BTF Flashcards
1
Q
What are the five rights of procurement?
A
Right quality, quantity, price, place, time
2
Q
Who are upstream supply members?
A
those who provide the materials and production of goods and services
3
Q
Who are downstream supply members?
A
Those involved after the product has been manufactured e.g. marketing and customers
4
Q
Hard approach to human resource management
A
Maximise employee effectiveness and control staff cost
5
Q
Soft approach to HRM
A
Emphasises human element, concerned with employee relations
6
Q
The four Cs model of HRM
A
Commitment, competence, congruence, cost-effectiveness
7
Q
Organisational iceberg: over the waterline (overt)
A
Customers Technology Facilities Organisational design Rules and regulations Surface competencies/skills
8
Q
Organisational iceberg: below the waterline (covert = covered)
A
Attitudes Communication patterns Informal processes Personality Conflict Politics Underlying competencies/skills
9
Q
McGregor’s model: Theory X
A
Individuals dislike work
Individuals lack ambition, dislike responsibility and prefer to be led
System of coercion, control and punishment
Individual desires security
10
Q
McGregor’s model: Theory Y
A
Commitment is driven by rewards
Self-actualisation is important
Self control and direction are important
Y managers are more nurturing
11
Q
Maslow’s hierarchy of needs
A
Self actualisation Status/ego Social Safety/security Basic/physiological
12
Q
Stages of group development
A
Forming
Storming
Norming
Performing
13
Q
Team roles
A
Leader
Shaper - aggressive and challenging, promotes activity
Plant - thoughtful and thought provoking
Evaluator - analytically criticises others’ ideas
Resource investigator - picks up on others’ ideas and adds to them, social
Company worker - general ideas into specifics, practical and efficient, handles scheduling
Team worker - concerned with team relationships
Finished - unpopular, ensuring timetables are met
14
Q
Likert four basic leadership styles
A
Exploitative authoritative
Benevolent authoritative
Consultative
Participative
15
Q
What are the six building blocks?
A
Operating core Middle line Strategic apex Support staff Technostructure Ideology
16
Q
Types of organisational structure
A
Simple structure - strategic apex Machine bureaucracy - technostructure Professional bureaucracy - operating core Divisionalised - Middle line Innovative/adhocracy - operating core
17
Q
Mechanistic businesses or bureaucracies
A
Stable, efficient and suitable for slow changing operating environments
18
Q
Organic businesses
A
Flexible, adaptive and suitable for fast changing or dynamic operating environments
19
Q
Types of strategic external analysis
A
PESTEL
Competitor analysis
Porter’s five forces analysis
20
Q
Types of strategic internal analysis
A
Porter’s value chain
The product life cycle
BCG matrix
Analysis of distinctive competencies
21
Q
PESTEL analysis
A
Political factors Economic factors Social,demographic factors Technological factors Ecological factors Legal factors
22
Q
Porter’s five forces analysis
A
Threat of new entrants Bargaining power of customers Bargaining power of suppliers Threat of substitutes Rivalry among existing competitors
23
Q
9 Ms model reviewed in a resource audit
A
Machinery Make-up Management Management information Markets Materials Men and women Methods Money
24
Q
Porter’s value chain - Primary activities
A
Inbound logistics Operations Outbound logistics Marketing and sales Service
25
Porter’s value chain - Support activities
Procurement
Human Resources
Infrastructure
Technology development
26
The BCG matrix
Stars - build (high market share and high growth)
Cash cows - hold or harvest (high share and low growth)
Question marks - build or invest (low share but high growth)
Dogs - divest or hold (low share and low growth)
27
SAF analysis
Suitability
Acceptability
Feasibility
28
Types of information
Planning
Operational - day to day activities
Tactical - short term issues and opportunities (monthly variance reports)
Strategic - long-term decision making
29
Good information
```
Accurate
Complete
Cost-beneficial
User targeted
Relevant
authoritative
Timely
Easy to use
```
30
Effective information processing
```
Completeness
Accuracy
Timeliness
Inalterability
Verifiability
Accessibility
```
31
Secure information
```
Availability
Confidentiality
Integrity
Authenticity
Non-repudiation
Authorisation
```
32
Data validation - ensuring data is not incomplete or unreasonable
```
Check digits
Control total
