Section A

Leading and managing people

15.2 Which of the following writers is NOT a member of the school of management thought to which
the others belong?

{ FW Taylor

{ Elton Mayo

{ Abraham Maslow

{ Frederick Herzberg (2 Marks)

Ans.FW Taylor

15.6 Which of the following is NOT a technique of scientific management or Taylorism?

{ Micro-design of jobs

{ Work study techniques to establish efficient methods

{ Multi-skilled teamworking - Ans

{ Financial incentives (2 Marks

15.9 Of Mintzberg's nine managerial roles, which is being exercised by a manager who gathers
information from contacts within and outside the organisation?

{ Leader

{ Monitor -Ans

{ Spokesperson

{ Disseminator (2 Marks)

15.13 Which of the following is an 'interpersonal' role of management, in Mintzberg's classification

of nine managerial roles?

{ Spokesperson

{ Figurehead - Ans

{ Negotiator
{ Resource allocator (2 Marks)

Recruitment and selection

16.2 A recruitment manager has prepared a statement of the key duties, tasks and reporting
responsibilities involved in a particular job, as the basis for job interviewing. What name would be
given to such a statement?

{ Job analysis

{ Job description - Ans

{ Job advertisement

{ Personnel specification (2 marks)

16.6 In a selection interview, the interviewer asks: 'Surely you'd agree that objectivity is a key
requirement for an auditor?' What sort of question is this?

{ Open

{ Closed

{ Problem-solving

{ Leading - Ans (2 marks)

16.12 All of the following, except one, are areas of human resource management that benefit from
job descriptions. Which is the exception?

{ Job evaluation

{ Training needs analysis

{ Recruitment

{ Employee flexibility – Ans (2 marks)

16.18 The first stage in the recruitment process is:

{ To write a job description

{ To write a person specification

{ To identify a vacancy - Ans

{ To liaise with recruitment consultants (2 marks)

Diversity and equal opportunities

17.5 Which of the following is a potential business benefit of a corporate diversity policy?

{ Compliance with equal opportunities legislation

{ Respect for individuals

{ Better understanding of target market segments- Ans

{ Efficiency in managing human resources (2 marks)

17.2 Which of the following correctly describes the purpose of current Equal Pay legislation?

{ To ensure that there is no element of sexual or racial discrimination in determining pay rates

{ To provide that job evaluation must be used in determining pay rates

{ To provide that women have the right to equal pay to work of equal value to that of men- Ans

{ To ensure that women have the right to equal pay to men in the same job (2 marks)

17.8 A job interviewer asks a woman about her plans to have a family. She eventually does not get
the job, because she lacks qualifications which are listed as essential in the person specification.
However, she later finds out that men who attended interviews were not asked questions about
their plans to have a family. Which of the following statements correctly describes the situation?

{ The woman would have a successful claim of direct sexual discrimination

{ The woman would have a successful claim of indirect sexual discrimination

{ The organisation has laid itself open to a claim of indirect sexual discrimination, but such a claim
would not be successful - Ans

{ The organisation has not laid itself open to any claim of discrimination (2 marks)

Individuals, groups and teams

18.5 For which of the following applications is teamworking NOT best suited?

{ Ideas generation for innovation

{ Co-ordination of different functions

{ Crisis decision-making - Ans

{ Co-ordination of geographically dispersed workers (2 marks)

18.10 In Belbin's model of team roles, which of the following is most important for a well-functioning
team?

{ A mix and balance of team roles - Ans

{ Nine members, so that all roles are filled

{ A focus on functional/task roles, not process roles

{ As few members as possible (2 marks)

18.15 Team-member Tom is one of those people who is dynamic and thrives on pressure. He tends
to be the one who challenges and pushes other team members, sometimes annoying or upsetting
them – but also getting the team past difficult periods. Which of Belbin's team roles does Tom
exercise?

{ Plant

{ Co-ordinator (chair)

{ Implementer

{ Shaper - Ans (2 marks)

18.17 Team-leader Arnica has given a briefing stating the current situation and asking for
suggestions to move the project on. What stage is the team current at?

