ICAEW BTF UPDATED EXAMS TEST PAPER
QUESTIONS AND ANSWERS SURE A+
✔✔With regards to internal controls, what are the managers responsible for? What
about the board of directors? - ✔✔Managers are supposed to implement the controls
and monitor them. The board of directors are responsible for policy making, reviewing
effectiveness and reporting to shareholders.
✔✔What are the types of finance activities for a company and what are their
responsibilities? - ✔✔Finance function (overarching)
Management accounting: budgeting, decision making, performance measurement,
capital budgeting, pricing --> internal
Treasury management: cash budgets, long-term finance decisions, managing financial
risk, management of working capital
Financial reporting: financial statements, tax, provision of information to external
regulators --> external
✔✔What are the key features of an organisation? - ✔✔Social arrangement that pursues
collective goals, controls its own performance, and has a boundary separating it from its
environment
,✔✔What are Mintzberg's 5 Ps of strategy? - ✔✔Plan - for example a budget
Ploy - like a manoeuvre in a competitive game
Pattern - something you tend to do
Position - matching internal and external factors
Perspective - what is your attitude to the environment?
✔✔What are the stages of the rational planning model? - ✔✔SWOT analysis (internal
and external)
Corporate appraisal
Mission, goals and objectives
GAP (difference between the appraisal and the mission)
Strategic choice
Implementation --> review and control (feedback loop)
✔✔What is cost leadership, differentiation, and focuses? - ✔✔Cost leadership simply
about producing at the lowest cost in the industry as a whole (note that not necessarily
charging the lowest prices
Differentiation about providing a product or service that the industry believes to be
unique
Focus/niche means restricting activities to one section of the market (can have both a
cost focus niche and differentiation niche)
✔✔When would we use a SWOT analysis? - ✔✔At the corporate appraisal stage
✔✔What is risk exposure? - ✔✔Simply a measure of the way a business is faced by
risks, whether financial/business/etc.
✔✔What are the fundamental and enhancing qualitative characteristics of financial
reporting? - ✔✔Fundamental: relevance and faithfulness of representation
Enhancing: understandability, comparability, verifiability and timeliness
✔✔What is tactical information? What about operational, strategic, and planning? -
✔✔Helps deal with short-term issues and opportunities. Operational is to do with the
day-to-day, strategic information has longer term concerns, and planning information is
explicitly to do with plans.
✔✔When would we like to use a management information system? - ✔✔To help us
make STRUCTURED decisions. These can be reduced to a series of rules which, if
followed, will lead to the correct decision being made.
, ✔✔What are the factors for a balanced scorecard model? What are some example
metrics? - ✔✔Customer: satisfaction, returns rates, etc.
Internal business processes: product quality, failure rates, etc.
Innovation and learning: employee retention, time to market for new products, etc.
Financial: gross margin, net margin, etc.
✔✔What is a fundamental accounting principal with regards to assets and liabilities? -
✔✔When in doubt, understate assets and overstate liabilities
✔✔What does integrity imply? - ✔✔Professional responsibility
✔✔Is anyone allowed to say they are an accountant and offer a full range of
accountancy services? - ✔✔No - while accountant is not a protected term, there are
some things (like insolvency/statutory audit) that require certification
✔✔What is the FRRP and what do they do? - ✔✔Financial reporting review panel - they
investigate departures from accounting standards by large companies such as those
listed on LSE
✔✔For the AGM of a public company, which committees must be represented by their
respected chairs?
Can the chairman be a member of the remuneration committee? - ✔✔Audit,
remuneration and nomination
He may be a member, but cannot chair the committee
✔✔Who is responsible for reviewing arrangements about disclosures of wrongdoing in a
company? - ✔✔The audit committee
✔✔When should lead or reviewing audit partners be rotated according to the Sarbanes-
Oxley act? According to the act, where does responsibility for the company's internal
financial controls lie? - ✔✔Every 5 years. Responsibility lies with the CEO and CFO. If
listed in the USA must comply with the act
✔✔What is a mission, vision, goal, and plan? - ✔✔Mission lays out the purpose of an
organisation (create value for shareholders), as well as how they will do it and what their
values are
Vision involves some element of looking forward to a future state
QUESTIONS AND ANSWERS SURE A+
✔✔With regards to internal controls, what are the managers responsible for? What
about the board of directors? - ✔✔Managers are supposed to implement the controls
and monitor them. The board of directors are responsible for policy making, reviewing
effectiveness and reporting to shareholders.
✔✔What are the types of finance activities for a company and what are their
responsibilities? - ✔✔Finance function (overarching)
Management accounting: budgeting, decision making, performance measurement,
capital budgeting, pricing --> internal
Treasury management: cash budgets, long-term finance decisions, managing financial
risk, management of working capital
Financial reporting: financial statements, tax, provision of information to external
regulators --> external
✔✔What are the key features of an organisation? - ✔✔Social arrangement that pursues
collective goals, controls its own performance, and has a boundary separating it from its
environment
,✔✔What are Mintzberg's 5 Ps of strategy? - ✔✔Plan - for example a budget
Ploy - like a manoeuvre in a competitive game
Pattern - something you tend to do
Position - matching internal and external factors
Perspective - what is your attitude to the environment?
✔✔What are the stages of the rational planning model? - ✔✔SWOT analysis (internal
and external)
Corporate appraisal
Mission, goals and objectives
GAP (difference between the appraisal and the mission)
Strategic choice
Implementation --> review and control (feedback loop)
✔✔What is cost leadership, differentiation, and focuses? - ✔✔Cost leadership simply
about producing at the lowest cost in the industry as a whole (note that not necessarily
charging the lowest prices
Differentiation about providing a product or service that the industry believes to be
unique
Focus/niche means restricting activities to one section of the market (can have both a
cost focus niche and differentiation niche)
✔✔When would we use a SWOT analysis? - ✔✔At the corporate appraisal stage
✔✔What is risk exposure? - ✔✔Simply a measure of the way a business is faced by
risks, whether financial/business/etc.
✔✔What are the fundamental and enhancing qualitative characteristics of financial
reporting? - ✔✔Fundamental: relevance and faithfulness of representation
Enhancing: understandability, comparability, verifiability and timeliness
✔✔What is tactical information? What about operational, strategic, and planning? -
✔✔Helps deal with short-term issues and opportunities. Operational is to do with the
day-to-day, strategic information has longer term concerns, and planning information is
explicitly to do with plans.
✔✔When would we like to use a management information system? - ✔✔To help us
make STRUCTURED decisions. These can be reduced to a series of rules which, if
followed, will lead to the correct decision being made.
, ✔✔What are the factors for a balanced scorecard model? What are some example
metrics? - ✔✔Customer: satisfaction, returns rates, etc.
Internal business processes: product quality, failure rates, etc.
Innovation and learning: employee retention, time to market for new products, etc.
Financial: gross margin, net margin, etc.
✔✔What is a fundamental accounting principal with regards to assets and liabilities? -
✔✔When in doubt, understate assets and overstate liabilities
✔✔What does integrity imply? - ✔✔Professional responsibility
✔✔Is anyone allowed to say they are an accountant and offer a full range of
accountancy services? - ✔✔No - while accountant is not a protected term, there are
some things (like insolvency/statutory audit) that require certification
✔✔What is the FRRP and what do they do? - ✔✔Financial reporting review panel - they
investigate departures from accounting standards by large companies such as those
listed on LSE
✔✔For the AGM of a public company, which committees must be represented by their
respected chairs?
Can the chairman be a member of the remuneration committee? - ✔✔Audit,
remuneration and nomination
He may be a member, but cannot chair the committee
✔✔Who is responsible for reviewing arrangements about disclosures of wrongdoing in a
company? - ✔✔The audit committee
✔✔When should lead or reviewing audit partners be rotated according to the Sarbanes-
Oxley act? According to the act, where does responsibility for the company's internal
financial controls lie? - ✔✔Every 5 years. Responsibility lies with the CEO and CFO. If
listed in the USA must comply with the act
✔✔What is a mission, vision, goal, and plan? - ✔✔Mission lays out the purpose of an
organisation (create value for shareholders), as well as how they will do it and what their
values are
Vision involves some element of looking forward to a future state
