Kaplan kit pointers
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Integrity means that accountants must not be associated with any false or
misleading statements.
Professions also require the mastering of specialist skills, governance by a
professional organisation and a process of certification of new members.
Empowerment is getting employees involved in making their own decisions
Deontological ethics is linked to the concept of absolutism ñ things are inherently
wrong or right, regardless of the consequences.
Note that NEDs should not have worked for the company as an employee for the
last five years
or serve as a NED for more than 9 years with the same company.
It is worth noting that non‐independent NEDs can be chosen by the company as
long as there is a majority of independent NEDs on the board and appropriate
disclosures are made.
purpose of codes of practice on corporate governance is To provide guidance on
the standards of best practice that companies should adopt
By publication of the Annual Report and Accounts is The most obvious means of
achieving public oversight of corporate governance
duties of the committee secretary;
1. Making administrative arrangements
2. Dealing with correspondence
3. Issuing the agenda
4. preparing the location;
5. assisting the chair;
6. acting on and communicating decisions.
7. Fixing date, time and location/Making notes/Issuing
documents/Preparing minutes
role of a Committee Chairman is Ensuring correct procedures are followed
The remuneration committee is usually focused on Directorís remuneration
package
LAW AND REGULATION GOVERNING ACCOUNTING
 When submitting annual financial statements to be available for inspection by third
parties, a company should send them to:Companies house
 the preparation and filing of accounts by companies each year is normally required by
National legislation
 National legislation places a requirement on companies in respect of mandatory reports
to government and shareholders (and usually both). This is to ensure that limited
companies adhere to certain minimum standards. In many countries an underlying
purpose of this is to protect prospective and existing investors in the company, and to
minimise the possibility of tax evasion. Codes of corporate governance are now used
extensively in countriesthat adopt a principles‐ based approach to corporate governance.
Such codes are not underpinned by legislation and are voluntary in nature. Companies and
other organisations are expected to comply with the provisions of the codes, or to explain
to shareholders why they are not doing so. International Accounting Standards seek to
achieve consistency in reporting across international frontiers. They affect the content
and presentation of the company accounts, but it is up to governments and their agents to
decide on the requirements for preparation and filing of accounts
ACCOUNTING AND FINANCE FUNCTIONS WITHIN BUSINESS
1. The treasurer would also be responsible for debt strategy, currency management,
banking forecasting and risk management.
2. managing the total level of working capital
3. There is no legal requirement for companies to have a management accounting
function.
4. Small companies do not have to be audited. As the company is owner‐managed
the agency problem will not be relevant.
5. The books of prime entry include sales, payables ledger, cash and petty cash
books and appropriate journals
6. This is tax evasion as the company is illegally reducing its tax liability. Note that it
cannot be both evasion AND avoidance simultaneously.
7. Tax avoidance is used to describe schemes which, whilst they are legal, are
designed to defeat the intentions of the law makers.
8. A is incorrect as VDF will never have to pay dividends if it cannot afford them.
Equity finance is not secured on the companyís assets, so C is incorrect. D is also
incorrect as dividends are not tax allowable, meaning that the issue of shares is
unlikely to directly affect VDFís tax liability
9. Cost schedules are often also referred to as standard cost cards
10. integrated reports will provide users with additional information on anything the
organisation feels they would be interested in, such as the companyís
environmental impact or sustainability in the period.
11. purposes of budgets;
A responsibility for expenditure
B motivation of employees
C co‐ordination of staff
12. 'Capitals' used in integrated reporting are The six capitals are financial,
manufactured, intellectual, human, social and relationship, and natural capital
Intellectual capital
Natural capital
Human capital
FINANCIAL SYSTEMS AND PROCEDURES
1. She is concerned that when her business pays its suppliers, the wrong amount
may be paid; Regular purchase ledger reconciliations
2. customers who have been sent the wrong style or colour of furniture; Agree
goods despatched note (GDN) to original order
3. purpose of organisational control systems
Safeguarding of company assets
Prevention of errors
Increased efficiency
prevention of fraud
4. BACS is an automated bank transfer when the money is sent directly to an
employeeís bank account, which makes the transaction easy to trace and more
secure
5. When petty cash is replenished, it is usual for the amount of cash to drawn to
equal the value of the receipts and vouchers produced since the previous
replenishment.
LEADERSHIP, MANAGEMENT AND SUPERVISION
approach to managing change
1. Education and communication
2. B Facilitation and support
3. C Manipulation and co‐optation
4. D Negotiation and agreement
The focus of Taylorís model is that staff members should be scientifically chosen to ensure they
are suitable for the job they are being hired to do. Once hired, management are responsible for
all key decisions and providing instructions to workers. While co‐operation between workers
and managers should be close, scientific management does not suggest employee suggestion
schemes
Contingency theorists do not ignore the lessons learnt from earlier theorists ñ they adapt them
job evaluation considers the worth of the job to the company and therefore how much the
jobholder is to be paid
Recruitment consultants are usually involved in the early stages of the recruitment and
selection process, e.g. advising on job descriptions, designing job advertisements, screening
applications and assisting with short‐listing of candidates for interview. They frequently conduct
the first round of interviews.
