Mirchawala’s Hub of Accountancy

F1 Accountant in Business
F1: Mock Exam 2
Question#1:
In the context of fraud detection and prevention, who may conduct a thorough review of systems and
controls during a surprise visit?
A. External audit staff
B. Internal audit staff
C. Senior management
Question#2:
Country X has no legislation on diversity in employment but enforces highly effective equal pay laws. JKL
Co has a recruitment and selection policy that explicitly commits the company to diversity in
employment. PQR Co has no policy in this respect and is not committed to diversity in employment.
Is each of the following statements true or false?
True False
Assuming that there is perfect knowledge of job opportunities and no barriers to movement of the
workforce PQR Co will pay lower wages and salaries than JKL Co
PQR Co is exposed to greater risk of skills shortages than JKL Co
Question#3:
The evaluation and testing of internal controls within an organisation is referred to as which of the
following?
A. Operational audit
B. Management audit
C. Transactions audit
D. Systems audit
Question#4:
Olivia attended a job interview where she was asked if she planned to have children in the next five
years.
What type of discrimination is being shown here?
A. Indirect discrimination
B. Direct discrimination
C. Victimization
Question#5:
Alex, Betty, Charles, Denise and Edwin are colleagues in the same team. Their team leader has sent an
email to each of them attaching an agenda for a forthcoming meeting which the whole team is required
to attend in order to review monthly performance.
This is an example of which type of communication pattern?
A. Wheel
B. Circle
C. Chain
D. Y
Question#6:
Linh runs a small consultancy firm which she established several years ago building on the contacts she
made with her previous company. She has found that she delivers high quality results when the work is
interesting to her and the environment is conducive to her working style. Linh encourages the six
consultants that work in her firm to develop business in the same way offering a high level of discretion
on work that is accepted and declined by them. She exerts little direct authority over her team provided
it delivers an acceptable return to the company.

From the Desk of Sir Owais Mirchawala Page 1

 Mirchawala’s Hub of Accountancy

Linh's firm is an example of which of Charles Handy's cultural typologies?

A. Person
B. Task
C. Role
D. Power
Question#7:
Which of the following can be considered as a distinguishing mark of the accountancy profession?
A. The accountant's responsibility to satisfy the needs of their individual clients
B. Its acceptance of its responsibility to uphold the law
C. Its acceptance of its responsibility to act in the public interest
D. The accountant's responsibility to satisfy the needs of their individual employers
Question#8:
Market research for product Alpha suggests that a 10% drop in price would lead to a 12% increase in
quantity demanded.
Which of the following describes the demand for product Alpha?
A. Price elastic B. Price inelastic
Question#9:
Charles has to manage his workload for the day.
In order to manage his time effectively what are the first TWO actions that Charles should take?
A. Deal with the least desirable or most complex task to ensure that it is out of the way
B. Complete the tasks that can be performed most easily and quickly
C. Prepare a list of all the tasks that have to be performed
D. Decide on the relative importance of each task and priorities them
Question#10:
Which of the following cases of fraud will have the effect of reducing the profit figure shown in the
financial accounts of a company?
A. Reducing the allowance for receivables to improve the statement of financial position
B. Reducing the value of purchases in order to steal goods from the warehouse
C. Increasing the depreciation of an asset in order that it may be purchased later from the company for
less than it is worth
D. Increasing the value of sales in order to facilitate money laundering
Question#11:
Efon is a trainer with a large insurance company. He is involved in a project that will enable trainees to
obtain quotations for insurance policies by inputting data from clients and other variables into a
program on their laptop computers. The program also has a learning and development facility through
which trainees can progress through a series of modules, all of which include structured tasks that test
their problem solving abilities.
The system that Efon is using in the training project is which of the following?
A. A data warehouse
B. A decision support system
C. A management information system
D. An executive information system
Question#12:
Which TWO of the following controls are aimed at the prevention of fraud rather than its detection or
investigation?
A. Appropriate procedures for interviewing, recruitment and appraisal
B. Segregation of duties such as cheque signing and payment authorization
C. Checking of work already performed by other staff