{ Forming

{ Storming

{ Norming

{ Performing – Ans (2 marks)

Motivating individuals and groups

19.2 Which of the following is NOT a category in Maslow's hierarchy of needs theory?

{ Physiological needs

{ Freedom of inquiry and expression needs

{ Need for affiliation - Ans

{ Safety needs (2 marks)

19.6 All of the following, except one, are alternative terms for the same thing. Which is the
exception?

{ Motivator factor - Ans

{ Hygiene factor

{ Environmental factor

{ Maintenance factor (2 marks)

19.8 Participation can motivate employees by making them take 'ownership' of the task and
increasing their commitment. In which of the following circumstances, however, would this NOT
happen?

{ Participation is genuine

{ The purpose of participation is made clear

{ Everyone is allowed to participate equally - Ans

{ Efforts at participation are maintained for a reasonable period (2 marks)

19.10 Application of process theories to motivation in practice involves all but one of the following
measures. Which is the exception?

{ Clarifying intended results

{ Giving feedback on actual results

{ Immediacy of reward following results- Ans

{ Consistency of reward for results (2 marks)

19.17 Which job design technique was advocated by the scientific management school?

{ Empowerment

{ Micro-division of labour- Ans

{ Division of labour

{ Job enlargement (2 marks)

Training and development
20.2 Which of the following is NOT a characteristic of a 'learning organisation'?

{ The generation and transfer of knowledge

{ Support for learning and development by all members

{ A scientific approach to problem-solving, in order to minimise risk and error - Ans

{ Willingness to continuously transform itself in response to a changing environment (2 marks)

20.5 The learning cycle developed by David Kolb is a process for ........................................ learning.
Which of the following words correctly completes this sentence?

{ Programmed

{ Experiential - Ans

{ Action

{ Reflection (2 marks)

20.9 The effectiveness of a training scheme may be measured at different levels. Which of the
following levels would be most appropriate for a team leader seeking to evaluate a training
programme designed to improve the productivity of her section?

{ Level 1: trainee reactions

{ Level 2: trainee learning

{ Level 3: job behaviour- Ans

{ Level 5: ultimate value (2 marks)

20.14 Which of the following documents would be part of a formal training needs analysis exercise?
{ An email reminding you that a new piece of legislation is about to come into effect

{ A health and safety officer's report showing that a department failed its assessment in a recent fire
evacuation drill

{ A set of competence standards for your job or department - Ans

{ Feedback from a colleague about the standard of your work (2 marks)

Performance appraisal
21.2 A manager is assessing the performance of her team members. In accordance with the
appraisal system of the organisation, she has been given a list of characteristics and performance
elements, with notes on how to interpret and apply the terms: 'integrity', 'punctuality' and so on.
She is required to comment on how each appraisee measures up in terms of each factor. Which
appraisal technique is this organisation using?

{ Overall assessment

{ Grading

{ Behavioural incident

{ Guided assessment - Ans (2 marks)

21.3 All of the following, except one, are sound principles for devising performance measures. Which
is the exception?

{ They should be related to actual key tasks of the job

{ They should be easily achievable - Ans

{ They should be within the control of the individual

{ They should be observable or measurable (2 marks)

21.9 Appraisal is a complex human relations and political exercise. Which of the following is NOT
necessarily a helpful factor in the design of an appraisal scheme?

{ The purpose of the system is positive and clearly expressed

{ There is reasonable standardisation throughout the organisation

{ Time is allowed for appraisee preparation and appraiser training

{ There is an implied link between assessment and reward - Ans (2 marks)

21.13 A sales team is assessed according to the number of sales calls made, number of leads
generated, and number and value of sales made. Which appraisal technique is described in this
example?

{ Behavioural incident

{ Rating scale

{ Guided assessment
{ Results-oriented -Ans (2 marks)

Business organisations and their stakeholders

1.8 ADB is a business which is owned by its workers. The workers share the profits and they each
have a vote on how the business is run. Which of the following should be used to describe ADB?

{ Public sector

{ Private sector

{ Not-for-profit

{ Co-operative - Ans (2 marks)

1.3 Which of the following statements is true?

{ Limited company status means that a company is only allowed to trade up to a predetermined
turnover level in any one year.

{ For organisations that have limited company status, ownership and control are legally separate.-
Ans

{ The benefit of being a sole trader is that you have no personal liability for the debts of your
business.

{ Ordinary partnerships offer the same benefits as limited companies but are usually formed by
professionals such as doctors and solicitors. (2 marks)

The business environment

2.6 In the context of 'best practice' employment protection law, in which of the following
circumstances is dismissal of an employee automatically considered unfair?

