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SC is a professional football club which is currently listed on a recognised stock exchange. There is a proposal that it builds a new stadium at a location a considerable distance from its current stadium.

There is strong support within the club for the move as the current ground is now over 40 years old and has not been extensively modernised in that time.

However, there is a lot of opposition to the move in the area where it is proposed to locate the new stadium. Objectors claim that the new stadium will increase traffic and pollution in the area and will adversely affect the value of their properties.

Which of the following statements about the responsibility of the board of SC is correct?

A.

SC is now a listed company and so the board should prioritise the interests of shareholders to the exclusion of other stakeholders.

B.

A football club needs to be part of the community in which it exists and so the board should consider the other stakeholders.

C.

The board should conclude that objectors to the new stadium have a legal course of action open to them and if they do not take legal action they should ignore them.

D.

If the board of directors is seen as acknowledging its responsibility to stakeholders other than shareholders this will enhance the reputation of the club and it will be more likely that a compromise can be reached with objectors.

E.

The board should share information about the new development with the local community only to the extent that it is legally obliged to do so.

Which of the following statements concerning the role of a non-executive director (NED) is correct?

A.

Individual NEDs should be on at least five boards if possible so as to give them wide experience.

B.

NEDs are not responsible for determining executive directors' remuneration.

C.

NEDs should satisfy themselves on the integrity of financial information and should develop the control systems to ensure that integrity is maintained.

D.

NEDs have a key role in removing executive directors.

Which of the following actions would breach CIMA's Code of Ethics for Professional Accountants?

A.

An accountant has been asked to evaluate an investment opportunity that is open for a very short time. The accountant has recommended rejecting the opportunity without doing any evaluation because he was too busy to study the proposal properly.

B.

An accountant has been asked to select a new supplier and has decided to recommend a supplier based in country A because that will give the accountant an excuse to visit a family member who lives there.

C.

An accountant has been asked to confirm that a complex financial instrument that has been recommended by the bank is suitable for the company. The accountant does not understand the instrument, but has confirmed its suitability because senior management wishes to use it.

D.

An accountant has been asked to compile a list of all contacts at the company's bank so that they can be included in the mailing list for the calendar and coffee mug that are distributed as business gifts by the company in December of every year.

E.

An accountant has been asked to identify the two least profitable factories so that they can be closed down, with the loss of all jobs. All of the company's factories are located in areas of high unemployment.

You are the management accountant for YY a food manufacturing company with an annual sales revenue of $6 million

You discover that the production manager's records are inconsistent Raw materials purchased do not agree with the total recorded for transfers to production plus wastage There is an average shortfall of 2% of purchases

You have investigated and discovered that there are often errors made during manufacturing that results in food that is safe to eat but. because of visual flaws, cannot be sold

The production manager is supposed to scrap all such damaged products and write all such losses off as waste You have discovered however that he has been giving the damaged food to a charity that assists homeless people No records are made of such gifts in order to conceal the losses due to manufacturing errors

Which of the following actions should you take? Select ALL that apply

A.

Instigate disciplinary action this is both theft and poor management

B.

Do nothing; this is a good cause and the amount is insignificant

C.

Instigate a review of the production process to potentially reduce the amount of wastage.

D.

Instigate a confidential but documented review with the production manager and tell him to stop

E.

Instigate a process whereby edible but unsellable items can be given to the charity officially

J plc is a wholesale building supply business. It has a large warehouse where some of its materials are stored. Last month three accidents occurred where employees were slightly injured whilst moving items from the 5th shelf. The 5th shelf is located 15 metres up from the ground.

This is a health and safety risk and could also be a reputation risk in the longer term.

Which of the following risk mitigations should the company employ?

A.

Transfer by insuring against this risk.

B.

Reduce by storing some items on the first three shelves and storing other items outside.

C.

Accept by just accepting this is a risk the company has to take and some employees may get injured.

D.

Avoid by sending the employees on a training course on Health and Safety.

Systems Development Lifecycle (SDLC) is used to manage risk within the development of new computer systems.

Which THREE of the following are appropriate controls to manage risk within the SDLC Process?

A.

When planning the new system, a clear business case must be approved specifying functionality, data transformation, expected costs and benefits.

B.

When designing the new system, controls must be put in place to ensure that all the functionalities of the old system are replicated.

C.

When developing the new system, the developers must follow defined programming standards and carry out component test to specified test harness outputs.

D.

When doing the analysis for the new system particular care should be taken over the data specification, transformation and manipulation, ensuring that expected outputs are defined and that such output meets the needs and expectations of the business users.

E.

When the implementation of the new system is taking place, parallel running must be undertaken to ensure the output for the new system exactly matches that from the old system.

F.

The Post Completion Review should take place immediately after the implementation while all the facts are still fresh in everyone's minds.

CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW has ten branches located in its home country and has just opened a foreign branch for the first time It has recently made some changes to the structure and implementation of its control system.

Which TWO of the following changes would be most likely to improve the overall control system?

A.

CW has just opened a bank account in the currency in which the newly opened branch is now operating

B.

Establishing an internal audit department

C.

Excess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments

D.

Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches

E.

A policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register

There are many method for appraising capital projects.

Select ALL correct statements.

A.

The time value of money should be the same for all similar competing projects.

B.

Decisions should only consider the financial implications of the project.

C.

No one method of capital appraisal taken alone is adequate to evaluate competing projects.

D.

Net Present Value evaluation considers a range of different discount rates considering different risk factors and finance methods.

E.

Opportunity cost is only relevant when capital is scarce.

F.

All projects should be evaluated using sensitivity analysis.

Select the most appropriate level of responsibility for managing each of the following risks.

UIO designs clothes and pays third parties to manufacture them A recent television programme showed that two of the factories used by UIO were employing illegal immigrants whose status was used by the factory's owners to force them to work for low wages and in unpleasant and dangerous conditions. These factories were located in a developed country with strong labour laws

Classify each of the following statements as true or false: