Group B
F1 Set 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. Internal audit staff
B. Senior management
C. External audit staff
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.
Are 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
3. The evaluation and testing of internal controls within an organisation is referred to as
which of the following?
A. Systems audit
B. Transactions audit
C. Management audit
D. Operational audit
Group B
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. Victimisation
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. Y
C. Circle
D. Chain
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.
Linh's firm is an example of which of Charles Handy's cultural typologies?
A. Power
B. Role
C. Task
D. Person
Group B
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
employers
B. Its acceptance of its responsibility to act in the public interest
C. The accountant's responsibility to satisfy the needs of their individual clients
D. Its acceptance of its responsibility to uphold the law
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
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. Decide on the relative importance of each task and prioritise them
B. Prepare a list of all the tasks that have to be performed
C. Complete the tasks that can be performed most easily and quickly
D. Deal with the least desirable or most complex task to ensure that it is out of the
way
Group B
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. Increasing the depreciation of an asset in order that it may be purchased later
from the company for less than it is worth
B. Reducing the value of purchases in order to steal goods from the warehouse
C. Reducing the allowance for receivables to improve the statement of financial
position
D. Increasing the value of sales in order to facilitate money laundering
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. An executive information system
C. management information system
D. decision support system
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 authorisation
C. Checking of work already performed by other staff
Group B
13. Which TWO of the following are most likely to raise ethical problems or concerns for a
company?
A. 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
B. It promotes diversity and equal opportunities amongst its workforce
C. 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
D. Recent customer surveys have voted the company's product as the worst value
for money among its competitors
14. Which TWO of the following statements about Corporate Codes of Ethics are true?
A. They only relate to the way staff deal with colleagues and other staff within an
organisation
B. They promote respect and integrity within an organisation
C. They should identify the minimum acceptable standards of behaviour and
conduct of employees
D. A company does not need them if it always complies with the relevant laws
and regulations
15. Which of the following writers argued that the manager of a business has one basic
function, namely economic performance?
A. Drucker
B. Mayo
C. Mintzberg
Group B
16. Petra is the head of finance in a multinational company. She wishes to ensure that all
accounts staff processing financial information in the accounting system use generally
accepted, common terminology to minimise the possibility of misunderstanding. She has
informed accounts staff that they should in the future refer to creditors as accounts payable, to
debtors as accounts receivable and to assets such as buildings, plant and machinery as non-
current assets.
Petra's guidance is based on source information produced by which of the following?
A. IFRS Interpretations Committee
B. IFAC
C. IASB
D. IFRS Advisory Council
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. A minimum of one member of the committee should have expertise in
financial management
B. All members of the committee should have experience of financial
management
C. The majority of members of the committee should have professional auditing
experience
D. The finance director should be the chairman of the committee
Group B
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
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?
A. To suggest that whichever trainee attends this count will be exempt from
attending the next two with the other trainee having to attend them
B. 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
C. To arbitrarily select one of the trainees to attend the inventory count
D. To ignore the issue believing it to be trivial, in the hope that the trainees will
resolve the dispute amongst themselves
20. A government has forecast the following future trends. Which TWO of these are social
and demographic trends?
A. Rapid increases in household incomes
B. Increased demand for organic and environmentally friendly products
C. Increased revenues from personal taxation
D. Significant increases in single person households
Group B
21. According to Handy, which cultural stereotype is shaped by the interests and talents of
individuals?
A. Role culture
B. Existential culture
C. Task culture
22. Which of the following brings together individuals with different competencies and
specialisms?
A. Functional teams
B. Virtual teams
C. Multi-disciplinary teams
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 current month's cash flow forecast
B. The most recent statement of profit or loss
C. The statement of financial position at the end of the previous month
D. The variance reports from the end of the previous month
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. Results
B. Goals
C. Objectives
D. Aims
Group B
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. Not accept the new engagement
B. Accept the new engagement provided they first tell their existing client about
the potential new engagement
C. Accept the new engagement provided they tell the potential new client about
their existing client
D. Accept the new engagement provided they feel they have sufficient
professional competence to do the work required
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
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. Forecasting returns on surplus funds investments
B. Producing summary data in respect of trade receivables
C. Reporting on the quality of alternative nominal ledger packages
D. Analysing variance reports from a standard cost reconciliation statement
Group B
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. Noise
C. Distortion
29. Which TWO of the following would cause a good's demand curve to shift to the right?
A. A rise in household income
B. A fall in the price of complements
C. An expected fall in the price of the goods
D. decrease in the population
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. Rumours do not circulate through the informal organisation
D. Individuals may communicate horizontally more effectively through the
informal organisation
Group B
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 is entirely focused on getting the job done and pays minimal attention to
team maintenance needs
B. Frida optimises the effectiveness of her team by achieving the highest level of
morale and task accomplishment
C. Frida balances the need to get the job done with the need to maintain the team
D. Frida is a team player and achieves a high level of harmony in the working
group sometimes at the expense of achieving results
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
33. Which of the following should take place first when implementing a performance
appraisal system?
A. Setting the criteria for assessment
B. Deciding on a common approach to appraisal interviews
C. Agreeing on how performance and rewards will be linked
D. Training managers in effective interpersonal skills to be used in appraisal
interviews
Group B
34. The economic forecast produced by the government of Ruritania predicts that the total
aggregate demand in the country will be $200 billion by the end of the current year. The
Ministry of Finance has now received the following revised figures that will affect the
original forecast:
Activity Change in
value
($ billion)
Consumer spending -15
Total government expenditure on capital +10
projects
Imports +7
The purchases of industrial buildings, plant and +8
machinery
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
Group B
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. False
B. True
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. reasury manager
B. Financial controller
C. Financial accountant
D. Management accountant
37. The following statements refer to the ways in which people work together in a team.
Are each of the following statements true or false?
True False
Multi-disciplinary teams bring together the skills of different specialists
Multi-skilled teams always include individuals recruited from different
departments
Group B
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 behaviour
B. Objectivity
C. Integrity
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
40. Which TWO of the following are examples of connected stakeholders?
A. Executive directors
B. Employees
C. Lenders
D. Shareholders
41. Using the mnemonic SPAMSOAP, which financial control procedure involves an
analysis and review of the accounts?
A. Management
B. Arithmetical
C. Organization
Group B
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. Plant
B. Monitor-evaluator
C. Shaper
D. Resource investigator
43. Which of the following organisations would be best able to adopt a wide span of control
in its structure?
A. A hospital offering general care, outpatient services and accident and emergency
services
B. A university offering degree programmes in all arts and science disciplines
C. A call centre in which multi-skilled workers are employed to carry out a wide
variety of tasks
D. A factory in which many workers are employed to carry out homogeneous tasks
44. Kolb's learning cycle comprises active experimentation, experience, observation and
reflection and which other element?
A. Assimilation
B. Application
C. Abstract conceptualisation
D. Positive reinforcement
Group B
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
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
47. The following diagrams represent changes in supply and demand conditions.
The arrows represent shifts in the supply or demand schedules.
Group B
Task 1
Indicate which diagram represents the following.
Diagram Diagram Diagram Diagram
A B C D
An increase in the costs of factors of production
The introduction of a new, more efficient
production process
A reduction in incomes of purchasers of the
good
An increase in the prices of substitute goods
Task 2
Indicate which TWO of the following statements are correct.
A. The supply curve for a product is the upward sloping section of the average
cost curve
B. A change in the price of a product causes a shift along the demand curve
C. If the demand for a product is perfectly elastic, the demand curve is vertical
D. An illegal or unofficial market for goods is usually a consequence of an
artificially imposed minimum price
D. In a perfectly competitive market, the demand curve is horizontal
E. In the long run, the supply curve is horizontal
Group B
48. Background: 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
recognised 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.
For each of the following responsibilities, indicate whether they should be
performed by the chairman or the company secretary.
Chairman Company
secretary
Resolving procedural issues during board meetings
Deciding the time to be allocated to the discussion of each agenda
item at board meetings
Ensuring full contributions are made by directors at board meetings
Issuing the the formal notice of the annual general meeting to
shareholders
Addressing personality clashes between individual directors
Preparation of the minutes of board meetings
Group B
49. Axel, Bo, Corey and Dagmar work in the finance department of Kett Co.
Axel is responsible for summarising 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 finalised 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 categorised 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, categorising 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.
. Recording financial Codifying and Preparing financial
information processing financial statements
information
Axel
Bo
Corey
Dagmar
Group B
50. Background: 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
In relation to McGregor's theory of motivation, indicate whether the following statements are
consistent with theory X or theory Y views.
Theory Theory
X Y
Most individuals go to work only in order to meet their material needs
Workers must be forced or bribed in order to deliver the desired level of
output
Workers are most likely to desist from undesirable behaviour in the
workplace when faced with deterrents or punishment
Work provides a valuable social function and enables individuals to grow
psychologically
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
The creativity and ingenuity of workers is inherent
Group B
Task 2
According to Herzberg, which TWO of the following are powerful methods of achieving
lasting, long-term motivation?
A. Interesting work
B. Annual bonuses
C. Clean and safe working conditions
D. Quality of supervision
E. Recognition
F. Fringe benefits
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.
Group B
Task 1
Indicate the level of Anthony's hierarchy that corresponds to the information required of each
individual.
. Strategic Tactical Operational
Calum
Ella
Frida
Long-term planning regarding the labour resource.
Task 2
Indicate which individual will be able to communicate the information required by using only
a spreadsheet.
A. Calum
B. Ella
C. Frida
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.
Group B
Marek's sales team has under performed 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 under performance, 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.
Task1. For each individual indicate which organisational value is demonstrated.
. Accountability Trust Empowerment Openness
Leila
Marek
Kate
Jonah
Group B
Task2. Indicate which branch of ethics is demonstrated by each of the following
statements.
. Deontological Utilitarian Pluralist Egoist
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.
The individual takes a decision that will not
be universally popular, but is consistent
with the fundamental principles governing
the event.
The individual takes a decision that reflects
his or her own particular ethical view,
recognising that others may disagree but
convinced that it is the right thing to do.
The individual takes a decision that is a
compromise between the views of
dissenting groups, recognising that none
will be fully satisfied, but all will accept it.