{ Selection for redundancy on the basis of age - Ans

{ Misconduct

{ Marriage to an employee of a key competitor

{ Incompetence (2 marks)

2.10 Which of the following is a support activity in Porter's value chain model?

{ Procurement- Ans

{ Operations

{ Marketing and sales

{ Inbound logistics (2 marks)

2.13 What is the latest stage at which a new recruit to a company should first be issued with a copy
of the company's health and safety policy statement?

{ When a position with the company is offered

{ As early as possible after employment- Ans

{ After the first few weeks of employment

{ During the final selection interview (2 marks)

2.15 Three of the following strategies are closely related. Which is the exception?

{ Downsizing

{ Delegating - Ans

{ Delayering

{ Outsourcing (2 marks)

The macro-economic environment

3.5 The currency in country X is the Krone while country Y uses the Euro. Country Y has recently
experienced an increase in its exchange rate with Country X. Which of the following effects would
result in Country Y?

{ A stimulus to exports in Country Y

{ An increase in the costs of imports from Country X

{ Reducing demand for imports from Country X

{ A reduction in the rate of cost push inflation- Ans (2 marks)

3.8 Which TWO of the following does government economic monetary policy relate to?

Interest rates -Ans

Taxation

Public borrowing and spending

Exchange rates – Ans (2 marks)

3.11 Which of the following is an example of cyclical unemployment?

{ The entry of school leavers into the labour pool each year

{ Lay-offs among agricultural labourers in winter

{ Automation of ticketing services in tourism

{ Recession in the building industry- Ans (2 marks)

Micro-economic factors
4.2 The supply curve of a firm operating in a competitive market is its

{ Marginal cost curve above the average variable cost curve - Ans

{ Marginal cost curve above the average total cost curve

{ Average total cost curve beyond the point where the marginal cost curve cuts it from below

{ Average variable cost curve below the average revenue curve (2 marks)

4.6 Which of the following would NOT lead directly to a shift in the demand curve for overseas
holidays?

{ An advertising campaign by holiday tour operators

{ A fall in the disposable incomes of consumers

{ A rise in the price of domestic holidays

{ A rise in the price of overseas holidays -Ans (2 marks)

4.11 The demand for fashion goods is NOT influenced by:

{ Price

{ Allocative inefficiency among producers- Ans

{ The distribution of income among households

{ Expectation of future price changes (2 marks)

4.14 Consider the price and demand for flower vases. The price of cut flowers goes up sharply.
Which of the following should happen?

{ The demand curve for flower vases will shift to the left and their price will rise
{ The demand curve for flower vases will shift to the right and their price will rise

{ There will be a movement along the demand curve for flower vases and their price will go down

{ The demand curve for flower vases will shift to the left and their price will go down-Ans (2 marks)

4.17 ABC produces a variety of soft drink. It has two competitors but all three producers use product
differentiation to distinguish themselves from each other. What type of market is this?

{ Perfect competition

{ Monopoly

{ Monopolistic competition

{ Oligopoly -Ans (2 marks)

4.22 Consumer surplus is:

{ The excess between what consumers are prepared to pay for a good or service, and the prevailing
market price - Ans

{ The indirect tax producers pay on a good or service

{ The marginal utility gained by consuming one more unit of a good or service

{ The indirect tax consumers pay on a good or service (2 marks)

Business organisation, structure and strategy

6.5 Which of the following principles of classical management is challenged by matrix management?

{ Structuring the organisation on functional lines

{ Structuring the organisation on geographical lines

{ Unity of command - Ans

{ Decentralisation of decision-making (2 marks)

6.9 What is an organisation which has removed the internal barriers which separate hierarchy levels
and functions and also between the organisation and its suppliers, customers and competitors
known as?
{ Modular organisation

{ Hollow organisation

{ Jobless structure

{ Boundaryless organisation-Ans (2 marks)

Organisational culture and committees

7.4 Which of the following is NOT one of the terms used by Hofstede to describe a key dimension of
culture?

{ Power-distance

{ Acquisitive/giving - Ans

{ Individualism/collectivism

{ Uncertainty avoidance (2 marks)

7.7 Research has indicated that workers in country A display characteristics such as toughness and
the desire for material wealth and possessions, while workers in country B value personal
relationships, belonging and the quality of life. According to Hofstede's theory, these distinctions
relate to which of the following cultural dimensions?

