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Flashcards in 4. Finance function Deck (25)
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1

Five key activities of the finance function

Accounting operations
Analysis
Planning
Decision making
Control

2

Sound stewardship

The recording of financial transactions

3

Record keeping and stewardship

preparation of financial statements in accordance with legal rules and accounting standards

4

Components of the finance function

Financial accounting
Management accounting
Treasury management
Internal audit

5

Financial accounting

production of financial statements in accordance with IFRS and legislation

6

External reports

Statement of Profit or Loss
Statement of financial position
Statement of cash flow

7

Investor ratios

Earnings per share
Price/ earnings P/E ratio
Dividend yeild

8

Earnings per share

profit after tax (less preference shares)
/
weighted average number of ordinary shares in issue

9

Price/ earnings ratio

Share price
/
EPS

10

Dividend yield

Dividend per share
/
Current share price
x 100

11

Integrated reporting

combines reporting on environmental and social issues within the financial reports

12

Common management accounts reports

Cost schedules
budgets
variance reports

13

Cost schedules

show the expenses involved in manufacturing units - can be called a cost card

14

Responsibility of budgets and budgetary control

management accountant

15

Budgets

CRUMPET

Coordination
Responsibility
Utilisation
Motivation
Planning
Evaluation
Telling

16

Variance reports

shows actual vs budget

17

Feedforward control

comparing budgeted results against forecast

18

Treasury management

working capital management
cash management
financing
foreign currency
tax

19

Evaluating and obtaining finance

Debt - interest payments are tax deductible

Equity - shares are sold

20

Tax avoidance

the legal use of rules to reduce one's tax liability

21

Tax evasion

to use illegal means to reduce one's tax liability

22

Tax mitigation

to reduce tax liabilities without frustrating the intentions of parliament

23

Internal audit

report on the effectiveness of internal controls

report via the audit committee to the board of directors

24

Prerequisites of fraud

Dishonesty
Opportunity
Motivation

25

Company secretarial

Duties determined by the board
normally in relation to stat accounts, annual returns, companies house