Professional Documents
Culture Documents
MOCK EXAM
This paper is divided into two sections:
Section A -ALL 46 questions are compulsory and MUST be attempted. Each worth 1 or 2 marks
Section B – ALL 6 questions are compulsory and MUST be attempted. Each question carries 4 marks
You have two hours in which to complete the exam
SECTION A – ALL 46 QUESTIONS ARE COMPULSORY AND MUST BE ATTEMPTED ANSWER
1 Complete the following statement relating to organisational planning.
An electronics retailer has decided to hire new staff members in order to deal with
an increase in demand for its products.
The level of planning that this will most closely relate to is
strategic/tactical/operational/business* planning.
*delete as appropriate (2 marks)
2 The use of cloud computing will often reduce capital costs for a business.
Is this statement TRUE or FALSE?
A True
B False (1 mark)
3 The following are attributes of either the divisional structure or the functional structure.
Which TWO of the following are features of the DIVISIONAL structure?
A Economies of scale are encouraged
B Encourages standardisation of outputs and processes
C Adaptable if further diversification is pursued
D Senior managers are able to focus on strategic issues (2 marks)
4 If all employees are highly skilled and motivated it could enable managers to have a
wider span of control within the organisation.
Is this statement TRUE or FALSE?
A True
B False (1 mark)
1
According to Maslow, the part of James’s hierarchy of needs that is most likely to be
met by this offer is self-fulfilment/social/safety/ego*.
*delete as appropriate (2 marks)
2
9 Accountancy is classed as a profession rather than an occupation. Which of the
following is NOT a reason for this?
A Accountancy requires a period of training to enable the mastering of specialised skills
B Accountants are normally highly paid
C Accountants have to comply with a code of ethics
D Accountants are governed by one of a number of professional associations
(2 marks)
11 Adair identified three major areas that leaders need to be able to manage – task,
group and individual needs.
Is this statement TRUE or FALSE?
A True
B False (1 mark)
13 A product has recently had its selling price raised by 5%. This has led to a 10%
reduction in the number of units sold.
Which of the following statements about the product is correct?
A It has a price elasticity of demand of 0.5
B It is unit elastic
C It is likely to be classed as a necessity by customers
D It may have a large number of substitutes (2 marks)
3
14 Which TWO of the following statements about internal audit are correct?
15 Julie is in charge of two members of staff, Ava and Michael, who are constantly in
conflict with each other over the use of the department’s single delivery van. Julie
knows that she
will not be given sufficient funding to purchase additional vehicles. Ava and Michael
will both need access to the van for the foreseeable future and Julie is concerned that
the current conflict is undermining their ability to work well together.
Which approach to conflict management would be most appropriate for Julie to use to
deal with this conflict?
A Suppression
B Denial
C Resolution
D Reduction (2 marks)
4
Which of the following is NOT one of Porter’s five forces that the CEO of S Co is
concerned about?
A Barriers to entry
B Substitutes
C Power of customers
D Power of suppliers (2 marks)
19 When managing your time, which of the following would make a job a high priority?
A Urgency only
B Importance only
C Both importance and urgency (1 mark)
20 A team has recently been formed within a business. The members of the team are
currently agreeing how the group will be run and how decisions will be made. According
to Tuckman’s model, the team has reached the storming stage.
Is this statement TRUE or FALSE?
A True
B False (1 mark)
24 Which TWO of the following are common types of internal control activities
within an organisation?
A Monitoring of controls
B Authorisation
C Control environment
D Physical (2 marks)
25 Which of the following is NOT part of the '4P’s' of the marketing mix?
A Product
B People
C Place (1 mark)
29 Which of the following statements identifies three broad requisites for fraud?
A Collusion, opportunity, motivation
B Dishonesty, opportunity, motivation
C Opportunity, collusion, dishonesty
D Dishonesty, collusion, motivation (2 marks)
7
32 Company G is considering raising finance to invest in new premises. It believes that it
should raise debt finance by way of a bank loan.