From the Desk of Sir Owais Mirchawala Page 2

 Mirchawala’s Hub of Accountancy

Question#13:
Which TWO of the following are most likely to raise ethical problems or concerns for a company?
A. Recent customer surveys have voted the company's product as the worst value for money among its
competitors
B. A human rights group has recently exposed that one of the company's main suppliers is using child
labour and is paying its staff very low wages
C. The health and safety inspector feels that the fire exits from its factory are very poorly identified and
could make the factory unsafe in the event of a fire
D. It promotes diversity and equal opportunities amongst its workforce
Question#14:
Which TWO of the following statements about Corporate Codes of Ethics are true?
A. A company does not need them if it always complies with the relevant laws and regulations
B. They should identify the minimum acceptable standards of behavior and conduct of employees
C. They promote respect and integrity within an organization
D. They only relate to the way staff deal with colleagues and other staff within an organisation
Question#15:
Which of the following writers argued that the manager of a business has one basic function, namely
economic performance?
A. Mayo
B. Drucker
C. Mintzberg
Question#16:
Which of the following would be an internal source of big data for a retail organisation?
A. Customer social media interactions
B. Processed customer sales data
C. Published government data
D. Sales growth data from an industry body
Question#17:
BCD Co is a listed company. Its board of directors is reviewing the composition of the audit committee.
Which of the following statements is consistent with generally accepted best practice in relation to
the composition of the audit committee?
A. All members of the committee should have experience of financial management
B. The majority of members of the committee should have professional auditing experience
C. A minimum of one member of the committee should have expertise in financial management
D. The finance director should be the chairman of the committee
Question#18:
Positive discrimination is the process of taking active steps to encourage people from disadvantaged
groups to apply for jobs and training and to compete for vacancies.
Is the above statement true or false?
A. True
B. False
Question#19:
An audit firm needs one of its two trainee accountants to attend an inventory count at the weekend but
neither of them wants to do it both claiming they are busy.
They are both aware that the other one does not want to attend the count, and this is creating tension
between them. The audit manager, who believes that integration and collaboration are the best
responses to handling conflict, has been asked to resolve the situation.
Which of the following is the manager's approach MOST likely to be?

From the Desk of Sir Owais Mirchawala Page 3

 Mirchawala’s Hub of Accountancy

A. To ignore the issue believing it to be trivial, in the hope that the trainees will resolve the dispute
amongst themselves
B. To arbitrarily select one of the trainees to attend the inventory count
C. To explain that the firm has to have a representative at the count so the trainees must be prepared
to modify their own wishes for the benefit of the firm
D. To suggest that whichever trainee attends this count will be exempt from attending the next two
with the other trainee having to attend them
Question#20:
A government has forecast the following future trends. Which TWO of these are social and
demographic trends?
A. Increased demand for organic and environmentally friendly products
B. Significant increases in single person households
C. Increased revenues from personal taxation
D. Rapid increases in household incomes
Question#21:
According to Handy, which cultural stereotype is shaped by the interests and talents of individuals?
A. Task culture
B. Existential culture
C. Role culture
Question#22:
Which of the following brings together individuals with different competencies and specialisms?
A. Functional teams
B. Virtual teams
C. Multi-disciplinary teams
Question#23:
The finance director of a company is concerned that the company will not have sufficient cash available
at the end of the month to pay the staff's wages unless he arranges an overdraft with the bank.
Which of the following will be most useful to the finance director in working out whether he needs to
arrange the overdraft?
A. The most recent statement of profit or loss
B. The statement of financial position at the end of the previous month
C. The current month's cash flow forecast
D. The variance reports from the end of the previous month
Question#24:
Which of the following terms best describes the measureable outcomes to be achieved within a
definite time limit as part of a personal development plan?
A. Goals
B. Results
C. Aims
D. Objectives

From the Desk of Sir Owais Mirchawala Page 4

 Mirchawala’s Hub of Accountancy

Question#25:
An accountant has been approached by a company to provide it with advice. The company is not
currently a client, but is in direct competition with one of the accountant's existing clients.
What should the accountant do in this instance?
A. Accept the new engagement provided they feel they have sufficient professional competence to do
the work required
B. Accept the new engagement provided they tell the potential new client about their existing client
C. Not accept the new engagement
D. Accept the new engagement provided they first tell their existing client about the potential new
engagement
Question#26:
Non-executive directors should have no business, financial or other connection with the company, apart
from fees and shareholdings.
Is this statement true or false?
A. False
B. True
Question#27:
Martin is the management accountant of a large company.
Which of Martin's duties is concerned with work relating to the management of the working capital
cycle?
A. Reporting on the quality of alternative nominal ledger packages
B. Producing summary data in respect of trade receivables
C. Forecasting returns on surplus funds investments
D. Analyzing variance reports from a standard cost reconciliation statement
Question#28:
The meaning of a message can be lost at the coding and decoding stages.
What is the name given to this process?
A. Feedback
B. Distortion
C. Noise
Question#29:
Which TWO of the following would cause a good's demand curve to shift to the right?
A. A decrease in the population
B. An expected fall in the price of the goods
C. A fall in the price of complements
D. A rise in household income
Question#30:
Which of the following statements is correct in relation to the informal organisation?
A. The informal organisation has only a negative effect on the organisation and its objectives
B. Communications through the informal organisation will always be slower than through formal
communication channels
C. Rumors do not circulate through the informal organization
D. Individuals may communicate horizontally more effectively through the informal organisation

From the Desk of Sir Owais Mirchawala Page 5

 Mirchawala’s Hub of Accountancy

Question#31:
Frida has attended a personal development programme on which she participated in an exercise based
on the Blake and Mouton managerial grid. One conclusion of the exercise is that she demonstrates a
'5.5' leadership style.
What does the outcome of the exercise demonstrate?
A. Frida optimizes the effectiveness of her team by achieving the highest level of morale and task
accomplishment
B. Frida is a team player and achieves a high level of harmony in the working group sometimes at the
expense of achieving results
C. Frida balances the need to get the job done with the need to maintain the team
D. Frida is entirely focused on getting the job done and pays minimal attention to team maintenance
needs
Question#32:
Which TWO of the following are characteristics of a relativist approach to ethics?
A. There is a set of moral rules which are always right
B. Ethics are linked to cultural beliefs
C. What is right in one situation may not be right in another
Question#33:
Which of the following should take place first when implementing a performance appraisal system?
A. Deciding on a common approach to appraisal interviews
B. Agreeing on how performance and rewards will be linked
C. Setting the criteria for assessment
D. Training managers in effective interpersonal skills to be used in appraisal interviews
Question#34:
The economic forecast produced by the government of Ruritania predicts that the total
aggregate demand in the country will be $200 billion by the end of the current year. The
Ministry of Finance has now received the following revised figures that will affect the
original forecast:

Activity Change in value

($ billions)
Consumer spending -15
Total government expenditure on capital projects +10
Imports +7
The purchases of industrial buildings, plant and machinery +8
Total expenditure by local government +7
Exports +4
Which of the following is the level of aggregate demand when adjusted for these figures?
A. $251 billion
B. $214 billion
C. $207 billion
D. $210 billion

From the Desk of Sir Owais Mirchawala Page 6

 Mirchawala’s Hub of Accountancy

Question#35:
Charles, an accountant, suspects Lin, a client, of money laundering. By warning Lin that he intends
making a report to the appropriate authority, Charles is committing an offence.
Is the statement true or false?
A. True
B. False
Question#36:
Which of the following supports the marketing function by analysing and projecting the costs and
revenues of a new product and assessing the overall implications of introducing the product for the
organisation?
A. Financial controller
B. Treasury manager
C. Financial accountant
D. Management accountant
Question#37:
Which of the following is the correct definition of Artificial Intelligence?
A. The ability of computer applications to perform routine activities and processing of data without the
input of a human
B. A system which collects, processes and analyses information which an organisation can use for
decision-making
C. A program within a system designed to independently solve complex problems and make decisions
D. The automation and replication of physical human capabilities by a machine
Question#38:
According to the IESBA (IFAC) code of ethics, professional accountants are obliged to comply with
relevant laws and regulations.
Which fundamental principle provides this guidance?
A. Professional behavior
B. Objectivity
C. Integrity
Question#39:
Which of the following is an advantage of a matrix structure in an organisation?
A. Less difficulty in coordinating work activities
B. Precise definition of roles in individual jobs
C. Greater flexibility in deployment of skills
D. Consistency in decision taking
Question#40:
Which TWO of the following are examples of connected stakeholders?
A. Executive directors
B. Employees
C. Shareholders
D. Lenders
Question#41:
Using the mnemonic SPAMSOAP, which financial control procedure involves an analysis and review of
the accounts?
A. Organisation
B. Management
C. Arithmetical