Assessment centres involve candidates being observed and evaluated by trained assessors as
they are given a selection of pre‐programmed exercises or trials. (2) Psychometric tests examine
psychological factors,such asintelligence and personality.
work between the hours of 3pm and 6pmThis is an example of indirect discrimination as it may
disadvantage certain groups ñ such as those who have children
Positive discrimination is typically illegal.
Peters and Waterman argued that teams should have a limited duration, existing only to
achieve a given task and that communication should be unstructured and informal. In addition,
they argued that successful teams need to be action‐ oriented
Like the completer‐finisher, the implementer (or company worker) is disciplined and reliable
but is typified by being prepared to take concepts and ideas and then put them into practical
effect. The monitor‐evaluator considers all alternatives and often displays good judgement, but
may lack personal drive. The shaper is good under pressure and challenges the team to achieve
its goals.
The plant role is played by a creative individual; the monitor‐evaluator is good at making
accurate judgements, whereasthe team worker looks after the atmosphere within the team
the involvement of more people in the decision making process means that teams have better
control ñ there are a number of people to review the decisions being made
Role signs are visible indications of a role, such as styles of dress
Role conflict refers to the situation when there is a clash between the roles, such as the role of
the employee and role of good auditor.
MOTIVATING PEOPLE
Content theories focus on what motivates people; they consider that we are all driven by the same set
of desires. Process theories encourage a manager to communicate with staff to establish what rewards
are of value to them and whether the targets set are achievable and realistic.
Discharge could be as a result of an employeeís unsuitability, disciplinary action or redundancy.
Unavoidable may be because of marriage, moving house, illness or death. Avoidable is often due to pay,
working conditions or relationships with work colleagues.
Counselling is about helping people to help themselves; it helps people to address their worries and
anxieties created by relationships, uncertainty or problems within the individual
him/herself. Counselling is also non‐directive; the individual is to decide him/herself what is to be
achieved and the best ways to do so.
Competency frameworks look at skills, knowledge and attitudes needed ñ not necessarily qualifications
competency frameworks can be used to identify training needs within the organisation B Competency
frameworks should be regularly updated for employees
Communication
The wheel was shown to be the quickest way to reach a conclusion
Barriers to communication also include anything that stops information from being understood by its
recipients or being acted upon in the way intended. Barriers to communication can be caused by many
things, e.g. ënoiseí (message confused by extraneous matters); difference in education levels; overload
(too much information); distortion of information by the receiver; use of technical or professional
language
BUSINESS ORGANISATION, STRUCTURE, FUNCTIONS AND GOVERNANCE
ëThe nomination committee is responsible for ensuring that there is an appropriate mix of skills and
experience on the board, as well as making sure there are sufficient non‐executive directors.í
(ii) ëWholly staffed by non‐executive directors, the audit committee reviews systems of internal control
as well as reviewing the accounting policies of the company.í
ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE
transaction processing system summarises all the information on sales for the day and produces a
report.í
International Accounting Standards Board (IASB); Development and publication of IFRSs and
interpretations
IFRS Interpretations Committee (IFRS IC);Reviews widespread accounting issues and provides guidance
IFRS Advisory Councils (IFRS AC) Comprised of a wide range of members affected by the work of the
other two bodies.
IFRS Foundation;Acts assupervisory body for the other three bodies and ensures each is properly funded
Statement of cash flows (SOCF). INCLUDES Total cash spent purchasing non‐current assets
ëRecently, a criminal used stolen cash to buy shares in a company. This is an example of placement.
INFORMATION TECHNOLOGY AND INFORMATION SYSTEMS IN BUSINESS
Spreadsheets tend to be used to analyse data, such as lists of numbers rather than for long‐ term
storage (which would be a function of a database application).
Phishing an attempt by criminals to try to obtain sensitive information by presenting themselves as a
trusty source
ECONOMIC FACTORS
If the customers spend a high proportion of their income on Eís product, any rise in the selling price
could make it unaffordable, leading to a significant fall in demand. This would therefore indicate HIGH
elasticity of demand.
the effect of expectations on a countryís economy?
If people collectively expect the economy to develop in a certain way, they will act in a manner that will
facilitate this change
Remember that Keynesí approach is also referred to as ëdemand‐sideí economics as it involves the
Government stepping in to manipulate the level of demand in the economy as needed.
Expenditure reducing strategies involve the government shrinking the domestic economy to reduce the
demand for imports. A budget surplus would accomplish this. Expenditure‐switching strategies
encourage consumers to switch to domestically produced goods. The other three options are examples
of these.
the countryís governmentshould ëfocus more on reducing the power of trade unions and the number of
state‐owned monopolies and less on worrying about running a budget surplus.íMonetarist