{ Masculinity – femininity - Ans

{ Power – distance

{ Individualism – collectivism

{ Uncertainty avoidance (2 marks)

7.13 Josh, Joanne, Ed, and Sue all work for D Co. Josh works in the finance department. Joanne
works in the human resources department. Ed is Sue's line manager in the purchasing department.
Which of the staff members would be involved with payroll administration?

{ Josh - Ans

{ Joanne

{ Ed

{ Sue (2 marks)
7.15 Diane carries out routine processing of invoices in the purchasing department of L Co. Joanne is
Diane's supervisor. Lesley is trying to decide how many staff will be needed if some proposed new
technology is implemented. Tracey is considering the new work that L Co will be able to offer and
the new markets it could enter, once the new technology is well established. Which member of L Co
carries out tactical activities?

{ Diane

{ Joanne

{ Lesley - Ans

{ Tracey (2 marks)

7.18 Janet works for a toy company called K Co. She telephones Mary at P Co on a daily basis to
order parts. Janet has no contact with customers but does deal with complaint letters from D Group,
an organisation against slave labour. D Group believe that K Co use slave labour in the toy
manufacturing factories. Which of the following are internal stakeholders of K Co?

{ Janet only - Ans

{ Janet and Mary at P Co

{ Janet and D Group

{ Janet, Mary and D Group (2 marks)

7.22 The audit committee and remuneration committee of a company are examples of which of the
following?

{ Ad hoc committees

{ Management committees

{ Executive committees

{ Standing committees -Ans (2 marks)

Corporate governance and social responsibility

8.3 Michael has been asked to prepare a presentation for the company directors on good corporate
governance. Which of the following is NOT appropriate for him to include in his presentation?

{ Risk management

{ Internal controls

{ Maximising shareholder wealth- Ans

{ Accountability to stakeholders (2 marks)

8.6 The tasks of which body include: monitoring the chief executive officer; formulating strategy; and
ensuring that there is effective communication of the strategic plan?

{ The audit committee

{ The Public Oversight Board

{ The board of directors- Ans

{ The nomination committee (2 marks)

8.9 In most countries, what is the usual purpose of codes of practice on corporate governance?

{ To establish legally binding requirements to which all companies must adhere

{ To set down detailed rules to regulate the ways in which companies must operate

{ To provide guidance on the standards of the best practice that companies should adopt-Ans

{ To provide a comprehensive framework for management and administration (2 marks)

8.12 Which of the following are advantages of having non-executive directors on the company
board? 1 They can provide a wider perspective than executive directors. 2 They provide reassurance
to shareholders. 3 They may have external experience and knowledge which executive directors do
not possess. 4 They have more time to devote to the role.

{ 1 and 3

{ 1, 2 and 3 - Ans

{ 1, 3 and 4

{ 2 and 4 (2 marks)

The role of accounting

10.2 Which of the following statements about accounting information is NOT correct?

{ Some companies voluntarily provide specially-prepared financial information to employees.

{ Accounting information should be relevant, reliable, complete, objective and timely.

{ Accountants have a strong obligation to ensure that company accounts conform to accounting
standards
{ Charities and professional bodies do not have to produce financial statements in the same way as
businesses. -Ans (2 marks)

10.5 Which of the following is an aim of the control system relating to accounts payable and
purchases?

{ To ensure that all credit notes received are recorded in the general and payables ledger-Ans

{ To ensure that goods and services are only supplied to customers with good credit ratings

{ To ensure that all credit notes that have been issued are recorded in the general and receivables
ledgers

{ To ensure that potentially doubtful debts are identified (2 marks)

10.7 All of the following, with one exception, are areas in which an integrated accounting software
package has advantages compared to a series of separate (stand-alone) dedicated programs. Which
is the exception?

{ Efficiency in updating data

{ Flexibility in preparing reports

{ Data integrity

{ Specialised capabilities - Ans (2 marks)

10.10 All of the following, except one, are tasks that can be performed by spreadsheet software.
Which is the exception?

{ The presentation of numerical data in the form of graphs and charts

{ The application of logical tests to data

{ The application of 'What if?' scenarios

{ Automatic correction of all data entered by the operator into the spreadsheet -Ans (2 marks)

10.13 Gordon works in the accounts department of a retail business. He and his colleagues are
looking at the sales figures for various types of clothing. The director asks them to use exception
reporting to summarise their findings. Which of the following correctly defines the concept of
'exception reporting' within a business context?

{ The reporting of unusual events, outside the normal course of events

{ The analysis of those items where performance differs significantly from standard or budget-Ans
{ The preparation of reports on routine matters on an 'ad hoc' basis

{ The scrutiny of all data as a matter of course, save in exceptional circumstances (2 marks)

10.15 ........................................ Systems pool data from internal and external sources and make
information available to senior managers, for strategic, unstructured decision-making. Which word
or phrase correctly completes this sentence?

Expert

Decision Support

Executive Support -Ans

Management Support (2 marks)

10.18 Which of the following statements about data security is NOT true?

{ Loss or corruption of data is almost always non-deliberate.- Ans

{ New staff in particular pose a threat.

{ It is impossible to prevent all threats cost-effectively.

{ Smoke detectors are a form of data protection. (2 marks)

10.23 Which function in an organisation is responsible for ensuring that only properly authorised
purchases which are necessary for the business are made?

{ Goods inwards

{ Finance/accounts

{ Purchasing/procurement - Ans

{ Production/operations (2 marks)

10.27 Legally binding rules relating to the disclosure and presentation of financial statements are set
down in which of the following?

{ National legislation- Ans

{ International financial reporting standards

{ Generally agreed accounting principles

{ Rule books of professional accountancy bodies (2 marks)

Control, security and audit
11.1 Which of the following is NOT an aim of internal controls?

{ To enable the organisation to respond appropriately to business, operational and financial risks

{ To eliminate the possibility of impacts from poor judgement and human error- Ans

{ To help ensure the quality of internal and external reporting

{ To help ensure compliance with applicable laws and regulations (2 marks)

11.4 Which of the following is NOT an internal check?

{ Separation of duties for authorising, custody and recording

{ Pre-lists, post-lists and control totals

{ Bank reconciliations

{ Systems for authorising transactions within specified spending limits -Ans (2 marks)

11.8 All of the following, except one, are inherent limitations of internal control systems. Which is
the exception?

{ The costs of control

{ Potential for human error and deliberate override

{ The types of transactions controls are designed to cope with

{ The independence of controls from the method of data processing -Ans (2 marks)

11.10 In the context of audit, what are 'substantive tests' designed to accomplish?

{ To establish whether internal controls are being applied as prescribed

{ To identify errors and omissions in financial records - Ans

{ To establish the causes of errors or omissions in financial records

{ To establish an audit trail (2 marks)

11.14 Which of the following circumstances would cast doubt on the external auditor's ability to rely
on the work of internal auditors?

{ There is evidence that management and directors consistently act on internal audit
recommendations

{ The internal audit function has a direct line of communication to the audit committee

{ No audit manuals or working papers are available for inspection- Ans

{ Internal auditors are recruited on technical qualifications and demonstrated proficiency (2 marks)

Identifying and preventing fraud

12.3 X plc has a bad debt policy whereby aged receivables who are obviously not going to pay, are
written off. The financial accountant does not enforce this policy. This might be fraudulent insofar as
it creates which of the following effects?

{ It removes funds from the business

{ It results in the understatement of profits and net assets

{ It results in the overstatement of profits and net assets- Ans

{ It results in the intentional overstatement of profits and net assets (2 marks)

12.5 All of the following, with one exception, are internal factors which might increase the risk
profile of a business. Which is the exception?

{ Increased competition- Ans

{ Corporate restructuring

{ Upgraded management information system

{ New personnel (2 marks)

12.7 All of the following, except one, are potential impacts on a business of removal of significant
funds or assets. Which is the exception?

{ Fall in returns to shareholders

{ Reduction in profits
{ Increase in working capital- Ans

{ Reputational damage (2 marks)

12.10 Which of the following is NOT a key risk area for computer fraud?

{ Hackers

{ Lack of managerial understanding

{ Inability to secure access to data - Ans

{ Integration of data systems (2 marks)

12.13 Only allowing purchasing staff to choose suppliers from an approved list is an example of what
sort of fraud prevention measure?

{ Segregation of duties

{ Appropriate documentation

{ Limitation control -Ans

{ Check control (2 marks)

12.15 . . . . . . . . . . . . . . . . . . . . . . . constitutes any financial transactions whose purpose is to conceal

the origins of the proceeds of criminal activity. Which word(s) completes the sentence?