Which of the following statements are correct regarding debt and equity finance?
A Interest payments tend to be cheaper than dividends.
B Interest payments can be suspended in the future if H is unable to afford them.
C Dividends are an allowable deduction against H’s profits.
D H will likely need to provide asset security to investors whether it chooses to raise
debt or equity finance. (2
marks)
33 Machines working and reacting like human beings describes which of the following?
A Robotics
B Voice recognition
C Artificial intelligence
D The 4th industrial revolution (2 marks)
35 Noah started a new electronics business many years ago. His business now employs
several dozen staff members. Noah is the sole owner and makes all of the key
decisions within the organisation.
According to Handy, which cultural type exists in Noah’s business?
A Person
B Task
C Power
D Role (2 marks)
37 If an employee does what a manager asks of them because they wish to imitate or
become like their manager, what sort of power does their manager hold over them?
A Referent
B Legitimate
C Expert
D Coercive (2 marks)
39 Charlotte has recently produced a press release for her company in which she has
used a number of figures in a misleading way.
Which of the following IFAC fundamental ethical principles has Charlotte breached?
A Objectivity
B Confidentiality
C Integrity
D Professional competence and due care (2 marks)
9
• Report to a senior manager in charge of ethics
• Resign from the post (2 marks)
10
46 Complete the following statement relating to learning.
Hannah has recently started a new job in D Co. To help her, she is being mentored by an
experienced member of staff.
Hannah is experiencing informal/tacit/formal/incidental* learning.
* delete as appropriate (2 marks)
11
SECTION B – 6 QUESTIONS ARE COMPULSORY AND MUST BE ATTEMPTED
1 (a) Honey and Mumford suggested that there are four approaches to individual
learning. HT Co is training its staff on the use of a new IT system.
Identify which learning approach each of the following employees are adopting.
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2 (a) Management theory includes a number of important concepts.
Classify the following as relating to either leadership, management, supervision or
responsibility:
A Planning
B Leader
C Monitor
D Commanding
E Controlling
F Liaison
G Disseminator
H Organising (0.5 marks each, total = 2 marks)
(Total: 4 marks)
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3 (a) Q Co is considering outsourcing its IT function to a third party IT company on a
fixed fee basis. Q does not consider IT to be core function, as the organisation
currently manufactures tables and chairs for domestic use. A junior accountant
has produced a list of possible advantages of this to the company.
Which FOUR of the following factors are likely advantages of Q
outsourcing its IT function?
A It will reduce the probability of other organisations gaining access to
Q’s information.
B It will reduce uncertainty relating to how much the IT function will cost
Q each year.
C The third party company may have access to IT skills that Q lacks.
D If the third party fails to perform well, Q can easily bring the IT function
back in- house.
E The third party company may have access to more economies of scale
for IT, allowing Q to save money on its IT function.
F It will reduce Q’s dependence on its suppliers.
G Q is likely to gain competitive advantage over rivals with its IT systems.
H It is likely to allow Q to focus its management time on core activities.
(0.5 marks each, total = 2 marks)
(b) Increased use of IT has enabled many companies like Q, to restructure in a
number of different ways.
Q Co has decided to _1_ by getting a local third party IT company to provide a
number of temporary staff to cover the development of a new system for the
company.
(i) Select the concept that best fills gap 1 above.
downsize/delayer/ad-hoc outsource/offshore*
*delete as appropriate
Q Co’s management wishes to _2_ the organisation by using IT to improve
communication. They feel that this will reduce the need for several levels,
who will be made redundant.
(ii) Select the concept that best fills gap 2 above.
downsize/delayer/ad-hoc outsource/offshore*
*delete as appropriate
(Total: 4 marks)
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4 G Co has recently employed a new junior management accountant. The management
accountant has been informed by his manager that G’s working capital is made up of
four parts – inventory, receivables, payables and cash. G can maintain each element
at either a high or low level.
Balance
High Low
Inventory A B
Working
capital Trade receivables C D
Cash E F
Trade payables G H
Identify which of the following advantages relate to having a high or low level of each part
of working capital as shown in the above diagram by entering ONE of the letters A–H.
(i) Attractive to customers as they are able to pay for their purchases later.
(Total: 4 marks)
6 (a) B Co is considering the launch of a new computer printer and is currently planning
its pricing strategy.
It has identified four different options:
A Sell the printer for a very low price. B will then sell ink cartridges to
customers at a high profit margin.
B Sell the printer for the same price as H Co – which sells a similar printer
to the one B is planning to launch.
C Sell the printer for a high price initially. As more competitors move
into the market, the printer price will be dropped.
D Sell the printer for a mark-up on the amount B pays to manufacture each
unit.
Match EACH of the above descriptions with ONE of the pricing approaches
below.
(i) Going-rate pricing
(ii) Price skimming
(iii) Captive product pricing
(iv) Cost-plus pricing.
(0.5 marks each, total = 2 marks)
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(b) The Managing Director of B Co has been given a list of tasks that the company
needs to undertake. However, he is uncertain which of the following
departments each task should be assigned to:
A Research and development
B Marketing
C Purchasing
D Production
Match EACH of the following tasks with ONE of the above departments.
(i) Development of questionnaires to gain customer feedback on
existing products.
(ii) Quality testing of all products sold by B Co.
(iii) Design of products to deal with changing customer needs.
(iv) Monitoring of inventory levels of raw materials within B’s warehouses.
(0.5 marks each, total = 2 marks)
(Total: 4 marks)
2
SECTION A – OBJECTIVE TEST QUESTIONS
1 The level of planning that this will most closely relate to is operational planning.
Operational plans are short-term, detailed and practical strategies that are mainly
concerned with control. Business is another name for tactical. (2 marks)
2 A
The use of cloud computing will often reduce a business's capital cost of owning a
server and the operating cost of running it and supporting it. The business will pay a
usage-based fee to access data on the cloud computing platform. (1 mark)
3 C and D
A and B features relate to a functional structure. (2 marks)
4 A
A manager’s span of control is the number of people that he or she is directly
responsible for.
If employees are skilled and motivated, they will need less management – allowing
a wider span of control. The other three factors would all be likely to narrow the
manager’s span of control. (1 mark)
5 At his annual appraisal, James is offered a large pay rise and a new job title. According
to Maslow, the part of James’s hierarchy of needs that is most likely to be met by this
offer is ego. (Note: in Maslow’s hierarchy, ego needs are sometimes referred to as
esteem needs.)
Try not to get confused between self-fulfilment and ego. Self-fulfilment involves
enabling employees to feel that they have achieved something worthwhile, such as
by offering them a challenging role or allowing them to be creative.
‘Ego needs’ involve employees’ need to be esteemed by other people. Large pay
rises and job titles would therefore tend to help meet these needs. (2 marks)
6 A
The increase in disposable income is likely to cause demand-pull inflation. Demand
for goods and services may well increase faster than the ability of country A to
supply them. This will cause prices to rise. (1 mark)
7 C
Ongoing support and advice to employees would make Ariel a classic example of a
mentor. Louise is acting as a counsellor by helping another worker deal with a
problem. Charlie is helping a colleague improve their skills within a defined time
period, indicating that he is a coach. (2 marks)
3
8 D
The classical approach would be to do nothing. Monetarists (also known as supply-
side economists) recommend that governments only act to remove market
imperfections that might prevent the market from reaching equilibrium. Part of the
Keynesian theory advocates taking steps to reduce demand if the economy is
growing too quickly. The Finance Minister therefore seems to be recommending a
Keynesian approach. (2 marks)
9 B
The level of pay received has no bearing on whether accountancy would be classed
as a profession. The other three are all correct. (2 marks)
10 B
All staff using the same password would be poor IT policy and would increase the
likelihood of internal and external issues. (1 mark)
11 A
By definition. (1 mark)
12 Harry purchases a new computer system. It allows him to input his personal income
for the year, which comes from a number of different sources, and then automatically
calculates his personal tax liability. Harry has purchased an expert system.
