the following situations
will arise?
Positive Negative Surplus Deficit

Public Sector Borrowing Requirement    
(positive/negative)
Budget (surplus/deficit)    
(2 marks)
36 Which of the following will be unlikely to occur when an organisation is delayering?

 Increase in the average span of control
 Increase in the average number of middle management jobs
 Decrease in the length of the scalar chain
(1 mark)
37 The ACCA Code of Ethics and Conduct states that the public may perceive that the objectivity of
a member is likely to be jeopardised when the fees (for audit and recurring work) for one client
(or group of clients) represent a significant proportion of the firm’s total fees.
Complete the following table to identify what proportion of fees the Code identifies as being a
significant proportion.
10% 15% Judgement
Listed companies   
Other companies   
(2 marks)
38 Which of the following would NOT be classed as a connected stakeholder?

 Suppliers
 Shareholders
 Executive directors
 Customers
(2 marks)

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39 Legislation created by an Act of Parliament in the United Kingdom is known as what?

 Primary law
 Secondary law
 Common law
(1 mark)
40 Which of the following is NOT a feature of an effective internal control system?

 Audit
 Organisation
 Personnel
(1 mark)
41 Who, in an organisation, is ultimately responsible for adhering to the Data Protection Act 2015?
 Data controller
 Data entry clerk
 Data supervisor
(1 mark)
42 SWOT analysis is a method of environmental analysis which looks at the strengths, weaknesses,
opportunities and threats of an organisation.
Identify which parts of the analysis relate to an internal appraisal and which parts relate to an
external appraisal by completing the grid below.
Internal External
appraisal appraisal
Strengths  
Threats  
Opportunities  
Weaknesses  
(2 marks)
43 Which TWO of the following ‘Ps’ in the marketing mix apply specifically to the service industry?
 People
 Price
 Promotion
 Processes
(2 marks)

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44 hadn’t been any problems caused to consumers. With respect to the Agency theory, PPP
Limited is adopting which type of strategy?
 Proactive
 Reactive
 Defence
 Accommodation
(2 marks)
45 Consider the following statement and identify whether it is TRUE or FALSE:

The preparation and filing of annual accounts by limited companies is a requirement of HM
Revenue and Customs.
 True
 False
(1 mark)
46 Which of the following audits is most likely to take place in a not-for-profit organisation?
 Management audit
 Systems audit
 Efficiency audit
 ‘Value for money’ audit
(2 marks)

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Section B
All six questions are compulsory and must be attempted.
QUESTION ONE
Background
Below are descriptions of the roles of four components of Mintzberg’s organigram.
A Conversion of direction into tasks and procedures
B Provide output of organisation
C Standardise through procedures and checking
D Provision of organisational direction
Task 1
Match the role descriptions to the list of components below.
I Strategic apex
II Technostructure
III Middle line
IV Operating core
(2 marks)
Task 2
Identify which of the following are features of tall organisations and which are descriptions of flat
organisations
Tall Flat
Decisions take a long time to be implemented throughout the  
organisations
Limited opportunities for promotion  
Managers have wide span of control  
Expensive to operate  
(2 marks)
(Total = 4 marks)

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QUESTION TWO
Task 1
Identify which FOUR of the following are threats to compliance with the fundamental ethical principles
in the IFAC and ACCA Codes of Ethics.
 Confidentiality
 Scepticism
 Advocacy
 Accountability
 Self-review
 Familiarity
 Empowerment
 Intimidation
(2 marks)
Task 2
Which of the following is the best description of a business’s ethical values?
 Concepts that require staff to identify and address ethical threats
 Norms and standards of behaviour that the board believes will help the business achieve
its objectives
 Standards that ensure that the organisation and its staff and directors are answerable for
the consequences of their actions
 Standards of behaviour that ensure that managers and staff can work with each other,
and with other key business stakeholders such as customers and suppliers
(2 marks)
(Total = 4 marks)
QUESTION THREE
Task 1
Complete the following sentence using the choices below.
Consumers’ desire to maximise total utility means that the ratio of
(1) _________ to (2) _________ is equal for each good.
A Total utility
B Average utility
C Marginal utility
D Quantity demanded
E Quantity supplied
F Price
(2 marks)

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Task 2
Identify which of the following would cause the demand curve for long-distance train travel within a
country to shift right, which would cause the demand curve for long-distance train travel to shift left
and which would have no impact upon it.
Shift right Shift left No movement
A television series showcasing the pleasures of   
rail travel
An increase in air fares due to a government   
levy on air travel
An inflation-linked increase in rail fares   
A strengthening of the exchange rate, meaning   
that more people take holidays abroad
(2 marks)
(Total = 4 marks)
QUESTION FOUR
Background
Mustafa has recently been appointed as a line manager for the first time. He is concerned about how
one of his staff, Kate, is managing her time. Tasks of lesser importance without definite deadlines are
often completed quickly, but Kate sometimes misses her deadlines on preparing monthly accounting
information, which is her most important work. She also does not seem able to respond quickly to
urgent requests.
Task 1
Which of the following would NOT be a way to deal with the problems that Kate is experiencing?
 Establishing a deadline for every task
 Giving Kate assistance so that she can delegate other tasks if she is called on to carry out
an urgent task quickly
 Giving the task of preparing monthly accounting information to someone else, so that
Kate can get on with doing the work that she does most efficiently
(1 mark)
Task 2
Mustafa’s line manager has recommended that he should give Kate counselling on how to improve her
time management. Mustafa is unsure of how counselling differs from coaching and mentoring and has
asked for advice.
Fill in the gaps in the sentences below with the activity it describes.
I Counselling
II Mentoring
III Coaching
A ______ involves showing the subordinate how to perform tasks as part of a learning and
development programme. B______ is a long-term relationship that enhances the subordinate’s
personal and career development. C____ involves discussion of specific problems and therefore
boosting the subordinate’s ability to take responsibility for personal performance improvement.
(3 marks)
(Total = 4 marks)

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QUESTION FIVE
Task 1
Which FOUR of the following should be included in the accounts of a private company?
 An income statement
 A statement of financial position
 An auditors’ report
 An operating and financial review
 A corporate governance report
 A directors’ report
(2 marks)
Task 2
A business’s financial system is made up of a number of subsystems, including the following.
A Sales invoicing system
B Purchase invoice system
C Payroll system
D Credit control system
Match the features listed below to the subsystems to which they relate.
I Highlighting of payments that are not matched to orders
II Highlighting credit limits being exceeded
III Allowing customer-specific discounts
IV Allowing electronic filing of HMRC forms
(2 marks)
(Total = 4 marks)
QUESTION SIX
Task 1
Fill in the gaps in the sentences below with the name of the relevant management theorist.
Taylor
Fayol
Mintzberg
Mayo
A______ emphasised five primary functions of management – planning, organising,
commanding, controlling and coordinating, whereas B____ focused on three roles –
interpersonal, informational and decisional. C ____ emphasised the importance of work
satisfaction, founded on social relationships, whereas D ____ believed that high productivity
was based on analysis of the tasks required and detailed training and supervision of each
worker in the tasks that they were given to do.
(2 marks)

lOMoARcPSD|11199247
Task 2
Identify which of the following are characteristics of leadership and which are characteristics of
management.
Leadership Management
Concern with staff development  
Concentration on longer-term objectives  
Concern with methods and timescale  
Challenging accepted methods of doing things  
(2 marks)
(Total = 4 marks)

lOMoARcPSD|11199247
193
ACCA
Practice Examination
Answers

lOMoARcPSD|11199247
194 P rac t i c e e xam a n s w e rs A C C A BT Q ue s t ion Ba nk
Section A
1
Export income  
Taxation  
Government spending  
Saving  
2  Verbal reasoning
3  Country Club
4  Growth
5  Annual salary and bonus

 Job security
6  Diverging
7
Organisation Employee
Explain organisational goals  
Understand organisational goals  
8  Rewards
9  Person
10  Janet
 Amy
11  Loss of driving licence is unlikely to be a successful unfair dismissal in a claim by Wasim.

 There is a minimum period of employment required to claim for unfair dismissal.

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A C C A BT Q ue s t ion Ba nk P ra c t i c e e xa m a n s w e rs 195
12  Inflation
13  The demand for hotel rooms in Berlin would rise.

 Rival company CD Air would reduce the price of its flights to Berlin.
14  Short scalar chain
15  The more efficiently and cost effectively the customers supply their services, the less
money that organisation spends on Total Cost of Ownership
This is wrong it should be ‘providers’ not ‘customers’.
16
True False
The primary purpose of an external audit is to report any errors to  
the shareholders of the company being audited.
Internal auditors of a company are likely to report to the Finance  
Director of that company.
Auditors will carry out compliance tests if they wish to obtain  
evidence that the internal controls of an organisation are working
satisfactorily.
The main aim of substantive testing when carrying out an audit is to  
identify any errors or omissions in the accounts.
The primary purpose of an external audit is to give an opinion on whether the financial
statements of an organisation give a true and fair view of the profit or loss and financial position
of an organisation.
The internal auditors of a company are likely to report to the Board of Directors (or the audit
committee, if there is one), not to the Finance Director.
17  Counselling
18  The wheel
19  Treasury
20  Matrix
21  A reduction in demand for steel which leads to the closure of foundries

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22  Mayo
23  Jessie
24  Shaper
25  Figurehead
 Liaison
26  Yes – because it overstates the assets and profits of FRAC Limited
27  Action-centred leadership
28  Quicker calculations can be performed

 Easier presentation of material in a variety of forms
29  360 degree feedback
30  Confidentiality
 Integrity
31  Organisations owned by private owners are always known as limited companies

 A non-governmental organisation is a business owned by the workers and customers
who share the profits
32  It costs less money to run because fewer managers are required
33  Threat of substitutes
 Threat of new entrants
34  Taxation
Fiscal policy is government policy on public borrowing and public spending and taxation.
Therefore, taxation is not an element of monetary policy.

lOMoARcPSD|11199247
35
Positive Negative Surplus Deficit
Public Sector Borrowing Requirement    
(positive/negative)
Budget (surplus/deficit)    
36  Increase the average number of middle management jobs

This is not correct, these jobs will be reduced.
37
10% 15% Judgement
Listed companies   
Other companies   
38  Executive directors (they are internal stakeholders)
39  Primary law
40  Audit
41  Data controller
42
Internal External
appraisal appraisal
Strengths  
Threats  
Opportunities  
Weaknesses  
43  People
 Processes
44  Proactive

lOMoARcPSD|11199247
45  False
46  ‘Value for money’ audit

lOMoARcPSD|11199247
Section B
QUESTION ONE
Task 1
A III; B IV; C II; D I
Task 2
Tall Flat
Decisions take a long time to be implemented throughout the  
organisations
Limited opportunities for promotion  
Managers have wide span of control  
Expensive to operate  
QUESTION TWO
Task 1
 Advocacy
 Self-review
 Familiarity
 Intimidation
Task 2
 Norms and standards of behaviour that the board believes will help the business achieve
its objectives.
QUESTION THREE
Task 1
(1) C Marginal utility
(2) F Price
Task 2
Shift right Shift left No movement

A television series showcasing the pleasures of   
rail travel
An increase in air fares due to a government   
levy on air travel
An inflation-linked increase in rail fares   
A strengthening of the exchange rate, meaning   
that more people take holidays abroad

lOMoARcPSD|11199247
QUESTION FOUR
Task 1
 Giving the task of preparing monthly accounting information to someone else, so that
Kate can get on with doing the work that she does most efficiently
Task 2
A III; B II; C I
QUESTION FIVE
Task 1
 An income statement
 A statement of financial position
 An auditors’ report
 A directors’ report
Task 2
A III; B I; C IV; D II
QUESTION SIX
Task 1
A II; B III; C IV; D I
Task 2
Leadership Management
Concern with staff development  
Concentration on longer-term objectives  
Concern with methods and timescale  
Challenging accepted methods of doing things  

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ACCA F1 BT Exam Kit

ACCA F1 Practice and Revision Kit by BPP (Association of Chartered Certified

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How to use this Question Bank

1 QUESTION PRACTICE IS KEY TO SUCCESS

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Practice exam questions

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 1

Chapter 1: Organisations, stakeholders and the business

Objective test questions

3 A private sector organisation is owned by:

4 Who is a ‘connected stakeholder’?

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2 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk

7 How is the term ‘synergy’ best described?

8 According to Mendelow’s Matrix, stakeholders in which segment should be kept satisfied?

9 Which TWO of the following are NOT internal stakeholders of an organisation?

10 According to Mendelow, which group of stakeholders must companies keep satisfied?

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 3

13 Identify which TWO of the following statements are true.

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4 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk

Regulated personal information should be kept longer than necessary 

20 Which of the following is NOT an advantage of outsourcing?

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 5

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6 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk

Multi task questions

Unlawful Not unlawful

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 7

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8 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk

Employees Suppliers Shareholders Fans

Needs support Voluntary

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A C C A BT Q ue s t ion Ba nk 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t 9

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10 1: O rg an i s at i o n s, s t ake h ol d e rs an d t h e b u s in e s s e n v iro n me n t A C C A BT Q ue s t ion Ba nk

Characteristic Not characteristic

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A C C A BT Q ue s t ion Ba nk 2: T h e mac ro - e c o no mi c e n v i ro n men t 11

Chapter 2: The macro-economic environment

Objective test questions

2 In which of the following situations does a ‘deflationary gap’ arise?

4 Which of the following taxes is an example of an indirect tax?

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12 2: T h e mac ro - e c o no mi c e n v i ro n men t A C C A BT Q ue s t ion Ba nk