Hash totals
Range checks
Limit checks
```
33
Fundamental characteristics of financial statements
Relevance
| Faithful representation
34
Enhancing characteristics of financial statements
Understandability
Comparability
Verifiability
Timeliness
35
Global Reporting Initiative
| Triple bottom line accounting
Social
Environmental
Economic
36
Task force in climate-related financial disclosures
International organisation of central banks and regulatory bodies
```
Recommendations:
Governance
Strategy
Risk management
Metrics and targets
```
37
Balanced scorecard
Customer
Innovation and learning
Internal business process
Financial
38
Effective internal control
```
Control environment
Risk management
Control activities
Information and communication
Monitoring activities
```
39
Debt holders
Debt holders rank higher than equity holders to receive their capital back
Lower risk, lower returns
40
Monetary policy committee
Selects its base rate in order to meet its inflation target set by the chancellor of the exchequer
41
Financial policy committee
Ensure stability by removing systematic risks in the uk financial system
42
Bank/customer fiduciary relationship
Bank is expected to act in good faith in its relationship with the customer
43
Money market - short term
```
Treasury bills
Deposits
Certificates of deposits
Gilts
Bonds
Commercial paper
```
44
Capital market - more long term finance
```
National stock exchange:
Main market and AIM
Banking system
Bond market
Leasing
Debt factoring
International markets
```
45
Preference shares
Entitled to dividends before ordinary shareholders
Carry less risk
Return is fixed
46
Loan stocks and debentures
Fixed interest rate borrowings with set repayment date
Secured on assets
Lenders are protected
47
Trading risk
Physical risk - risk of goods being lost or stolen in transit
Credit risk - payment default by the customer
Trade risk - customer refusing to accept goods in delivery or cancellation of order in transit
Liquidity risk - inability to finance the credit given to customers
48
To continue ICAEW membership, professional accountants must...
Obey rules and regulations
Pay the annual subscription fee
Continuing professional development
49
ICAEW members engaged in public practice must also....
Hold a practising certificate
Implement the code of ethics
Be covered by professional indemnity insurance
50
Reserved areas of accounting practice
Statutory audit
Investment
Insolvency
Probate
51
Consultative Committee of Accounting Bodies (CCAB)
Has 5 members
A member deon each body sits in the CCAB, where they discuss matters that affect the profession as a whole enabling the profession to speak with a unified voice
52
International Federation of Accountants
175 members
Aims is to protect the public interest
Encourages accountants to adhere to the fundamental principles
53
What does the Financial Reporting Council (FRC) conduct division do?
Professional oversight - regulation
Professional discipline
Corporate reporting review - make enquiries into departure from requirements for financial statements
Audit quality review
54
What does the Financial Reporting Council (FRC) codes and standards division do?
Actuarial policy
Audit and assurance standards
Accounting and reporting policy
Corporate governance code and stewardship code
55
Prudential Regulation Authority And Financial conduct authority
Only affects investment firms
| FCA advises of listing rules that FTSE 350 companies are required to comply with
56
ICAEW Complaints
Breaching regulation
Departing from guidance
Bringing discredit
(Breach bye-laws)
57
ICAEW complaints and disciplinary procedure
Conciliation
Investigation
Disciplinary proceedings
Appeal
58
Disciplinary committee
Tribunal of 3 people - two chartered accountants and one non-accountant
59
Objectives of corporate governance
Public policy perspective
Stakeholder perspective
Corporate perspective - achieve long term sustained value for shareholders
Stewardship perspective - act in the best interest of the company
60
Who are institutional shareholders?
Insurance companies
Pension funds
Investment trusts
61
Two tier board consist of...
Management board
| Supervisory board
62
Ethical values - Nolan Principles
```
Integrity
Objectivity
Accountability
Openness
Honesty
```
63
Institute of Business Ethics
```
Respect
Transparency
Openness
Fairness
Trust
```
64
Attributes and behaviours of ethical leaders
```
Openness
Courage
Ability to listen
Honest
Fair mindedness
```
65
What is an ethical audit?
A process which measures the internal and external consistency of a company’s value base
66
UK Corporate governance provisions
At least half the board should be NEDs
At least 5 years since member was employee
NEDs can remove and appoint executive directors
NEDs should scrutinise and hold to account the performance of management
Full time executive directors should not take on more than one non executive directorship
All directors should be subject to annual re-election
Chair should not remain in post beyond 9 years
67
Audit committee provisions
3 independent NEDs
Or 2 in the case of smaller companies
One member to have recent and relevant financial experience
Make recommendations on reappointment and removal of external auditors
68
Remuneration provisions
Remuneration committee of at least 3 independent NEDs, or 2 for smaller companies
Chair of the board can only be a member if they were independent on appointment and cannot chair the committee
Remuneration should reflect time commitment and responsibilities of the role
Only basic salary should be pensionable
Notice or contact periods should be one year or less
69
4 factors of production and return
Land - rent
Labour - wages
Capital - interest
Entrepreneurship - profit
70
Business/trade cycle
1. Recession - demand, production, employment fall
2. Depression
3. Recovery - output, employment and income begin to rise, more investment, demand increase
4. Boom - capacity and labour will become fully utilised, price increase, level of investment high
71
Monetary policy
Government policy on money supply, monetary system, interest rates, exchange rates and credit availability
72
Fiscal policy
Government policy on taxation, public borrowing and spending
73
Governments fiscal stance
Expansionary = increased borrowing and spending
Contractionary = increased taxation, no increase in spending
Broadly neutral = increased taxation and spending
74
Expanding demand
Lowering the price
75
Contracting demand
Raising the price
76
Price elasticity of demand
Less than 1 - inelastic
Greater than 1 - elastic
Vertical straight line, PED=0 -> perfectly inelastic
Increase in price, Total expenditure rises
Horizontal line, PED=infinity -> perfectly elastic
Increase in price, Total expenditure will fall
77
Income elasticity of demand
Greater than 1 = income elastic = luxury goods
Between 0 and 1 = Income inelastic = normal goods
Negative = inferior good
78
Price elasticity of supply
Closer to 0, the more inelastic, fixed supply
More elastic, fixed price
79
Perfect competition
```
Many small buyers and sellers
No barriers to entry/exit
Perfect information
Homogeneous products
No collusion between buyers or sellers
```
Suppliers are price takers - sell at market demanded price
All suppliers only earn normal profits
80
Pure, actual, government franchise and natural monopoly
Pure = only one supplier in the market
Actual = one supplier with a dominant market share
Government franchise = pure that has arisen by virtue of government deciding to operate in that way
Natural = market has high levels of fixed costs and low marginal costs
81
Monopolistic competition
```
Many buyers and sellers
Some differentiation
Branding
Some customer loyalty
Few barriers to entry
Significant advertising
```
82
Oligopoly
A few large sellers but many buyers
Product differentiation
Mutual interdependency
83
Allocative efficiency
Goods/services produced in optimum quantities
84
Productive efficiency
Economy produces its goods and services at the lowest factor cost
85
Public goods display 2 key characteristics
Non-excludability
Non-dimishability
86
Factors of market failure
Market imperfection
Externalities
The existence of public goods
Economies of scale
87
Business response to regulation
Non-response
Mere compliance: met by passing on cost of compliance to clients and consumers
Full compliance: behaviour is changed to comply with regulations
Innovation: behaviour exceeds regulations
88
Competition act 1998
Prohibits agreements, business practices and conduct that damage competition
Penalties of up to 10% of annual worldwide revenues
Chapter 1 - collusive behaviour
89
Chapter 2 of competition act
Business impose unfair purchase or selling prices
Limiting production
Applying different trading conditions
Attaching supplementary conditions to contracts
Business has more than 40% of market
90
Competition and Markets Authority
CMA officials can enter premises and demand relevant documents
CMA impose a fine for failure to comply with interim measure of up to 5% of annual revenue
Competition disqualification orders may be made against the directors
They will look into competition, regulation and market issues
91
Barriers to free international trade
Tariffs or custom duties: raise the price paid for the imported goods, supplier is paid the same. Difference is transferred to the government sector
Import quotas: restrictions on quantity
Both domestic and foreign suppliers enjoy a higher price
92
Risk and uncertainty
Risk: possible variation in a outcome
Uncertainty: inability to predict the outcome due to lack of information
93
Business risk
Strategy risk
Product risk
Enterprise risk
94
Financial risk
Liquidity risk: shortage of cash
Gearing risk: risk of high borrowing compared to share capital
Credit risk
Market risk: adverse movement in share price
95
Operational risk
Process risk
People risk: retention of staff and their behaviour
Systems risk: data loss etc
Event risk: key event that has material impact
96
Long-term disaster recovery plan
Standby procedures
Recovery procedures
Personnel management policies
97
Four metrics to measure business resilience
Compliance
Completeness
Value
Capability