From the Desk of Sir Owais Mirchawala Page 7

 Mirchawala’s Hub of Accountancy

Qusetion#42:
Janet is a member of a project group. She is highly knowledgeable and considered by her colleagues to
be rather intellectual and strategic in her approach. Janet demonstrates great intuition when dealing
with problems sometimes adopting unorthodox but effective methods. However some of the team
regard her as detached and uncommunicative, and she can sometimes disregard practical details
without explanation.
According to Belbin's team roles theory Janet is an example of which of the following?
A. Monitor-evaluator
B. Resource investigator
C. Shaper
D. Plant
Queston#43:
Which of the following organizations would be best able to adopt a wide span of control in its
structure?
A. A factory in which many workers are employed to carry out homogeneous tasks
B. A call centre in which multi-skilled workers are employed to carry out a wide variety of tasks
C. A university offering degree programmes in all arts and science disciplines
D. A hospital offering general care, outpatient services and accident and emergency services
Question#44:
Kolb's learning cycle comprises active experimentation, experience, observation and reflection and
which other element?
A. Application
B. Positive reinforcement
C. Assimilation
D. Abstract conceptualization
Question#45:
What type of unemployment arises when there are jobs available, but information on job
opportunities is not available to all those who are unemployed?
A. Structural
B. Seasonal
C. Frictional
Question#46:
Which of the following is a responsibility of a mentor?
A. To help others to explore their own problems
B. To show a trainee how to perform tasks
C. To be a role model for an employee

From the Desk of Sir Owais Mirchawala Page 8

 Mirchawala’s Hub of Accountancy

‘’Section B”Question#47:
The following diagrams represent changes in supply and demand conditions.

The arrows represent shifts in the supply or demand schedules.

Task 1: 2 Marks
Indicate which diagram represents the following.
Diagram A Diagram B Diagram C Diagram D
An increase in the prices of substitute goods
The introduction of a new, more efficient production process
An increase in the costs of factors of production
A reduction in incomes of purchasers of the good
Task 2: 2 Marks
Indicate which TWO of the following statements are correct.
 The supply curve for a product is the upward sloping section of the average cost curve
 In a perfectly competitive market, the demand curve is horizontal
 An illegal or unofficial market for goods is usually a consequence of an artificially imposed minimum
price
 A change in the price of a product causes a shift along the demand curve
 If the demand for a product is perfectly elastic, the demand curve is vertical
 In the long run, the supply curve is horizontal

From the Desk of Sir Owais Mirchawala Page 9

 Mirchawala’s Hub of Accountancy

Question#48:
New Co will be applying for a listing on its national stock exchange in the near future. The company has
until now been family owned, with Karl, its majority shareholder, occupying the role of chairman, chief
executive officer and secretary.
New Co's board of directors understands that it has to segregate certain roles to satisfy recognized
standards of corporate governance, particularly those of chairman and chief executive. It also wishes to
ensure that the terms of reference of the chairman and the company secretary are clearly defined.

Task 1: 3 Marks
For each of the following responsibilities, indicate whether they should be performed by the chairman
or the company secretary.
Chairman Company secretary
 Issuing the formal notice of the annual general meeting to shareholders
 Ensuring full contributions are made by directors at board meetings
 Resolving procedural issues during board meetings
 Preparation of the minutes of board meetings
 Deciding the time to be allocated to the discussion of each agenda item at board meetings
 Addressing personality clashes between individual directors
Task 2: 1 Mark
Assuming that New Co will appoint an independent, non-executive director as its chairman, and that
the company adopts best practices in corporate governance, which TWO of the following statements
are correct?
 The chairman will be engaged by New Co as an employee under a contract of service
 A substantial proportion of the chairman's remuneration will be made up of performance-related
rewards
 The chairman should attend all standing committees of the company
 The shareholders are able to dismiss the chairman by resolution at a general meeting
 The same individual should not be the chairman and company secretary
 The chairman must not hold shares in the company
Question#49:
Axel, Bo, Corey and Dagmar work in the finance department of Kett Co.
Axel is responsible for summarizing confirmed financial information from the nominal ledger and
bringing it together to identify annual totals for revenue, expenditure and capital items in order to
present finalized accounting information for circulation to shareholders. All of the figures have been
checked for accuracy.
Bo deals with hundreds of items of income and expenditure each day. Her job is to check the accuracy of
the figures if there is any doubt about this. One time consuming aspect of her work is to decide how
many sundry items are to be categorized for accounting purposes. This is because those who submit the
figures sometimes provide unclear explanations, or no explanations at all, in respect of the income
generated or expenditure incurred.
Corey is a data input clerk who processes several thousand vouchers each day in order to put them into
the accounting system.
Dagmar deals with overdue accounts receivable and has to deal with reports from the sales department,
categorizing each client according to whether they can or cannot receive credit in the future. In serious
cases he must decide whether they should be handed to external debt collection agencies.
For each of the following functions identify which of the individuals are performing them. 4 Marks
Recording financial Codifying and processing Preparing financial statements