An ES (or an expert system) holds specialist or expert knowledge (in this case about
taxation) and allows non-experts to interrogate the system for information, advice
and recommended decisions – in this case, what Harry’s tax liability is for the year.
(1 mark)
13 D
The PED of the product is measured by (percentage change in demand)/
(percentage change in price). This would equal 10%/5% = 2, not 0.5. If the product
was unit elastic, its PED would be exactly one. If the product was a necessity, it is
unlikely that sales would fall significantly if prices rise (it would be inelastic).
However, the large fall in sales could be explained by a large number of rival
products being available that customers have simply swapped onto. (2 marks)
14
Internal audit is not required for all companies – usually only large or public
companies, as well as public bodies. In addition, management – not the internal
auditors themselves – decide on the scope of the internal auditor’s work. (2 marks)
15 D
Suppression and denial are short term solutions only, meaning that they will not be
appropriate as Ava and Michael need to work together for the foreseeable future.
Resolution is unlikely to work as Julie does not have the resources to solve the
problem. Her only sensible option is negotiation/reduction. This might involve
her negotiating a
schedule for each employee to use the vanso they both have similar access. (2 marks)
17 D
Raw materials are in plentiful supply, indicating low supplier power.
However, given the ability of customers to switch to other paint manufacturers or
other products, such as wallpaper, the power of customers and of substitutes
appears to be of concern.
In addition, given the existence of large competitors and the high capital cost of
entering the market, barriers to entry would seem to be high. (2 marks)
18 C
Team workers tend to be concerned with building and maintaining relationships
within the group. (2 marks)
19 C
To be sure of needing high priority, a job would need to have high urgency (i.e. the
deadline is near) and high importance (i.e. the consequences of failure are
significant). (1 mark)
20 B
The team is norming – the stage at which groups establish the norms under which
the group will operate. (1 mark)
21 B
5
G is trying to act for the greater good. In spite of compromising the needs of local
residents, the factory will benefit the wider economy, shareholders and jobseekers.
Their needs are seen to outweigh the needs of local residents. This is a utilitarian
approach. Egoism would be deciding on the basis of what is best for G alone, while
pluralist would be making a decision that does not compromise the needs of any
stakeholder groups. Absolutism would indicate that G believed that the building of
the factory was inherently right or wrong and there is no firm evidence for this in
the scenario. (2 marks)
23 A
By definition (2 marks)
24 B and D
Authorisation controls would include getting approval for submitting expense claims.
Physical controls would include appropriate security for assets.
25 B
The 4Ps are: Price, place, promotion and product. (1 mark)
26 B
This is incorrect – teeming and lading occurs when the receipts of later debtors are
allocated to pay off earlier debtors whose receipts have been stolen by the fraudster.
(1 mark)
27 C
Don’t get confused between group and panel interviews. Group interviews are
where several candidates are interviewed together. While Daniel may feel stressed
by the interview, a stress interview will occur where a candidate is deliberately
placed under stress by an aggressive interviewer. (2 marks)
28 A
Ensuring sustainability may require a significant amount of management time and
attention, which is unlikely to reduce their administrative burden. Options 1, 2 and 3
would, however, be typical benefits of such an approach. (2 marks)
6
29 B
There is no need for collusion as a fraudster may act alone. (2 marks)
30 A
In smaller companies there should be at least two non-executives. They are not
involved in the day-to-day running of the company and should have no links to the
executive directors, as this may impair their independence. In addition, they should
not act for a prolonged period of time as this may also impair their independence.
(2 marks)
31 B
While treasurers will deal with cash management (amongst other things) they do
not produce cash flow statements – this is part of the role of a financial
accounting function. C and D would both be undertaken by a management
accountant. (2 marks)
32 A
Interest tends to be cheaper than dividends. However, a company cannot normally
suspend debt repayments if it can no longer afford them – this is only possible with
dividends. Dividends are not an allowable deduction, but interest is. Finally,
shareholders would not normally receive any security on their investment, meaning
that D is also incorrect.