Fraud

Money laundering- Ans

Teeming and lading

Misrepresentation of results (2 marks)

Financial technology (Fintech)

13.3 Which of the following accounting tasks could data analytics help to make more effective?

{ Processing routine transactions

{ Asset management

{ Risk management - Ans

{ Payroll processing (2 marks)

13.6 Which of the following technologies allows unconnected organisations and individuals people
to trust a shared record of events?
{ Cloud computing

{ Data analytics

{ Distributed ledger- Ans

{ Artifical intelligence (2 marks)

13.8 Which of the following is an area of an accountant or auditor's work that is made more effective
by artificial intelligence?

{ Report writing

{ Forming an audit opinion

{ Downloading bank transactions into the accounting system

{ Posting transactions to nominal codes- Ans (2 marks)

13.2 Which characteristic of big data relates to the ability to stream data in real-time?

{ Veracity

{ Volume

{ Variety

{ Velocity -Ans (2 marks)

Section B
(1) Professional accountants have to abide by a number of ethical principles.

The following sentences contain gaps relating to one of the above ethical principles.

Zeinab is a qualified accountant. She hasrecently faced an ethical threat ofself‐review. If she does
nothing to deal with this, she will have breached her requirement to act with _1_.

(i) Select the ethical principle that appropriately fills gap 1 above.
integrity/objectivity/confidentiality/professional competence*

*delete as appropriate  

Eden has recently been undertaking an audit on KJH Co and has discovered that the company is
paying its employees lower than the legal minimum wage. Reporting this information is not a breach
of _2_ as there is a legal reason to do so.
(ii) Select the ethical principle that appropriately fills gap 2 above.
integrity/objectivity/confidentiality/professional competence*

*delete as appropriate   (2 mark each = 4 marks in total)

Ans. (1) Objectivity

Ans. (2) Confidentiality

(Professional Ethics in Accounting & Business)

43 (a) Which FOUR of the following statements are features of objectives?

A Achievable

B Related

C Acceptable

D Timely

E Specific

F Measurable

G Quantitative

H Straightforward (0.5 marks each, total = 2 marks)

(b) Here are four short definitions of key types of communication:

A) Communication between people at the same level within the organisation.

B) A lack of this means that managers get little feedback from their more junior employees.

C) This refers to communication between different levels and departments

D) A lack of this means that junior employees will be unaware of their manager’s plans and goals

Match EACH of the descriptions above with ONE of the following types of communication (A, B, C or
D).

(i) Downwards communication

(ii) Upwards communication
(iii) Diagonal communication
(iv) Lateral communication (1 marks each, total = 4 marks)
(Total: 6 marks)
(a) A, D, E & G.
(b) (1) D
(2) B
 (3) C
(4) A (Personal Effectiveness & Communication in Business)

38 UHPD is a police force based in a town in country B. It is government funded and has a number of
officers, who operate a wide range of roles – from patrols on foot around the town, highway and
vehicle patrols, forensic analysis and administration.

Morale in the force has been low for several years, leading to a staffing crisis due to the high levels
of staff turnover. Samuel is the head of the UHPD and has decided to investigate ways of motivating
his workforce.

Samuel has investigated two major models to do with motivation – Herzberg’s two‐ factor theory
and McGregor’s Theory X and Theory Y.

The following sentences contain gaps.

Samuel is considering the launch of a new policy that ensures that all members of staff are given an
appropriate level of pay by formalising the grade boundaries of all staff. This will make pay fairer and
will act as a _1_ for workers, hopefully reducing staff turnover.

(i) Select the term that appropriately fills gap 1 above.

hygiene factor/job enrichment/job rotation/motivator*

*delete as appropriate  

Samuel has informed all managers within UHPD that they will be expected to delegate some
responsibility down to more capable junior staff to improve UHPD’s employee job design. Samuel
referred to this in his report as _2_.

(ii) Select the term that appropriately fills gap 2 above.

hygiene factor/job enrichment/job rotation/motivator*

*delete as appropriate  

Samuel has identified four managers within UHPD that have received high levels of complaints
from their staff. They have adopted an authoritarian management style, assuming that
employees are _3_. In fact, thisis not the case and this mismatch in style has caused significant
morale problems.

(iii) Select the term that appropriately fills gap 3 above.

Theory X/Theory Y*

*delete as appropriate

Samuel has decided against _4_ within UHPD as he is concerned that if staff are regularly moved
between departments, their overall efficiency will drop.