From the Desk of Sir Owais Mirchawala Page 10

 Mirchawala’s Hub of Accountancy

Information financial information

Axel
Bo
Corey
Dagmar
Question#50:
Managers are classified by McGregor into two main opposing styles based on their attitude and
perceptions of the abilities and motivation of their employees.
Task 1: 3 Marks
In relation to McGregor's theory of motivation, indicate whether the following statements are
consistent with theory X or theory Y views.
Theory X Theory Y
 Workers must be forced or bribed in order to deliver the desired level of output
 The creativity and ingenuity of workers is inherent
 Self-discipline is more effective than any discipline imposed by others and under the right
circumstances may be harnessed by management in a positive manner
 Most individuals go to work only in order to meet their material needs
 Work provides a valuable social function and enables individuals to grow psychologically
 Workers are most likely to desist from undesirable behavior in the workplace when faced with
deterrents or punishment
Task 2: 1 Mark
According to Herzberg, which TWO of the following are powerful methods of achieving lasting, long-
term motivation?
A. Quality of supervision
B. Annual bonuses
C. Recognition
D. Interesting work
E. Fringe benefits
F. Clean and safe working conditions
Question#51:
Calum is the training manager for his organisation. He has been instructed by his manager to prepare
detailed information for consideration by the executive committee setting out how the training needs of
the organisation will be met for the forthcoming financial year. The executive committee requires a
detailed description of the needs that will be addressed, the methods of training to be used, the extent
to which internal and external trainers will be deployed and how the learning will be validated. For the
time being, no budgetary information is required.
Ella is the manager of sales personnel in a call centre. She has to prepare quantitative information for
her team leaders showing the number of calls made by each member of staff, the number of calls that
resulted in successful sales, the number of hours worked by each member of staff, and their attendance
and absence rates.
Frida is the head of human resources in her company. She has to prepare a workforce plan setting out
the projected supply and demand for staff at all levels over the next three year period, taking account of
retirements, estimated resignations, new posts to be created, positions that will no longer be required
and a commentary on areas in which there may be skills shortages, and her recommended strategy for
addressing these shortages.

From the Desk of Sir Owais Mirchawala Page 11

 Mirchawala’s Hub of Accountancy

Task 1: 3 Mark
Indicate the level of Anthony's hierarchy that corresponds to the information required of each
individual.
Strategic Tactical Operational
Calum
Ella
Frida
Task 2: 1 Mark
Indicate which individual will be able to communicate the information required by using only a
spreadsheet.
A. Calum B. Ella C. Frida
Question#52:
Jonah is the executive director responsible for branch operations in a large company in the banking
sector. The branch managers are all very experienced so he has decided to increase the limits on loan
applications they can agree without having to refer them to head office. However, he is not sure that
they will all welcome such authority, so he has instructed the lending department to monitor their
performance closely.
Kate has received an expenses claim from Judyta, but one item is not supported by a valid receipt.
Judyta explained that this was mislaid. Kate and Judyta do not get on well, but Kate is sure that Judyta is
honest, so she allows the claim.
Marek's sales team has underperformed significantly for several months, and a decision has been taken
by his line manager that 30% of the team must be dismissed. Marek understands that he is partially to
blame for their underperformance, as he did not give them as much support as they needed. In
response to the decision, he has offered to resign his position.
Leila has been warned by her manager that her performance has not been up to standard, and that
great improvement is necessary. Leila replied that she understood that this was the case, but informed
her manager that she had problems with some of her colleagues who were deliberately leaving some of
the most difficult tasks for her to do.
Task 1: 2 Marks
For each individual indicate which organizational value is demonstrated.
Accountability Trust Empowerment Openness
Kate
Jonah
Marek
Leila
Task 2: 2 Marks
Indicate which branch of ethics is demonstrated by each of the following statements.
Deontological Utilitarian Pluralist Egoist
A. The individual takes a decision that is a compromise between the views of dissenting groups,
recognizing that none will be fully satisfied, but all will accept it.
B. The individual takes a decision that reflects his or her own particular ethical view, recognizing that
others may disagree but convinced that it is the right thing to do.
C. The individual takes a decision that will not be universally popular, but is consistent with the
fundamental principles governing the event.
D. The individual takes a decision based on the view that it will benefit the greatest number of people,
even though the interests of minorities may be compromised.
End Paper
(!) Best of Luck (!)

From the Desk of Sir Owais Mirchawala Page 12