(2 marks)
33 C
This is a description of artificial intelligence. (2 marks)
34 C
Research has indicated that the all-channel is the best to use for solving complex
problems. The wheel tends to be the fastest and the circle the slowest. (1 mark)
35 C
Power cultures occur where there is one major source of power within the business
– in this case that source is Noah. (2 marks)
36 B
The employees are being motivated by being offered rewards that improve their
quality of life and the quality of life of their families, rather than just pure financial
returns. This would tend to indicate a feminine culture. (2 marks)
37 A
This is referent power. Legitimate power is where a manager is obeyed because of
7
their position within the organisation. Expert power exists when a manager is
obeyed because they have more expertise and knowledge than their subordinates.
Coercive power involves the use of threats or punishments. (2 marks)
38 C
The other aspects are: information systems that are relevant to financial reporting,
and control activities. (1 mark)
39 C
Integrity refers to fair dealing and truthfulness. Charlotte should not have been
associated with the production of any reports that are false or misleading. (2 marks)
40 C
The government has high power and low interest. Mendelow would therefore
suggest that it needs to be kept satisfied. (2 marks)
42 A
Typically, committees will make decisions relatively slowly due to the need for
consensus between members. The other two statements are correct. (1 mark)
43 B
It is a secondary activity, which supports the main manufacturing and selling
functions of the business. (1 mark)
44 D
Only (iv) would be a valid concern. The fact that Eyal has had past business dealings
with GGG would not be of particular concern – especially as he had little to do,
personally, with supplying GGG itself. While he owns a handful of shares in GGG,
there is no indication that this is a material business interest in the company. The
fact that he has been appointed on an annual basis is not a problem and may, in
fact, be an indication of good corporate governance. However, his pre-existing
relationship with the CEO may be a cause for concern. If he is too close to the CEO
he may feel unable to question his decisions or fully scrutinise his actions. (2 marks)
45 B
8
Omar is communicating with a more senior employee of the company who works in
a different department. This is an example of diagonal communication. Vertical
communication is between a subordinate and a superior, while horizontal is
between members of staff at the same level within the organisation. Note that
lateral is another name for horizontal. (1 mark)
9
SECTION B – MULTI-STAGE ANSWERS
1 (a)
10
Marking scheme
Marks
(a) (i) 0.5
(ii) 0.5
(iii) 0.5
(iv) 0.5
(b) (i) 1
(ii) 1
–––
Total 4
–––
2 (a)
11
Marking scheme
Marks
(a) (i) 0.5
(ii) 0.5
(iii) 0.5
(iv) 0.5
(b) 0.5 for each letter 2
–––
Total 4
–––
Marking scheme
Marks
(a) 0.5 marks for each letter 2
(b) (i) 1
(ii) 1
–––
Total 4
–––
4 (i) C
(ii) D
(iii) H
(iv) A
12
Marking scheme
Marks
(i) 1
(ii) 1
(iii) 1
(iv) 1
–––
Total 4
–––
6 (a) (i) B
Going-rate pricing – prices are set to match competitors.
(ii) C
Price skimming – high prices are set when a new product is launched.
Later the price is dropped to increase demand once the customers who
are willing to pay more have been ‘skimmed off’.
(iii) A
Captive product pricing – this is used where customers must buy two
products. The first is cheap to attract customers but the second is
expensive, once they are captive.
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(iv) D
Cost-plus pricing – the cost per unit is calculated and then a mark-up is added.
(b) (i) B
(ii) D
(iii) A
(iv) C
Marking scheme
Marks
(a) (i) 0.5
(ii) 0.5
(iii) 0.5
(iv) 0.5
(b) (i) 0.5
(ii) 0.5
(iii) 0.5
(iv) 0.5
–––
Total 4
–––
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