(iv) Select the term that appropriately fills gap 4 above.

 hygiene factor/job enrichment/job rotation/motivator*

*delete as appropriate   (1 mark each = 4 marks in total)

(Total: 4 marks)

Ans.(1) Hygiene Factor

(2) Job Enrichment

(3)Theory X

(4)Job Rotation

LEADING AND MANAGING INDIVIDUALS AND TEAMS

26 (a) Here are four short references to possible frauds faced by organisations:

 Receipts from one debtor are taken by the fraudster, who then uses receipts from another debtor
to clear this sales ledger balance

 The fraudster diverts small amounts from a large number of transactions

 A company is asked to pay a small amount up front in order to secure a larger later payment

 A fake investment is created, where high investment returns are paid to early investors out of the
investments made by subsequent investors

Match up EACH of the descriptions above with ONE of the following frauds.  

(i) Ponzi scheme

(ii) Teeming and lading
(iii) Skimming
(iv) Advance fee fraud (1marks each, total = 4 marks)

(b) One serious type of fraud is money laundering.

The following sentences contain gaps relating to key money laundering terms.

‘_1_ involves transferring money between businesses or locations in order to conceal their
original source.’

(i) Select the term that appropriately fills gap 1 above.

layering/tipping off/placement/integration*

*delete as appropriate

‘Recently, a criminal used stolen cash to buy shares in a company. This is an example of _2_.’

(ii) Select the type of organisation that appropriately fills gap 2 above.
 layering/tipping off/placement/integration*
*delete as appropriate (1 mark each = 2 marks in total)

(Total: 6 marks)

Ans. (a) (1) D

(2) A

(3) B

(4) C

Ans(b) Layering

Placement

ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE

19 (a) Y Co has recently prepared its most recent set of financial statements. A newly appointed
finance junior has pointed out a number of issues with the financial statements, which she has
argued indicate that the statements are not true and fair.

Which FOUR of the above statements would make Y’sfinancialstatements no longer true and fair?

A) Inventory was not valued using standard generally accepted practice.

B) The financial statements used terminology that the junior felt would not be understood by
the general public.
C) Information was not sufficiently detailed – liabilities were not split out into their constituent
elements.
D) Y’s receivables balance was slightly misstated, though Y acknowledged it would not affect
the overall view of Y’s performance by users.
E) The layout of Y’s cash flow statement was not in accordance with the relevant accounting
standard.  

F) The financial statements covered 12 months – the previous set of financial statements
covered 15 months.
G) The cash balance was significantly misstated, meaning that it gave a misleading view of the
financial position of the company. (0.5 marks each, total = 2 marks)

(b) Y’s junior accountant has been asked to produce a briefing note to her employers that covers
the roles of the main accountancy standard‐setting organisations, including:  

A) International Accounting Standards Board (IASB)

B) IFRS Interpretations Committee (IFRS IC)

C) IFRS Advisory Councils (IFRS AC)

D) IFRS Foundation

However, the junior accountant is unsure of which roles are undertaken by each of these bodies.
Identify which of the following statements relate to the either the IASB, the IFRS IC, the IFRS AC or
the IFRS Foundation by matching each of them to a letter A, B, C or D.

(i) Reviews widespread accounting issues and provides guidance.

(ii) Comprised of a wide range of members affected by the work of the other two bodies.  
(iii) Development and publication of IFRSs and interpretations.
(iv) Acts assupervisory body for the other three bodies and ensures each is properly funded.
(1 marks each, total = 4 marks)
(Total: 6 marks)

Ans(a) A, C, E & G.

Ans(b) (1) B

(2) C

(3) A

(4) D ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE

12 (a) GYY is a large company that provides banking services, such as savings accounts and loans, to
customers in several countries across Europe through their chain of high‐ street banks.  

The company has a manager for each branch. These managers report to a regional manager, who
looks after a large number of branches. All regional managers report directly to the Board of
Directors.

GYY has a significant internal audit department which isrequired to ensure compliance to the large
number of rules and regulations that the bank has to follow.

The company is currently analysing its structure using Mintzberg’s structural configurations model.

GYY’s Human Resources Director (HRD) has identified a number of groups of staff, as follows:

A Bank tellers (staff who deal with customers in GYY’s high‐street banks)

B Board of Directors

C Internal auditors  

D Regional managers

Classify each of the above groups of staff within Mintzberg’s structural configurations model by
matching each of them (A, B, C and D) to one of the following building blocks.

(i) Technostructure
(ii) Middle line
 (iii) Operating core
(iv) Strategic apex (1 marks each = 4 marks total)

(b) GYY is considering how to structure its organisation to achieve the maximum efficiency
possible. The Board of Directors has identified four possible structural configurations as
identified by Mintzberg’s model.
The following sentences contain gaps which specify a particular type of structure.
GYY could formalise all roles within the organisation, increasing bureaucracy to ensure that
all workers act in a standardised way. Some employees, who are members of a banking
union, have complained that such a shift to a _1_ would lead to significant dissatisfaction
amongst GYY’s workers.
(i) Select the type of structure that appropriately fills gap 1 above.
Simple structure/professional bureaucracy/divisionalised structure/machine
bureaucracy*
*delete as appropriate

GYY’s Board currently makes all strategic decisions for the organisation, with very little control being
devolved down to more junior managers. They are concerned that this _2_ will hinder the
company’s future ability to grow.

(ii) Select the type of structure that appropriately fills gap 2 above.
Simple structure/professional bureaucracy/divisionalised structure/machine
bureaucracy*
*delete as appropriate (1 mark each = 2 marks in total)
(Total: 6 marks)

Ans. (a) (1) C

(2) D

(3)A

(4)B

Ans.(1) Machine Bureaucracy.

(2) Simple strutucture ( BUSINESS ORGANISATION, STRUCTURE, FUNCTIONS AND GOVERNANCE)

4 (a) BVO is a small business, which manufactures and sells a number of products, including product
X (a relatively low‐value item). BVO has recently been considering its pricing policy for this product.

It has estimated that if it raises the current selling price (per unit) of product X from $1 to $1.50,
annual demand will drop from 100,000 units to 90,000 units.

BVO is uncertain of the implications of this for its product, or what might be causing the current level
of price elasticity.
Which FOUR of the following options could reasonably be inferred from the above information?

A The price elasticity of demand (PED) for product X is 5

B Product X is unit elastic

C Product X may be a product that customers buy out of habit

D Product X may have few, if any, substitutes

E The price elasticity of demand (PED) for product X is 0.28

F Product X may see a sharperfall in demand if the price rise lastsfor a long period.

G Product X has a price elasticity of demand (PED) of 0.2

H Product X would be more profitable if the price was cut rather than raised

(0.5 marks each, total = 2 marks)

(b) The following sentences contain gaps which are missing a particular micro‐economic term.

BVO has noted that product Y’s sales have fallen in recent years due to a fall in disposable income of
its major customers. This is evidence that _1_ in the demand curve for the product has occurred.

(i) Select the term, from the following list, that appropriately fills gap 1 above.

a shift/a duopoly/equilibrium/a contraction*

*delete as appropriate

BVO sells product Z in country G. Only one other manufacturer sells a similar product in country G,
meaning that the two companies dominate the market. Currently, production and sales volumes for
these products has reached exactly the same levels, suggesting _2_ in the market for this product.  

(ii) Select the term, from the following list, that appropriately fills gap 2 above.
a shift/a duopoly/equilibrium/a contraction*
*delete as appropriate (1 mark each = 2 marks in total) (Total: 4 marks)

Ans((a) C, D, F & G.

Ans(b) A shift

Equilibrium (THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT)

7 (a) Here are four short references to activities within Porter’s value chain:

A Storing and handling inputs

B Activities after the point of sale

C The way the business is organised

D Purchasing of all inputs, including materials

Identify the description above, which is associated with EACH of the following value chain activities,
by matching them up with A, B, C, D or None.

(i) Inbound logistics

(ii) Procurement
(iii) Service
(iv) Operations
(v) Infrastructure (1 marks each, total = 5 marks)

(b) Which THREE of the following statements, regarding Porter’s generic strategies, are correct?

A Focus involves offering general goods to a small segment of the market at a low price
B Cost leadership involves manufacturing goods more efficiently than rivals
C Businesses may become cost leaders by making their goods a lower quality than their
rivals
D A focus strategy tends to allow businesses to charge a premium price
E Differentiation involves charging a premium for a product due to its actual or perceived
benefits to the customer
F Businesses that are stuck in the middle are trying to sell products at too high a price.
(1 marks each, total = 3 marks) (Total: 8 marks)

Ans.(a) (1) A

(2) D

(3) B

(4) None

(5) C

Ans. B, D and E. (THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT)