ACCA CAT Paper T5 Managing People and Systems Solved Past Papers

Certified ACCounting teChniCiAn exAminAtion
SAmple multiple ChoiCe queStionS – June 2009

Paper T5 Managing People and Systems
Section A only All questions are compulsory Note: Section B of the actual exam p
aper will contain five written questions
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the following questions are typical of those that will appear in Section A of th
e examination paper from June 2009 onwards. there will be a total of twelve ques
tions in section A, three from each of the first four syllabus sections as indic
ated below. All questions in Section A will be worth two marks each.
Syllabus section 1 the business and accounting environment 1 Which of the follow
ing is an acronym used to describe the key elements of an organisation’s externa
l environment? A B C d PERT PEST SWOT SPAM (2 marks)
2
Henry Mintzberg categorised five basic components of an organisation. Which tWo
the following statements describes the work of the technostructure of an organis
ation? 1 designing systems 2 organising and controlling work 3 Standardising wor
k 4 Securing inputs A B C d 1 and 2 1 and 3 2 and 3 3 and 4 (2 marks)
3
Which of the following is a correct definition of the term ‘span of control’? A
B C d The number of employees reporting to one manager The number of managers to
whom one employee reports The number of levels in the hierarchy The number of e
mployees at each level of the organisation (2 marks)
Syllabus section 2 effective management of business and accounting systems 4 to
whom is the internal auditor accountable? A B C d The directors of the company T
he employees of the company The shareholders of the company The external auditor
s of the company (2 marks)
2
5
SPAMSOAP is a mnemonic for the types of internal control employed by an organisa
tion. Which tWo of the following are types of internal control included in SpAmS
oAp? 1 output 2 Arithmetic 3 preventative 4 physical A B C d 1 and 2 1 and 3 2 a
nd 3 2 and 4 (2 marks)
6
Which of the following are typical responsibilities of the financial accountant
in a large organisation? 1 inventory valuation 2 Sales invoicing 3 project appra
isal 4 payroll A B C d 1 and 2 2 and 4 1 and 4 3 and 4 (2 marks)
Syllabus section 3 management theory, principles and techniques 7 Who was respon
sible for developing the ‘Situational leadership’ model? A B C d Blake and Mouto
n Katz and Kahn Hersey and Blanchard Tannenbaum and Schmidt (2 marks)
8
Which of the following statements accurately describes a multi-disciplinary team
? A B C d All team members collaboratively decide how to organise their work All
team members have different skills and specialisms which they pool All team mem
bers can perform any and all of the group’s tasks All team members are jointly r
esponsible for the leadership of the team (2 marks)
3
9
Which tWo of the following are examples of content theories of motivation? 1 mas
low’s hierarchy of needs 2 Vroom’s expectancy theory 3 herzberg’s two factor the
ory 4 Adam’s equity theory A B C d 1 and 2 2 and 4 3 and 3 1 and 3 (2 marks)
Syllabus section 4 individual effectiveness at work 10 Which tWo of the followin
g are examples of ‘on the job’ training 1 formal training courses 2 mentoring by
a colleague 3 Self study courses 4 Secondments to other departments A B C d 1 a
nd 2 2 and 3 3 and 4 2 and 4 (2 marks)
11 if a manager in the purchasing department requests the help of the human reso
urces director in preparing for a difficult appraisal, what direction is the com
munication flow? A B C d Vertical Horizontal Lateral Diagonal (2 marks)
12 Honey and Mumford classified four different learning styles. Which of the fol
lowing statements accurately describes the reflector? A B C d Prefers to underst
and principles Prefers to think things through first Prefers to try things ‘hand
s on’ Prefers to see practical examples (2 marks)
end of Sample questions
4
Answers
5
Sample multiple Choice question paper t5 managing people and Systems 1 2 3 4 5 6
7 8 9 B B A A D B C B D
Answers
10 D 11 D 12 B
6
Managing People and Systems
ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION ADVANCED LEVEL FRIDAY 11 JUNE 2
004
QUESTION PAPER Time allowed 2 hours ALL FIVE questions are compulsory and MUST b
e answered
Do not open this paper until instructed by the supervisor This question paper mu
st not be removed from the examination hall
The Association of Chartered Certified Accountants
Paper T5
Section A – ALL FIVE questions are compulsory and MUST be attempted 1 Organisati
ons can be described as open systems, interacting with a variety of different st
akeholders in an ever changing environment. Required: (a) Explain what you under
stand by the term ‘stakeholders’. (2 marks)
(b) Identify and describe three key stakeholders of an organisation and briefly
explain their relationship with the organisation. (6 marks) (c) Identify and bri
efly explain the key external environmental influences which might impact on any
organisation and its stakeholders. (6 marks) (d) Give examples of how any two o
f the influences you have described in part (c) might impact on your organisatio
n, or an organisation with which you are familiar. (6 marks) (20 marks)
2
You have been asked to undertake a review of how the purchasing of stationery an
d computer consumables is undertaken within your organisation, or one with which
you are familiar, with a view to controlling the process more effectively. Requ
ired: (a) Identify and explain the key stages in the purchasing cycle that you m
ight expect to see when undertaking this review. (8 marks) (b) Make recommendati
ons to your manager about the type of controls which could be implemented at thr
ee of the stages you have identified above. (12 marks) (20 marks)
3
Effective team working is an increasingly important aspect of organisational lif
e. Required: (a) Outline the key characteristics/features of effective teams. (8
marks)
(b) Identify and explain the key stages of group development as identified by Tu
ckman. Your explanation should (12 marks) include reference to the role of the g
roup leader at each stage. (20 marks)
4
You have been asked by your manager to write instructions for a new member of st
aff who is taking up their first appointment since leaving college. Required: (a
) Write a memo to the new member of staff which identifies and explains how to u
se three different approaches (10 marks) to personal work planning. (b) Explain
the main techniques and tools the new member of staff could use to help them man
age their time as effectively as possible. (10 marks) (20 marks)
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5
The International Labour Organisation estimates that each year, more than two mi
llion people die of work related accidents and illnesses. Required: (a) Outline
the role of training in raising awareness of health and safety issues. (8 marks)
(b) Describe the respective roles and responsibilities of senior management, the
supervisor and the individual in promoting health and safety within the organis
ation. (12 marks) (20 marks)
End of Question Paper
Answers
ACCA Certified Accounting Technician Examination – Paper T5 Managing People and
Systems
June 2004 Answers
1
(a)
A stakeholder is someone who has the ability to influence an organisation and ca
n in turn be influenced by it. Stakeholders can also be considered as those indi
viduals who depend on the organisation in some way and on whom in turn, the orga
nisation depends e.g. shareholders. Stakeholders have varying degrees of power a
nd can vary in importance to the organisation depending on this power and their
ability and desire to use it. Stakeholders can be individuals or groups of indiv
iduals, in which case they would be referred to as a coalition. Key stakeholders
of an organisation are: shareholders, employees, customers, suppliers and the l
ocal community. Shareholders are the owners of the firm and a source of finance
and in some cases expertise. Organisations need to satisfy the expectations of t
he shareholders. These expectations may be a requirement for the payment of a di
vidend which shows a satisfactory return on investment, or they may be in terms
of the survival and growth of the firm. Employees at all levels are important st
akeholders. They provide the firm with the knowledge, skills and expertise to me
et the requirements of the owners. In turn, the organisation rewards them approp
riately through remuneration packages and opportunities for career and personal
development. Customers are important stakeholders in that they transact with the
organisation for whatever goods or services it is providing. The organisation n
eeds to respond to the needs of customers in terms of the types of products and
services they expect to be able to purchase or receive in order to retain custom
er loyalty. Suppliers are an important stakeholder in that they provide the good
s and services needed by an organisation to carry out its business. Suppliers ex
pect to be treated fairly and equitably at all stages of the purchasing cycle e.
g. to be given as much information as possible when preparing a quotation; to be
paid as per the agreed terms of payment. The organisation needs to be a good ci
tizen within the local community. It takes from the community in terms of labour
and resources and has the potential to give back to the community in terms of i
ts support for local projects and also providing incomes for those that it emplo
ys. The key environmental influences which might impact on an organisation and i
ts stakeholders can be examined using a PESTEL analysis. This is a mnemonic for
the following key factors, all of which can be considered regionally, nationally
or internationally. Some of these factors may overlap and can be considered in
more than one category. (i) (ii) Political e.g. government policies on imports a
nd exports; Economic e.g. tax changes, interest rates, exchange rates;
(b)
(c)
(iii) Social e.g. changing age profiles, increased incidence of overseas travel,
increasingly diverse work groups; (iv) Technological e.g. impact of the interne
t, developments in mobile communications technology; (v) Environmental e.g. issu
es associated with the production of genetically modified food, powerful lobby g
roups;
(vi) Legal e.g. legislation affecting employment, health and safety legislation.
(d) Considering a medium sized manufacturing firm, selling its products in inte
rnational markets as the example, two influences which might impact on this orga
nisation are technological and economic. (i) Technological. Factors such as the
technology available to help the firm communicate more effectively with its cust
omers e.g. e-mail and the use of websites, or developing process technologies wh
ich might require them to make capital investments in new equipment in order to
keep up with competitors. Economic. Factors such as potential changes in governm
ent policies with regard to exporting to the countries where they do business, o
r changes which may enable them to open up new markets. Factors such as exchange
rates which will affect the price of their goods overseas and of any supplies b
eing purchased from international sources.
(ii)
This is a very general example, indicative of the depth of answer required for t
his part of the question. Students will choose examples from their own organisat
ions and markers will need to use their professional judgement as to the appropr
iateness of the factors that are chosen.
2
(a)
The purchasing cycle is considered to begin when a specific need for goods or se
rvices is identified and ends when the need has been met and payment has been ma
de. The various stages in this cycle will vary depending on the nature of the it
em being purchased, the size and structure of the organisation and also the posi
tion which purchasing holds within the organisation. Typically, purchasing syste
ms within any purchasing cycle can be grouped into four main headings: Originati
ng Sourcing Ordering Completing The key stages in the purchasing cycle that one
might expect to see in any review of a purchasing system are as follows: Origina
ting Identification of need Preparation of authorised requisition Link to approp
riate budget Sourcing Request for quotation (RFQ) sent to approved suppliers Quo
tations received and analysed Negotiation (if appropriate) and mutual agreement
on price, delivery and all commercial terms and conditions Most appropriate supp
lier selected Ordering Purchase order issued Purchase order acknowledged Complet
ing Delivery takes place/work completed Invoice received Invoice checked Payment
made Performance evaluation/supplier appraisal and review
(b)
Stationery and computer consumables are frequent, but usually considered to be r
elatively minor, purchases within organisations – nevertheless, given the nature
of these items it is important that their purchase is effectively managed and c
ontrolled. Recommendations about the type of controls at each of these stages co
uld be as follows: Originating Typical checks would ascertain that a legitimate
signatory had authorised the purchase requisition and that he/she was not exceed
ing authorised spend levels. The originator of the requisition should not have a
ny involvement in the checking of the requisition in accordance with the princip
le of segregation of duties associated with task execution and control. Other ch
ecks would include quantity details and delivery address. Sourcing Typical check
s would ensure that only approved suppliers were sent the RFQ and that all suppl
iers on the approved supplier list had been duly audited and appraised. All pote
ntial suppliers should receive the same information. There should be clear crite
ria for the evaluation of quotations to ensure that suppliers are compared and e
valuated objectively. Selected suppliers must meet predetermined criteria. Order
ing Typical checks would ensure that only authorised purchase orders are issued
by authorised individuals up to agreed amounts. All acknowledgements should be c
arefully checked for accuracy against the purchase and any discrepancies raised
with the supplier for correction. Completing Typical checks would ensure that th
e invoice value and the order value match and that payment is then made in accor
dance with the agreed terms of payment. Throughout all of the above it is import
ant that wherever possible there is a segregation of duties and responsibilities
. One individual should not be in a position to record and process a complete tr
ansaction.
3
(a)
There are many definitions of teams and groups. A team as defined by Katzenbach
and Smith (1993) ‘is a small number of people with complementary skills who are
committed to a common purpose, performance goals and approach for which they hol
d themselves mutually accountable’. According to Mullins (1999) the underlying f
eature of an effective team or work group is ‘a spirit of cooperation in which m
embers work well together as a united team’ This is apparent when: (i) (ii) (iii
) (iv) (v) (vi) (vii) (viii) (ix) Group members have a belief in shared aims and
objectives Members show a sense of commitment to the group Members accept group
values and norms There is a feeling of mutual trust and dependency There is ful
l participation in decision making Decision making is by consensus There is a fr
ee flow of information and open communications Disagreements can be aired and re
solved Conflicts are resolved by members themselves
(b)
The key stages of group development as identified by Tuckman are forming, stormi
ng, norming and performing. Later writers added two stages to Tuckman’s model –
dorming and mourning/adjourning. (i) Forming – the initial formation of the grou
p. Group members get to know one another and test out behaviours to find out wha
t is acceptable to other group members and to find out the nature of the situati
on and the task. Each member wishes to impress his or her personality on the gro
up. The leader generally acts as a facilitator – helping people to get to know o
ne another and also to understand collectively the nature of the task. The leade
r has a concern for both task and team but at this early stage of team developme
nt is more likely to focus on team issues. Group members tend to be very depende
nt on the leader. Storming – characterised by a lack of unity and the emergence
of open conflict as members have now got to know one another better and are prep
ared to put forward ideas. If the team is developing effectively this can be a v
ery productive phase as more realistic targets are often set and trust between t
eam members increases. The leader tries to resolve any conflicts that may arise
and as a consequence is often much more heavily involved with team issues rather
than task issues. Because of the dominant role that the leader often needs to t
ake at this stage it is likely that there may be resistance to the leader from o
ther group members.
(ii)
(iii) Norming – a general understanding of one’s own role and the role of others
. A sense of unity develops as the group ‘settles down’. Differences are accommo
dated. Group cohesion develops and there is mutual support and cooperation. The
group acquires a sense of identity. The leader is no longer required to facilita
te team processes and resolve conflict and the leadership role changes to one of
being much more focused on the task. This involves the leader in coordinating a
ctivities and tasks to ensure that the work is completed and the overall team ob
jectives can be met. (iv) Performing – interpersonal problems are resolved and t
he team begin to focus on the task in hand and how to achieve their goal. The le
adership role is much less in evidence at this stage of development as all team
members including the leader are focused on completing the task and achieving th
e agreed objectives. The leader is likely to merge with the rest of the group. (
v) Dorming – once a group has been performing well for some time, it may become
complacent and fall back into selfmaintenance functions, at the expense of the t
ask. The role of the leader would be one of trying to keep the group focused on
the task, but this is sometimes difficult, or indeed may not happen, as the lead
er has merged with the rest of the group at the previous stage.
(vi) Mourning/Adjourning – the group sees itself as having fulfilled its purpose
. This can be a stage of confusion, sadness and anxiety as the group disbands an
d breaks up. There is evaluation of its achievements and gradual withdrawal of g
roup members. The leader can be important in the evaluation of the group’s perfo
rmance. If the group is to continue and go on to a new task – it will need to re
negotiate aims and roles and will return to the forming stage and the group will
once again be very dependent on the leader.
4
(a)
The following should be set out in the form of a memo as per the requirements of
the question. There are a number of approaches to personal work planning that y
ou might find useful including producing lists, prioritising and scheduling. In
addition to these main approaches there are a number of other techniques that yo
u might include e.g. diaries and timetables and a variety of charts. (i) Produci
ng lists – these are useful ways of identifying and remembering what needs to be
done and of monitoring the progress you have made with your daily workload or a
set of specific tasks. It is usually best to make a list at the start of a day
or at the start of a project. Try to stick to the list you have made and don’t g
et involved with things that are not on your list. If necessary add them to your
list. Prioritising – this is about deciding which aspects of your work, or whic
h specific tasks areas are more important than others. Some aspects of your work
will need prompt attention whereas others can often wait. Important or essentia
l work needs to be given a higher priority than other work. A piece of work or t
ask is usually considered high priority if it has to be completed by a certain t
ime or if other tasks or people depend on it.
(ii)
(iii) Scheduling – is about planning and controlling priorities and deadlines. A
schedule establishes a timescale for a logical sequence of tasks. Scheduling in
volves making sure that everyone is aware of the schedule in good time. The sche
dule should be realistic in terms of the time allocated for each task. It is imp
ortant to be able to make allowances for any unexpected events and to revisit th
e schedule if necessary. (iv) Action plans – set out a programme of work or acti
on. (v) Timetables – the information you have for your action plan or from your
diary might be formatted as a timetable for ease of reference.
(vi) Charts – these are useful for longer term schedules and again, make activit
ies easier to see – especially in relation to each other. (vii) Gantt charts – a
re used to display progress and to show the amount of time allocated to a partic
ular task. (viii) Diaries – like timetables these are to remind you of key event
s and activities, remind you of any advance planning that needs to be undertaken
or any follow up actions and to help you coordinate your efforts more effective
ly. There is potential for some overlap in the responses to part (a) and part (b
) of the question depending on the approach taken by the student. Should any of
the latter points included in the suggested answer to part (a) above, also be in
cluded in part (b) of a student response – this should be rewarded accordingly.
(b) There are a number of things to bear in mind when trying to manage your time
effectively. Firstly it is important to recognise that your use of time can be
affected by the nature of the job you are doing, by your own personality and als
o by your colleagues and how they influence you and place demands upon you. When
planning your time you will need to identify your key tasks – those tasks that
are most relevant to achieving your objectives. This is like sorting out what yo
u must do, what you could do and what you would like to do. Once you have identi
fied your key tasks you need to prioritise these in terms of their importance, t
he time needed to complete them and against any deadlines or specific time spans
. Once you have prioritised you can then schedule your work, or set out a timeta
ble for completion. It is sometimes helpful to assign start and end times to tas
ks. It is important to include ways of controlling your time and the plans you h
ave made for using it effectively. This means that you will need to minimise dis
ruption by unexpected events and requests. It is also important to monitor how y
ou actually use your time – keep a note of how you spent your time and how valua
ble you think time spent on specific activities was. Also make a note of typical
interruptions so that you can develop strategies for either avoiding these or d
ealing with them as effectively as possible if they cannot be avoided.
5
(a)
Training has a key role to play in the area of health and safety and can be seen
as an important preventative measure. Health and safety training should be an i
mportant aspect of an induction programme for all new members of staff. They sho
uld be advised of their own responsibilities and those of their colleagues and t
he organisation. Attention should be drawn to particular hazards or safety issue
s associated with the specific industry in which they are working, within their
workplace or within the specific context of their own particular work environmen
t. Training should also take place following a transfer to a new job or departme
nt or following any relocation or change in working methods. Refresher training
should take place at regular intervals. Special courses should be arranged whene
ver new equipment or changes to working methods or processes are introduced. For
mal training can be reinforced in many ways including the use of notice boards,
electronic bulletin boards and staff handbooks. Roles of senior management, the
supervisor and the individual (i) Senior management is responsible for developin
g and implementing policies and can ensure that appropriate procedures are in pl
ace for carrying out risk assessments and safety audits. Management can also ens
ure that a coordinated approach to health and safety issues is maintained across
the organisation. They also have a duty to monitor and evaluate health and safe
ty and for taking any necessary corrective action. Supervisors – can have most i
nfluence as they are in immediate control of a situation and are usually in a po
sition to take immediate action. They need to be vigilant and safety conscious a
t all times. They are also directly responsible for ensuring that individuals ar
e conscious of health and safety hazards and do not take unnecessary risks. Supe
rvisors are likely to be responsible for maintaining and updating any safety man
uals and notices in conjunction with HR departments. They should ensure that all
employees under their supervision are aware of things like fire exits and locat
ion of fire extinguishers, safety equipment and of the named first aider in the
area.
(b)
(ii)
(iii) Individuals – should be aware of safe working practices. Individuals have
a responsibility for their own safety and for that of their fellow workers. They
should carry out instructions associated with maintaining health and safety e.g
. the wearing of protective clothing, or the use of safety guards when operating
machinery. Individuals should ensure that they are up to date with the location
of fire exits and fire extinguishers, safety equipment and of the named first a
ider in the area.
Systems 1 (a) (b)
June 2004 Marking Scheme (2 marks) (3 marks) (3 marks)
2 marks for a clearly articulated definition, including reference to power, infl
uence and dependency. 1 mark for each identified stakeholder. 1 mark per brief e
xplanation and their relationship with the organisation.
(c) (d)
1 mark for each influence identified and one for a brief explanation up to a max
imum of 2 marks per influence. (6 marks) 3 marks for each appropriate example. (
6 marks) (Total 20 marks)
2
(a) (b)
2 marks for each stage identified and explained up to a maximum of 8 marks.
(8 marks)
2 marks each for each type of control identified and two marks for each type of
control explained at each of the three stages nominated by the student, up to a
maximum of 4 marks per stage. (12 marks) (Total 20 marks)
3
(a) (b)
1 mark for each characteristic or feature identified – up to a maximum of 8. 0.5
marks for each of the stages identified, up to a maximum of 2 marks 1.5 marks f
or offering explanation about each of the stages, up to a maximum of 6 marks. 1
mark for appropriate reference to the role of the leader at each stage, up to a
maximum of 4 marks.
(8 marks) (2 marks) (6 marks) (4 marks) (Total 20 marks)
4
(a)
0.5 marks for each approach identified.
(1.5 marks)
2.5 marks for outlining how to use each of any three approaches effectively up t
o a maximum of 7.5 marks (2.5 x 3). (7.5 marks) 1 mark for using the correct for
mat as identified in the question i.e. a memo. (1 mark)
(b)
2 marks for each main technique or tool explained up to maximum of 10 marks.
(10 marks) (Total 20 marks)
5
(a) (b)
1 mark for each point identified up to a maximum of 8 marks.
(8 marks)
1 mark each for identifying the key roles and responsibilities within each of th
e three categories up to a maximum of 4 marks within each category. (12 marks) (
Total 20 marks)
ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION ADVANCED LEVEL FRIDAY 10 DECEMB
ER 2004
e answered
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 The accounting functio
n is one of several key functions within an organisation, all of which integrate
to ensure that the organisation is able to deliver its products or services as
efficiently and effectively as possible. Required: (a) Explain the purpose of th
e accounting function within an organisation and identify and briefly describe h
ow it interacts with ANY TWO OTHER functional areas. (8 marks) (b) Identify and
describe the key factors which might affect the type of accounting system used w
ithin an organisation. (6 marks) (c) Explain how you would expect the accounting
function to be affected if the organisation has its operations in a number of d
ifferent countries. (6 marks) (20 marks)
2
Effective management control systems are an essential feature of all organisatio
ns. Required: (a) Identify and briefly describe the features of a good internal
control system. (b) Outline the major limitations of internal control systems. (
8 marks) (4 marks)
(c) Explain how the limitations of internal controls identified in part (b) abov
e might be overcome, using (8 marks) examples. (20 marks)
3
An understanding of organisational culture is important because it can explain m
uch of what happens in organisations and can also provide insights into how orga
nisational effectiveness might be improved. Required: (a) Explain what you under
stand by the term ‘organisation culture’. (4 marks)
(b) Charles Handy’s classification identifies four distinct cultural types. Iden
tify these four types and fully explain any two of these. (10 marks) (c) Identif
y and describe any two factors which might influence the development of an organ
isation’s culture. (6 marks) (20 marks)
4
Ineffective communication is frequently cited as being a major contributor to po
or performance within organisations. Required: (a) Distinguish between formal an
d informal methods of communication used within organisations. (b) Explain the a
dvantages and disadvantages of formal communications. (c) Explain the advantages
and disadvantages of informal communications. (8 marks) (6 marks) (6 marks) (20
marks)
5
All employees, at whatever level, have a responsibility not only for their own s
afety in the workplace, but also for those around them. Required: (a) Identify a
nd describe typical activities in which accidents might happen or where there ma
y be risk or potential danger to employees. (10 marks) (b) What advice would you
give to a new employee to enable them to minimise their exposure to safety haza
rds and risks in the workplace, thereby ensuring as safe a working environment a
s possible? (10 marks) (20 marks)
Answers
Systems 1 (a)
December 2004 Answers
The purpose of the accounting function is to make sure that all of the organisat
ion’s business transactions are recorded and processed accurately and securely a
nd that the relevant information about business transactions is made available t
o management and appropriate external authorities as required. The accounting fu
nction interacts with a number of different departments. Some of these and the t
ypes of interactions which might take place are as follows: senior management re
questing information provided by the accounting function via different types of
reports; personnel or HR departments in terms of wages and salaries; the purchas
ing department who will authorise invoices for payment and require suppliers to
be paid and all purchase ledger transactions; the sales department regarding pay
ments received and any bad debts and all sales ledger transactions; the stores d
epartments in terms of stock movements and stock control issues.
(b)
The key factors which might affect the type of accounting system used within an
organisation are the type and size of organisation, organisation structure and r
egulations – both internal and external. A small organisation like a local gener
al grocery store will have a relatively simple accounting system compared to a l
arge multi-national organisation operating in a number of different sites with a
larger range of products and services. Service businesses (such as a solicitor’
s practice) will need accounting systems which enable them to record time spent
on particular jobs or with particular clients whereas a manufacturing organisati
on will need to account for units of sales and will need to monitor the costs as
sociated with the provision of raw materials and the supply of labour needed in
the manufacturing process. Organisations operating in the public sector will be
concerned with recording revenues and the monitoring of expenditure. The organis
ation structure will determine whether or not accounts are prepared on an area b
asis by area staff or the extent to which accounting staff are in a separate dep
artment. Internal and external regulations are an important factor affecting the
accounting systems. Many businesses set out their own accounting rules and proc
edures and some aim to achieve external verification of their quality processes.
In addition, accounting work has to comply with a range of external regulations
and appropriate procedures need to be in place to ensure that the organisation
complies with these as required. There are a number of ways in which the account
ing function might be affected if the firm operates in a variety of different co
untries. Doing business in different currencies will present issues of recording
information and reporting information, for example customers might want to pay
in local currency but the business might have to pay for imported supplies in a
different currency – this will need to be recorded carefully. Comparison between
different parts of the business may be difficult and it may be necessary to con
vert to a single currency to facilitate this. There may be different legal, taxa
tion and accounting requirements in different countries and this will determine
how accounting information is prepared and reported. Differing economic conditio
ns raise issues about accounting for inflation – especially when dealing with th
ose countries that have very high levels of inflation.
(c)
2
(a)
An internal control system seeks to ensure that an organisation achieves its obj
ectives and guards against the risks which may threaten its existence. The chara
cteristics of a good control system are that it should be acceptable to those it
serves; appropriate to the needs of the organisation; matched to the capabiliti
es of those that use it; accessible to non-experts or functional specialists; ad
aptable and capable of change if necessary; action oriented (i.e. should prompt
corrective action) and affordable in terms of the overall cost for the benefits
gained. In terms of appropriateness this means that it should be fit for purpose
– neither overly complex nor unduly simple; it should be capable of effectively
controlling the specific transactions relevant to the business for which it has
been designed. In terms of accessibility it should be of use to a variety of or
ganisation members outside the accounting function – it should be easy to use an
d understand and it should provide concise and relevant information to those tha
t need it. It is important that any control system is capable of change in today
’s business environment. All organisations need to be able to respond to change
and the internal control system should be able to accommodate the circumstances
and environment in which the organisation is operating, such that business trans
actions continue to be controlled effectively and appropriate and timely informa
tion is provided. It is important that the internal control system is action ori
ented and does not exist for its own sake. This means that it needs to highlight
areas where action needs to be taken or changes made and should encourage proac
tive as well as reactive management responses. Finally it should be affordable,
this means that it should not be overly time consuming for those that need to wo
rk with it nor should it unnecessarily duplicate areas of work or information pr
ovided or required. The overall costs of operating and maintaining the internal
control system effectively should not outweigh the benefits that it provides to
the organisation. The major limitations of an internal control system are associ
ated with the human element necessary to ensure that they are applied properly a
nd honestly. Internal controls rely on the honesty and integrity of those that a
pply them and if people are dishonest and wish to avoid them, there are ways in
which they can do so. For example, managers can override the controls they have
set up themselves or abuse authorisation controls. People can work together to a
buse those controls through dishonest collusion. Also the warnings given by cont
rol systems may not be acted upon because of complacency or ignorance. Segregati
on of duties is concerned with separating executive tasks from control tasks. On
e individual should not be able to record and process a complete transaction. A
simple example of this is highlighted when considering the recording and banking
of cash. Cash may be received by the organisation through the post; it will nee
d to be recorded as received and then at some point taken to the bank. It would
not be good practice for these activities and duties to be performed by the same
(b)
(c)
person – the duties need to be segregated. If they are not segregated there is a
n opportunity for a dishonest person to receive the cash, fail to record its rec
eipt and then keep the cash without anyone else being aware that any cash had ev
er been received into the business. This can be partially overcome by ensuring c
areful employee selection procedures, by checking references, by clear guideline
s set out at induction and ongoing training and staff development. In addition,
both internal and external audits can be used to demonstrate how some of these l
imitations can be exposed. Clear and heavy sanctions should be in place for use
in any instances of dishonesty and collusion leading to the abuse of any interna
l control systems. Control systems should be continually reviewed for the releva
nce of their procedures and messages and staff reminded of the risks which they
seek to guard against.
3
(a)
There are many different definitions of culture, some examples are as follows: ‘
the collection of traditions, values, policies, beliefs and attitudes that const
itute a pervasive context for everything we do and think in an organisation’ (Mc
Lean and Marshall); ‘the pattern of basic assumptions that a given group has inv
ented, discovered or developed in learning to cope with its problems of external
adaptation and internal integration’ (Edgar Schein). Culture then can be seen t
o be a collection of the organisation’s past achievements, current ambitions, at
titudes, values and assumptions. More simply it is often described as ‘the way w
e do things around here’. Culture gives an organisation a sense of identity. The
formal culture of the organisation is often seen as the ‘party line’. All defin
itions and explanations of culture emphasise that it is concerned with abstract
concepts and themes like values and norms and as such it is difficult to articul
ate and often difficult to recognise. Charles Handy’s classification is based on
Harrison’s ‘organisation ideologies’. Handy used the word culture as opposed to
ideology as it was perceived to convey a feeling of deep seated and more pervas
ive way of doing things. His four types are: the power/club culture, the role cu
lture, the task culture, and the person culture. The power/club culture is depen
dent on a central power source which controls the organisation. The rays of infl
uence emanate from the centre and hence there is little need for formal rules an
d procedures. The organisation relies on interpersonal relationships and communi
cations rather than hierarchy and power structures. It is typically found in sma
ll entrepreneurial firms, small family firms and small businesses controlled by
the owner/manager. As the organisation increases in size this culture is less ev
ident as the powerful rays of influence cease to reach all members of the organi
sation and there then becomes a need for more formality which comes with the int
roduction of systems and procedures. The role culture is typified by large burea
ucratic organisations. Work is controlled by procedures and rules. Power is asso
ciated with positions and not people. It is based on order and rationality. The
role culture is often represented diagrammatically as a Greek temple, with the p
illars representing the functional specialisms within the organisation, all of w
hich are controlled centrally by the senior managers. In addition to the strengt
h of the functional ‘pillars’ the role culture needs a stable external environme
nt to survive. The task culture reflects a team approach to getting a job comple
ted. It often consists of people who solve problems in teams or specially formed
work groups. Each person makes a contribution based on their own area of expert
ise and shares this with the team or group for the overall benefit of the task i
n hand. Status and job titles are not considered to be important in the task cul
ture – the overall objective is to ensure that the job or task or project is sat
isfactorily completed. Influence is based on expert power rather than on positio
n or personal power. Often, the team or group will be disbanded once the job or
project is completed. Controlling can be difficult in this culture and is usuall
y achieved by senior management through the appropriate allocation of tasks, peo
ple and resources. A task culture thrives in organisations that are faced with f
requent changes, as they are good at adapting and problem solving. The person cu
lture exists to serve the individuals within the organisation and is one of the
most unusual in Handy’s typology. All rules and procedures within the organisati
on exist to meet the needs of the individuals within it and can be changed as th
ose needs change. A good example of a person culture would be that which might e
xist in a small professional business e.g. solicitors’ or dentists’ partnerships
. There are many factors which might affect the way in which an organisation cul
ture develops. These include, but are not necessarily limited to: the history of
the organisation, the overall purpose of the organisation, the technology emplo
yed by the organisation, organisation size, location, the leaders and key decisi
on makers in the organisation and the overall operating environment. The history
of the organisation can be important in shaping the organisation culture becaus
e this will reflect the way in which the organisation was originally formed and
also any key events in its development e.g. a merger or a takeover or a change i
n overall focus of the organisation. The overall purpose of the organisation and
its goals and objectives influence the culture in that this will include the ty
pes of markets that the firm operates in, the type of products or services it of
fers and the types of customers it engages with. The key technology employed by
the organisation can be important in influencing culture because this will deter
mine ways of working and interacting with others. The organisation size can be i
mportant because this will determine the degree of formality and bureaucracy wit
hin the organisation and also the communication processes. The location of the o
rganisation can be important. For example a firm situated in a busy city centre
may face different issues in terms of staffing, types of customers etc than one
located on a purpose built business park. The leaders and key decision makers ca
n be important influences on culture and their own style or way of doing things
is often reflected in the organisation as a whole. People identify with visionar
y leaders and often treat them as role models for their own behaviour. Finally,
the overall operating environment is important because it can determine the rate
of change that the organisation needs to deal with or the degree of uncertainty
within the environment. Issues of stability and dynamism are important aspects
of the external environment which might affect the overall culture of an organis
ation.
(b)
(c)
4
(a)
All organisations are likely to use some combination of formal and informal comm
unications. Formal communication channels and systems are usually set up by mana
gement within the organisation and would include regular meetings, formal presen
tations and conferences where both written and verbal information can be present
ed. These will be considered to be legitimate forms of communication and will be
sanctioned by the organisation i.e. they will be officially recognised by the o
rganisation. The larger the organisation, the more likely it is to have more for
mal communication channels and systems. Informal communication channels are much
less structured and would include informal telephone conversations, discussions
in the staff canteen or any other form of informal contact with colleagues, sup
ervisors and managers. Informal communications usually take place outside of the
more formal organisation structures and processes that have been set up by mana
gement. Some of the advantages of formal communication are that they are recogni
sed by all members of the organisation, they form part of the overall command an
d control structure of the organisation, they are based on legitimate and accept
ed power bases within the organisation; they provide effective co-ordinating mec
hanisms, they provide records and evidence of points of agreement and disagreeme
nt and of decisions made, they are transparent and available for all. However, t
here are also disadvantages to formal communications and some of these are as fo
llows: they can be time consuming and involve an unnecessary amount of people; t
hey may act merely as a ‘rubber stamp’ for issues and procedures that have been
agreed informally; they can become unwieldy. The advantages of informal communic
ations are that they are more flexible and responsive, they permit speedier deci
sionmaking, they permit all members of the organisation to contribute and partic
ipate, and they can identify issues of concern within the organisation. The disa
dvantages include the fact that they may conflict with the formal communication
system and recipients may receive mixed messages; they may be used subversively,
they may be biased and inconsistent, they may encourage rumours, or they may le
ad to too much information being available and cease to be effective co-ordinati
ng mechanisms.
(b)
(c)
5
(a)
There are many activities which are undertaken in the workplace which can give r
ise to hazards and risks and where accidents can easily happen. Whilst many of t
he ones that you are likely to come across will be in the office environment, th
ere are a variety of other situations that you may need to be aware of, e.g. tho
se that might occur in a manufacturing environment. The broad range of activitie
s which might give rise to hazards and risks include, but are not limited to, th
e following: General maintenance of building and fabric – involving use of ladde
rs or roof work where there is potential for people to fall from high buildings
or constructions. Using certain types of equipment e.g. VDUs where there is pote
ntial for eyestrain or repetitive strain injury associated with the continued us
e of a keyboard or a mouse. Using badly designed workspaces and office accommoda
tion, where posture may be affected or there is potential for falls or tripping
over electrical or computer connections; or where light is inappropriate. Using
electricity, hand tools or extension leads where there is potential for electric
shock or physical harm if using the equipment incorrectly. Carrying and/or lift
ing equipment which might lead to muscle strain or damage to the spine if not ca
rried out correctly. Receiving raw materials – involving lifting or carrying, ag
ain having the potential to cause muscle damage or damage to the spine. Stacking
or storing material – there may be falling materials. Moving material – using f
orklift trucks or lifting equipment. Operating machinery, where it is important
that appropriate guards and shields are correctly deployed and where it is impor
tant to operate the machine within specified operational limits in terms of spee
d, or running time. Not wearing protective clothing and equipment for example ea
r defenders, safety glasses, protective footwear or using appropriate barrier cr
eams when using certain substances. Dealing with emergencies, this is especially
important as it is when dealing with emergency situations that standard procedu
res and ways of working are often inadvertently ignored or forgotten.
(b)
All new employees should attend any health and safety training offered as part o
f their induction programme and employees should be encouraged to update their k
nowledge and the information provided on a regular basis. This can be done by at
tending further training or by reading notice boards or any safety bulletins whi
ch may be issued. They should be fully aware of any procedures associated with e
vacuation in the event of accidents or fire and this will include familiarisatio
n with the location of fire escapes, fire extinguishers and any other safety equ
ipment. They should make themselves aware of the nominated first aider in their
area. They should be aware of any specific hazards associated with the nature of
their work i.e. exposure to substances hazardous to health, unsafe operating pr
actices, potential dangers when using machinery and lifting equipment and the po
ssible hazards of using computers. They should wear protective clothing if neces
sary e.g. gloves, eye shields or ear defenders and ensure that they adopt safe s
eating positions and avoid repetitive strain injuries by having adequate and reg
ular breaks from work stations during the working day. These measures should be
provided and promoted by the organisation as necessary but all employees have a
responsibility to ensure that they are made available and appropriately used.
Systems 1 (a)
December 2004 Marking Scheme
2 marks for a clear explanation which includes reference to recording, processin
g and providing information. 1/2 mark for identifying key functional areas up to
a maximum of 2 marks. 2 marks for each brief description of how the accounting
function interacts with both functions identified up to a maximum of 4 marks.
1/ 2
8 marks
(b)
a mark for each factor identified up to a maximum of 2 marks. 1 mark each for ap
propriate description and explanation of key factors up to a maximum of 4 marks.
1·5 marks for each area explained up to a maximum of 6 marks.
6 marks 6 marks Total 20 marks
(c)
2
(a)
1 mark for identifying specific features up to a maximum of 4 marks. 1 mark each
for a brief description of those identified up to a maximum of 4 marks. 1 mark
for each limitation up to a maximum of 4 marks. 2 marks for each brief discussio
n of how these might be overcome, up to a maximum of 4 marks. 2 marks each for a
n appropriate and clearly explained example, up to a maximum of 4 marks.
8 marks 4 marks
(b) (c)
8 marks Total 20 marks
3
(a)
1 mark for a clearly articulated and well written definition of culture and 1/2
a mark for including any of the following points in an explanation (up to a maxi
mum of 3 marks): values, assumptions, norms, ‘way we do things around here’, bel
iefs, attitudes, shared expectations, shared goals.
1/ 2
4 marks
(b)
mark for each type identified, up to a maximum of 2 marks. 4 marks each for a fu
ll explanation of any 2 of the 4 types identified. Explanation should include bu
t not necessarily be limited to inclusion of typical type of environment, degree
of flexibility, ability to cope with change, type of structure, sources of powe
r, control mechanisms, inclusion of examples etc. 1 mark for each factor identif
ied. 2 marks for appropriate description of factors identified.
(c)
4
(a) (b) (c)
4 marks each for a clear explanation of formal and informal communications. 2 ma
rks for each advantage and disadvantage identified up to a maximum of 6 marks. 2
marks for each advantage and disadvantage identified up to a maximum of 6 marks
.
8 marks 6 marks 6 marks Total 20 marks
5
(a)
1 mark each for identifying typical activities up to a maximum of 5 marks. 1 mar
k each for brief description of activities identified and for the use of simple
examples, up to a maximum of 5 marks. 2 marks for each piece of appropriate advi
ce offered.
(b)
005
e answered
Paper T5
Section A – ALL FIVE questions are compulsory and MUST be attempted 1 Organisati
on structures are the framework for getting work done efficiently and effectivel
y. Businesses are organised and structured in a variety of different ways and as
well as ‘tall’ or ‘flat’ structures, a matrix structure is adopted by some orga
nisations. Required: (a) What do you understand by the term ‘matrix structure’?
(b) Identify and briefly explain four key advantages of a matrix structure. (c)
Identify and briefly explain four key disadvantages of a matrix structure. (4 ma
rks) (8 marks) (8 marks) (20 marks)
2
Legislation requires that the accounts of a public limited company must be audit
ed. Required: (a) Explain the role of an external auditor. (3 marks)
(b) What is the purpose of the external auditor’s report and what would you expe
ct to be included in it? (8 marks) (c) What are the three main differences betwe
en the internal and the external auditor? (9 marks) (20 marks)
3
Henri Fayol was a key contributor to the classical view of management and identi
fied five functions of management which apply to any organisation. These are pla
nning, organising, commanding, coordinating and controlling. Required: (a) What
are the key characteristics of the classical view of management? (b) Fully expla
in what is involved in any two of Fayol’s five functions. (10 marks) (10 marks)
(20 marks)
4
Conflict in organisations is often considered to be inevitable and can have posi
tive as well as negative outcomes. Required: (a) Identify and explain the key so
urces of conflict in organisations. (12 marks)
(b) Explain the win-win approach to resolving conflict and contrast this approac
h with win-lose and lose-lose approaches. (8 marks) (20 marks)
5
Data in the workplace is potentially at risk of security breaches. It can be dam
aged, lost or stolen in the same way that equipment and valuables can. Required:
(a) Outline and briefly explain the potential risks to data held in organisatio
ns, including data that is held or transmitted electronically. (10 marks) (b) Id
entify ways in which the risks to data identified in (a) can be reduced or avoid
ed. (10 marks) (20 marks)
Answers
Systems
June 2005 Answers
1
(a)
A matrix structure is likely to be found in contracting, research and developmen
t and consultancy and essentially ‘crosses’ functional and product/project organ
isation so that staff in different functional or regional departments are respon
sible to both their department manager and also to a product or project manager.
They are responsible to their departmental or functional manager for activities
specific to the department or function and to the project manager for activitie
s specifically relating to the product or project. Typically, staff from various
disciplines are assigned to projects. While engaged on the project individuals
will be responsible on a day-to-day basis to the project leader but will continu
e to be functionally responsible to the head of their department. The key advant
ages of a matrix structure are: it enables the organisation to quickly assemble
teams consisting of people with the most appropriate expertise and experience; i
t allows speed of response and flexibility; it provides a variety of experiences
to team members; it supports inter-disciplinary co-operation and multi-function
al working; it develops tolerance of ambiguity; it encourages team members to se
e the broader picture rather than over focus on their own specific department or
functional area; it encourages greater market and customer awareness, it brings
conflicts out into the open. The key disadvantages of a matrix structure are: i
t can be fragmented; it can be difficult to develop and maintain commitment to t
he organisation; it requires individuals to be responsible to two bosses simulta
neously; it needs careful planning; it can lack continuity; it can lead to compe
tition and conflict between managers; staff can have conflicting demands; decisi
on making can be slower.
(b)
(c)
2
(a)
The external auditor is usually a firm of chartered or certified accountants who
se role is to undertake an independent examination of the financial statements o
f an organisation and to express an opinion on those financial statements. If th
e organisation is a limited company, external audit means statutory audit, under
for example the Companies Act 1985 in the UK. The purpose of the external audit
or’s report is to summarise their conclusions on the company’s financial stateme
nts to the shareholders. The report must state whether in the auditor’s opinion:
– The balance sheet is a true and fair view of the financial state of affairs o
f the company at the end of the financial year. The words true and fair are gene
rally used together rather than separately and the term is generally considered
to mean ‘reasonably accurate and free from bias or distortion’ – The profit and
loss account or income statement gives a true and fair view of the financial per
formance of the company for the financial year being audited. – The financial st
atements have been properly prepared in accordance with Companies Act 1985, or o
ther similar legislation. There are three main differences between the internal
and the external auditor: – Appointment. External auditors are appointed by the
shareholders and must be independent of the company whereas internal auditors ar
e employees of the organisation – Responsibility. External auditors are responsi
ble to the owners, who can be shareholders, the public or parliament whereas int
ernal auditors are responsible to senior management – Objectives. The objectives
for external auditors are defined by law whereas those for internal auditors ar
e set by management and the audit process is a key part of evaluating the effect
iveness of the management control system in the light of risks identified.
(b)
(c)
3
(a)
The classical theorists were primarily concerned with the maintenance of control
from the top of an organisation. They wrote at a time when relatively little wa
s understood about the ways in which organisation design can affect human motiva
tion and about the human relations aspects of management and work organisation.
The classical school of management held the view that there were universal princ
iples that can be applied to all organisations. Management was seen as a matter
of controlling resources and processes rather than people. Classical theory focu
ses on the efficient structuring of organisations. Henri Fayol was one of the mo
st influential classical theorists – a French industrialist who pioneered ideas
about how organisations might best be structured – he advocated that there shoul
d be division of labour i.e. the practice of dividing work into specialised task
s that enable people to specialise in what they do best. Other important element
s of the classical school were the ideas of limited spans of control (i.e. numbe
r of direct subordinates) – typically a limit of three to six were recommended a
nd also that there should be a limited number of hierarchical levels. Spans of c
ontrol were to be limited so that it was possible to retain adequate supervisory
control over subordinates, sufficient communication with them and adequate coor
dination between their activities. A restricted number of hierarchical levels we
re advocated so that loss of control down a hierarchy and any dilution of instru
ctions before they reached the required level were minimised. Planning involves
working out, in broad outline, the things that need to be done and the methods f
or doing them to accomplish the overall purpose set for the organisation. This i
nvolves setting objectives and the procedures for ensuring that the objectives a
re achieved. This can be for the whole organisation or for a part of it. Organis
ing involves setting up and staffing the most appropriate form of organisation t
o achieve its overall aims and objectives. This will include grouping task and a
ctivities into jobs for individuals and groups, creating groups of jobs into sec
tions and departments and delegating authority to carry out jobs. Commanding inv
olves giving instructions to others to carry out tasks where the manager has
(b)
authority over decisions and responsibility for performance. This also involves
exercising leadership to motivate people to work together to the best of their a
bility as part of a team. Coordinating involves harmonising the activities of in
dividuals and groups within the organisation and integrating various parts of th
e work. Controlling involves measuring, monitoring and correcting, as necessary,
the progress of work in relation to the overall plan – this will include the ac
tivities of individuals and groups. 4 (a) Conflict takes place in organisations
because they function by means of adjustments and compromises. People’s views of
ten conflict because individuals and teams have their own goals, interests and p
riorities which may not always be compatible. In addition there can be personali
ty clashes. Conflict can arise when there is change because change may be seen a
s a threat to be challenged or resisted. Power and resources in organisations ar
e limited and people compete for them - this can also lead to conflict. There ma
y also be differences and incompatibilities of work methods, timescales and work
ing style so that individuals or teams frustrate each other with apparent lack o
f co-ordination. Poor communication can often lead to conflict. This approach su
ggests that there are three basic ways in which a conflict or problem can be wor
ked out: win-lose, lose-lose or win-win. Firstly, win-lose – this is quite commo
n and describes a situation where one party gets what it wants at the expense of
the other party. Secondly, lose-lose – this describes a situation where neither
party gets what it really wanted - in essence a poor compromise. This is often
a common outcome to resolving conflict. Thirdly, win-win – this is not necessari
ly common but working towards it often leads to the best solution. It describes
a situation where both parties get as close as possible to what they really want
. It is critical to this approach to fully understand what both parties really w
ant, and what they really don’t mind giving up. The main risks to data are as fo
llows: (i) (ii) human error – individuals can lose, damage or incorrectly input
or store data; technical problems – data can be lost or corrupted when equipment
fails;
(b)
5
(a)
(iii) catastrophic events such as natural disasters or accidents such as fire or
burst pipes can break or destroy data storage and transmission facilities; (iv)
malicious damage by individuals inside or outside the organisation who delibera
tely attempt to damage or tamper with data; (v) industrial espionage or sabotage
by individuals who deliberately attempt to steal or damage data and information
from the organisation with a view to commercial gain;
(vi) dishonesty by those who may wish to access information for personal gain; (
vii) when data is transmitted over a network or a telecommunications line, espec
ially the internet, there may be additional specific security dangers which aris
e because the data is carried by third party carriers and is outside the direct
control of the organisation; (viii) additional dangers include the following: co
rruptions from viruses, the possibility of inadvertently overwriting someone els
e’s data, unauthorised individuals being able to access parts of the network, ri
sks from hackers, the downloading of inaccurate or imperfect information or info
rmation being intercepted leading to loss of service; (ix) in addition to the ab
ove, all organisations have a responsibility to ensure that data is adequately p
rotected against any breaches of confidentiality. (b) There are a number of ways
in which the risks to data identified above can be minimised. Risks of human er
ror can be reduced by checks and controls, systematic procedures, ongoing employ
ee training and also appropriate supervision. Rigorous recruitment and selection
procedures go some way to ensuring that staff employed are honest and trustwort
hy and will not engage in malicious acts or any form of espionage. Risk of malic
ious damage can also be minimised by controlling access, both physically (using
locks and security checks) and electronically (using passwords, encryption of da
ta, anti-virus software etc). Risks of disaster are difficult to foresee, but co
ntingency plans may be made, including off-site back-up storage of files, emerge
ncy power generators and adequate insurance for any loss or damage to data and a
ssociated systems. Organisations should take care to ensure that paper files or
computer disks are not left where they are generally accessible. Safes, strongbo
xes and filing cabinets should be locked when not in use. Passwords should be us
ed where advised and should not be shared. Confidential information should not b
e copied or transmitted without specific authorisation and appropriate security
measures. It is important to ensure that appropriate communication channels are
selected to protect data where necessary. Back-up systems are important to minim
ise the risks associated with data held electronically. E-mail, intranets and th
e Internet mean that computer systems are increasingly connected over telecommun
ications lines and these are rarely completely secure. Use of passwords and user
profiles make an important contribution to minimising risk. A password is a uniq
ue code a person uses to enter the system. For a password system to be effective
, passwords should be changed regularly, difficult to guess, confidential and hi
dden. A user profile in a networked system only allows certain people access to
certain files. Records can be kept of access to files, so that a trail can be le
ft of unauthorised attempts at entry. Despite passwords and user profiles, exper
t hackers may still be able to enter the system. Keeping track of any attempts m
ade can alert managers to repeated attempts to break into the system or of any e
merging patterns. Use of anti-virus software which can detect and eradicate viru
ses is an important way to minimise risks to electronic data. Latest upgrades sh
ould be used to ensure that any new viruses could be dealt with. Organisations m
ust also guard against the introduction of unauthorised software to their system
s as many viruses are spread on pirated versions of popular software. Any disks
received from outside should be checked to ensure that they are virus free. Syst
ems should also make use of firewalls to ensure the safety and security of their
data.
Systems
June 2005 Marking Scheme
1
(a) (b) (c)
4 marks for clear explanation of matrix structure 2 marks for each advantage up
to a maximum of 2 marks for each disadvantage up to a maximum of
2
(a) (b) (c)
3 marks for a clear explanation of the role 2 marks for the purpose of the repor
t. 2 marks for each item included up to a maximum of 3 marks for each difference
identified up to a maximum of
3
(a) (b)
10 marks for clear explanation of classical management, to include control issue
s, spans of control, hierarchy, universal rules, top down, and consideration of
human aspects. 5 marks for each full explanation of any two functions.
4
(a) (b)
2 marks per valid point made about each source of conflict identified up to a ma
ximum of 3 marks for clear description of win-win, 2·5 marks for contrast with w
in-lose, 2·5 marks for contrast with lose-lose.
5
(a) (b)
2 marks per valid point made about each potential risk identified and explained
up to a maximum of 2 marks per valid point made about each method of minimising
risk explained up to a maximum of
ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION ADVANCED LEVEL FRIDAY 9 DECEMBE
R 2005
e answered
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 Planning is an importa
nt business process and can be critical to an organisation’s success. Required:
(a) Give two reasons why business planning is important to managers in organisat
ions. (b) Explain two main differences between strategic planning and tactical p
lanning. (4 marks) (4 marks)
(c) Identify and briefly describe four elements that you might expect to see in
an organisation’s human resource plan. (12 marks) (20 marks)
2
All business and accounting systems require formal controls if they are to be us
eful and effective within an organisation: the payroll system is one example. Re
quired: (a) Explain the purpose of a payroll system. (2 marks)
(b) What information relating to individual employees would you expect to be hel
d on a payroll file? (6 marks) (c) Identify and explain four key controls relati
ng to wages and salaries. (12 marks) (20 marks)
3
Delegation of authority is the process whereby a superior devolves to the subord
inate part of his or her own authority to make decisions. Required: (a) Give thr
ee reasons why a manager or supervisor might delegate some of their authority to
their subordinates. (6 marks) (b) What factors should a manager or supervisor t
ake into account when deciding whether or not to delegate? (6 marks) (c) Briefly
give four reasons why many managers and supervisors are reluctant to delegate.
(8 marks) (20 marks)
4
One of the main purposes of an effective appraisal system is to improve individu
al and organisational performance. Required: (a) Identify the four key stages of
the appraisal interview process. (4 marks)
(b) Provide a full explanation of the kind of activities and actions you would e
xpect to take place at any two of the stages you have identified in part (a) abo
ve. (8 marks) (c) Identify and explain two potential disadvantages of an apprais
al scheme. (8 marks) (20 marks)
5
Security aims to prevent others from illegally accessing, stealing and damaging
the property of an organisation and/or the people who work in it. Required: (a)
Identify and explain the three basic principles of effective security. (b) Provi
de two examples of who or what might be particularly at risk in a business organ
isation. (c) Provide two examples of particular locations within an organisation
that might be at risk. (12 marks) (4 marks) (4 marks) (20 marks)
Answers
Systems 1 (a)
If individuals and groups within organisations are to be effective in working fo
r the achievement of the organisation’s objectives, they need to know what it is
they are expected to do. Planning is important to managers because it enables t
hem to identify the objectives for which they are responsible, enables them to o
rganise how to achieve them and then helps them to measure if they are being suc
cessful in achieving those objectives. Strategic planning involves making decisi
ons about what business the organisation should be in and what its overall objec
tives should be. Strategic planning is long term and considers where the busines
s wants to be in two to three years time – longer in some cases. This involves a
consideration of environmental factors, current and potential competitors, decl
ining and emerging markets, possible technological change, etc. Strategic planni
ng deals with many variables and a high level of uncertainty. The strategic plan
is likely to be amended in the light of new developments. Tactical planning inv
olves making decisions about how an organisation should go about achieving the o
verall objectives determined by the strategic plan. Tactical planning considers
a much shorter time period, for instance a year, and decides what needs to be do
ne within that year to implement the strategic plan. At this level, planning wil
l involve deciding upon expansion targets, market penetration, asset purchases,
financing requirements and any improvements which need to be made to efficiency.
The human resource plan of an organisation is prepared on the basis of the anal
ysis of its future human resource and skills requirements. Depending on the orga
nisation’s requirements and the availability of skills within the organisation w
hich can be developed or deployed, the human resource plan could include the fol
lowing elements: (i) (ii) Recruitment plan – which considers the numbers and typ
es of people/skills and when these are required, along with a target recruitment
programme for both internal and external appointments. Training and development
plan – which considers the skills needing to be developed, the number of traine
es required and also programmes for retraining if appropriate.
(b)
(c)
(iii) Succession plan – which includes programmes for identification and develop
ment of individuals for promotion and plans for replacements for key management
posts. (iv) Productivity plan – which considers programmes for improving product
ivity or reducing staffing costs and also develops productivity targets. (v) Ret
ention plan – which identifies the actions necessary to reduce avoidable staff t
urnover or wastage and includes a review of working terms and conditions.
(vi) Redundancy plan – which considers policies for selection and timing of redu
ndancies, timetable for union consultation if appropriate and budgets for redund
ancy payments. (vii) Reward plan – which considers salary structure and plans fo
r merit or performance related pay and also salary rises over time.
2
(a)
The purpose of a payroll system is to compute the gross and net wages and salari
es of all employees, to produce payslips, cheques and/or listings sent to banks
instructing them to make payments and to account for all statutory and non-statu
tory deductions. Payroll files will consist of an individual record for each emp
loyee which includes both standing and variable (sometimes called transactional)
data. Standing data will include personal details e.g. name, employee number, j
ob grade, address etc as well as the rate of pay for the employee, details of an
y deductions, their tax code and their holiday entitlement. Variable or transact
ional data will include gross pay to date, tax to date and pension contributions
if applicable. The four main aims of any control system relating to a payroll s
ystem are concerned with the following areas: (i) (ii) Setting of wages and sala
ries. This includes ensuring that employees are only paid for work that they hav
e done and that gross pay has been calculated correctly and appropriately author
ised. Recording of wages and salaries. This includes making sure that gross and
net pay and deductions are accurately recorded on the payroll; that the wages an
d salaries actually paid are recorded correctly in the bank and cash records and
general ledger.
(b)
(c)
(iii) Payment of wages and salaries. This means ensuring that the correct employ
ees are paid. (iv) Deductions. This includes making sure that the statutory and
non-statutory deductions have been calculated correctly and are authorised and t
hat the correct amounts are paid to the taxation authorities (and also into pens
ion schemes if appropriate).
3
(a)
Managers and supervisors might need to delegate authority for a number of reason
s, including the following. There are physical and mental limitations to the wor
kload of any one individual in authority and it may be necessary to delegate to
ensure that the workload can be effectively managed. Managers and supervisors ma
y wish to delegate in order that they are free to concentrate on the aspects of
their work which only they are competent to do (e.g. detailed planning or aspect
s of budgeting). The increasing size and complexity of many of today’s organisat
ions demands increasing specialisation and effective delegation is one way of de
veloping this. Managers also need to consider that delegation provide subordinat
es with development opportunities. The decision of whether or not it is appropri
ate to delegate authority is an important one and there are a number of factors
which may need to be taken into consideration. It is always important that autho
rity resides where it is best placed to be exercised effectively. The manager or
supervisor will need to be confident that the subordinate has the necessary exp
erience and expertise to undertake the task. The manager will also need to trust
the reliability and competence of the subordinate to undertake the task or make
the decision. The task or decision should be within the capability of the subor
dinate and he or she must be consulted and be prepared to accept it. Many manage
rs and supervisors are reluctant to delegate and attempt to do many routine task
s themselves as well as more important ones. Some of the reasons for this might
be as follows: (i) (ii) They may have low confidence and trust in the abilities
of their staff; They may believe that they are the only one capable of doing the
task properly;
(b)
(c)
(iii) They may wish to keep enjoyable parts of the job to themselves; (iv) Some
managers feel more powerful by retaining their decision making privileges; (v) T
hey may fear that their subordinates will use the authority poorly;
(vi) They may not wish to take on the additional burden of being accountable for
any mistakes that their subordinates might make while executing the task; (vii)
They may believe that their subordinates do not wish to have broader decision m
aking responsibilities; (viii) They may wish to ‘stay in touch’ with the departm
ent or team and feel that any act of delegation removes them from the day to day
activities; (ix) They may feel threatened and be unwilling to admit that assist
ants have developed to the extent that they could perform some of the manager’s
duties. They may feel threatened by this sense of redundancy. (x) There may be p
oor control and communication in the organisation so that the manager feels he h
as to do everything himself in order to retain control and responsibility for th
e tasks;
(xi) There may be an organisational culture which has failed in the past to reco
gnise and reward effective delegation. In this climate the manager may feel that
delegation is seen as shirking responsibility; (xii) There may be a lack of und
erstanding about what delegation involves; (xiii) There may be a lack of trainin
g and development of managers in the skills needed for effective delegation; (xi
v) Managers and supervisors may have had poor experiences of delegating to other
s.
4
(a)
The four key stages of an appraisal interview are: prior preparation, the interv
iew itself, gaining commitment and follow up actions. There are a number of acti
vities and actions that might take place at each of the four stages. (i) Prior p
reparation. At the preparation stage it is important that the appraiser ensures
that the time and place planned for the interview are appropriate and that there
will be no interruptions. The appraiser should ensure that he/she has all of th
e information needed to be able to conduct the interview effectively e.g. he/she
should review the employee’s history and any previously agreed targets or objec
tives. Other sources of feedback should be consulted if necessary e.g. liaison w
ith other work teams or consultation with other department managers if the appra
isee has been involved in more than one area of the business. Finally it is impo
rtant that the appraisee is given time to prepare and to undertake their own sel
f-appraisal before the interview and to gather any information that they may nee
d. The interview itself. It is important that the interview is seen as a two way
process and exchange. The appraiser must be able to demonstrate effective liste
ning skills. The employee should be encouraged to share views freely and to revi
ew his/her work performance objectively and honestly. Any problems or developmen
t needs should be identified.
(b)
(ii)
(iii) Gain commitment. At this stage it is important to agree a plan of action t
hat both parties can agree and commit to. There may be actions for both parties
and it is important that these are recorded accurately. Usually at this stage al
l of the associated appraisal documentation is completed and development plans a
re put in place. (iv) Follow up. This is an important stage of the appraisal int
erview process and involves making sure that any agreed actions are carried out
and that progress is monitored. It also involves making sure that both parties a
re kept informed of progress.
(c)
There can be many reasons why the outcomes of an appraisal system are not satisf
actory, including the following. There can be uncertainty, lack of clarity and l
ack of a shared understanding regarding the overall objectives of the appraisal
system. Sometimes appraisals are seen as confrontational or as an opportunity to
tackle major problems which have not been dealt with effectively in the past. T
his means that the overall purpose and objective of the appraisal is not achieve
d and people do not approach the appraisal with a positive attitude. In these ci
rcumstances the outcomes are not always satisfactory e.g. it is not always possi
ble to reach agreement on performance levels or to get objective feedback. Feedb
ack at an appraisal is often delivered badly, the appraisal may be based on most
recent performance and not on the whole year and there can be a lack of attenti
on to the development needs of the employee. Sometimes appraisal can be seen as
a one sided process, where the interview provides an opportunity for the manager
to sit in judgement on the employee. This can lead to the employee feeling thre
atened and he/she is put on the defensive. In some cases, the introduction of an
appraisal system can lead to increased labour turnover. Appraisal can sometimes
be seen as nothing more than an informal, friendly chat with no real purpose or
outcome. Some managers may be embarrassed by the need to give feedback and may
do so inappropriately. In some organisations, the appraisal system is over burea
ucratic and involves a great deal of form filling. This can lead to it being see
n only as a form filling exercise, with no real outcomes. In some cases, organis
ations do not allocate sufficient resources to the appraisal system; this means
that development needs might be identified but cannot be fulfilled. The underlyi
ng purpose of the appraisal, to improve individual and organisational performanc
e, can be overlooked.
5
(a)
The three basic principles of security are delay, checking and alarm. Delay mean
s providing appropriate lines of defence before vulnerable areas and items can b
e reached. This could include some or all of the following: making sure that out
er doors to the main building are securely locked and bolted, ensuring that ther
e is a secure, staffed reception area for visitors, ensuring that all offices ar
e locked and where appropriate, guarded, by making sure that filing cabinets are
lockable and are kept locked when not in use and finally by providing safes. Th
e second principle of security is checking – this means having appropriate proce
dures for authorised access to vulnerable areas or items. This could include som
e or all of the following: making sure that authorised staff can be clearly iden
tified either by a uniform or an identity badge, (preferably showing a photograp
h), by ensuring that all visitors are checked in, escorted while they are on the
premises and checked out on departure, by always ensuring that any unauthorised
visitors on the premises are challenged, by the use of personal pass words or s
wipe cards to gain authorised access to different parts of the organisation and
finally by seeking appropriate authorisation before access to files can be allow
ed. The third principle of effective security is alarm. This means making sure t
hat there are adequate procedures for alerting those responsible for responding
to security breaches. This could include some or all of the following: ensuring
that buildings are fitted with electronic security alarms and by carefully contr
olling access to entry codes, by training all individuals in the organisation to
be alert to potential security breaches and to be aware of the procedures for r
eporting them and through ensuring that computer systems have the ability to war
n of any unauthorised attempts to access files. Internal security is also import
ant and organisations should ensure that they have effective recruitment, select
ion and screening systems for all staff and security staff in particular.
(b)
Items that are valuable, portable and easily saleable are particular security ri
sks in an organisation, for example small equipment such as computers, printers,
video and television equipment; vehicles or office furniture. Documentation suc
h as ownership documents e.g. share certificates or title deeds and cash and che
ques are also vulnerable. Other vulnerable items include security devices like p
ass cards and keys or information stored in portable form e.g. paper files, flop
py discs and CD Roms. The types of people who might be at particular risk in an
organisation are: front line security staff e.g. security guards and reception s
taff, staff with custody of important assets e.g. counter staff in banks. Key pe
rsonnel may also be at risk of intimidation for the purposes of obtaining cash,
assets or security codes. The following are some of the most vulnerable areas or
locations in an organisation: all public or open areas (such as entrances, hall
ways, parking areas, toilets, stairways and lifts), especially if they are unatt
ended, all points of entry and exit (doors, windows, gates and lifts), all unatt
ended areas (store rooms), unlit areas, and reception areas. Points of transit o
r storage outside the organisation’s premises can also be a source of security r
isk e.g. valuable items may be taken out of the office e.g. cash for banking, pr
oducts for delivery, laptop computers for working at home. Finally any areas whe
re at-risk items and data might be concentrated also pose a security risk e.g. s
tore rooms, computer rooms, offices, file stores etc – especially if they are lo
cated near points of entry or exit or busy public areas.
(c)
Systems 1 (a) (b) (c) 2 marks for each reason given. 2 marks for each difference
explained.
December 2005 Marking Scheme 4 marks 4 marks 12 marks Total 20 marks
1 mark for each element identified and a further 2 marks for each element subseq
uently explained.
2
(a) (b) (c)
2 marks for a clear explanation of the purpose. 1 mark for each item of informat
ion included up to a maximum of 6 marks. 1 mark for each aim identified up to 4
marks and a further 2 marks for each aim appropriately explained.
3
(a) (b) (c)
2 marks for each reason given. 1 mark for each factor identified up to a maximum
of 6 marks. 2 marks for each reason identified up to a maximum of 8 marks.
4
(a) (b) (c)
1 mark for each stage identified. 4 marks for each full explanation. 1 mark for
each reason identified and further 3 marks for the explanation of each reason.
5
(a)
1 mark for each principle identified up to a maximum of 3 marks and a further 3
marks for an explanation of each of the three principles. 2 marks for each examp
le provided. 2 marks for each example provided
(b) (c)
06
e answered
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 Every organisation int
eracts with its external environment. Required: (a) Identify four external envir
onmental influences which can affect any organisation. (8 marks)
(b) Explain fully, with the use of examples, how any two of those external influ
ences identified in part (a) above, might affect your own organisation, or one w
ith which you are familiar. (12 marks) (20 marks)
2
Management information is used for a wide variety of purposes. Three main functi
ons of management where management information can be useful are planning, contr
ol and decision-making. Required: (a) Explain how management information can ass
ist in each of the three areas identified above. (b) Identify and describe four
key internal sources of management information. (12 marks) (8 marks) (20 marks)
3
Robert Blake and Jane Mouton carried out research (The Ohio State Leadership Stu
dies) into managerial behaviour and developed a grid to explain their findings.
Required: (a) What are the two essential dimensions of Blake and Mouton’s manage
rial grid? (b) Identify and explain any two of the styles of management shown in
the grid. (c) Identify and briefly explain two practical applications of the gr
id. (4 marks) (10 marks) (6 marks) (20 marks)
4
Communication underpins everything you do at work. Effective communication is a
two way process and is often shown as a cycle. Required: (a) Explain, with the a
id of a diagram, the communication process/cycle. (b) Identify four barriers to
effective communication. (c) Identify four ways in which management could improv
e communication in an organisation. (8 marks) (4 marks) (8 marks) (20 marks)
5
The International Labour Organisation (ILO) has never accepted that disease and
injury are an inevitable part of working life. Required: (a) Identify four reaso
ns why health and safety should be important to all organisations. (b) What resp
onsibilities do individuals have to ensure a healthy and safe working environmen
t? (c) What responsibilities do organisations have to ensure a healthy and safe
working environment? (4 marks) (8 marks) (8 marks) (20 marks)
Answers
Systems
June 2006 Answers
1
(a) (b)
Any four of the following might be identified: political, economic, sociocultura
l, technological, ecological, legal, demographic. Answers will vary depending on
which two factors candidates chose to explain more fully and also on the type o
f employing organisation and the examples used. (i) Political – government polic
y affects the whole economy and governments are responsible for creating and mai
ntaining a stable framework in which business can be done. The quality of govern
ment policy is important in providing physical, social and market infrastructure
s. Businesses operating internationally need to satisfy themselves that the poli
tical environment in any countries in which they may wish to operate is satisfac
tory. Other political factors include government stability, taxation policy, for
eign trade polices and social welfare policies. Economic – the economic environm
ent is an important influence at local and national level. It will include overa
ll growth or fall in gross domestic product which will have an impact on the dem
and for goods and services. An understanding of local trends e.g. types of indus
try in the area, office/factory rents, labour rate and house prices will be impo
rtant for firms wishing to invest in an area or seeking to relocate their busine
ss. Inflation can have an impact on business decisions – often wage inflation co
mpensates for price inflation. Interest rates determine how much it costs to bor
row money – some businesses carry a high level of debt – or may wish to borrow f
unds in order to undertake a major investment. Other economic factors include: g
eneral business cycles, money supply, unemployment, and disposable income.
(ii)
(iii) Sociocultural – this embraces a number of areas including demographics (se
e below) and also the implications of technology on working patterns. There is n
ow a greater emphasis on work–life balance issues and this can impact on employm
ent polices and approaches to managing work. The increased incidence of out of t
own supermarkets and retail centres in some countries has implications for town
centre developments and transportation links. Other sociocultural factors includ
e income distribution, social mobility, lifestyle changes, consumerism and level
s of education. (iv) Technological – technology enables new products and process
es to be developed as well as affecting the ways in which some services can be p
rovided e.g. companies selling easily transportable goods like books and CDs are
having increasing success over the internet. Technology can also affect the way
in which some firms are managed through better communication methods or by enab
ling home working. The education sector has been affected by the growing use of
internet technology over the past few years – some course materials for students
are now available electronically and some of these enable interaction with tuto
rs and with other students; lectures can be delivered via video links to multipl
e audiences simultaneously. This has implications for the skills and resources r
equired by organisations who are in the business of education and training. Othe
r technological factors include government spending on research, speed of techno
logy transfer and rates of product and process obsolescence. (v) Ecological/Ethi
cal – this is a growing area and will include approaches to waste disposal, poll
ution, energy consumption and corporate social responsibility (CSR) issues withi
n the supply chain. New markets for products and services are opening up in this
area and new industries are developing to serve these. This kind of development
could be important for a company which manufactures and supplies traditional pa
ckaging products which may be required to modify their manufacturing processes o
r material used to ensure that the end products can be disposed of appropriately
. Similarly, an organisation which undertakes manufacturing in a low labour cost
country will need to satisfy itself that the employment conditions of the emplo
yees is satisfactory and does not contravene any legal requirements. With the in
creasing emphasis on the CSR agenda, this is becoming an important business issu
e for many organisations.
(vi) Legal – the legal environment is often included in a discussion of the poli
tical environment as it is within this environment that laws are made. However,
for many organisations, the legal or regulatory framework within which they oper
ate is so important that it is considered as a separate and distinct category. L
egal factors include: the overall general legal framework which will determine t
he basic ways of doing business, ownership issues, right and responsibilities; h
ealth and safety, data protection issues, environmental considerations like poll
ution control, and waste disposal and specific laws surrounding tax payments or
competition law dealing with cartels and price fixing. Some legal and regulatory
factors will affect particular industries, particularly if the public interest
is served – for example, in the UK there are specific regulations which influenc
e price and market access in the areas of electricity, gas, telecommunications,
water and rail transport. (vii) Demographic – this is often included as part of
the social environment, but for some organisations it is often a crucial issue a
nd is worthy of separate consideration. Some important demographic factors are:
growth (or decline) of national population, changes in the age distribution of t
he population, concentration of population into certain geographical areas, ethn
icity, household and family structure, employment trends and increases or decrea
ses in the overall standard of living. An example of the effect of a demographic
factor would be an organisation which specialises in the provision of services
to the elderly: in the UK, demographic shifts have led to an increasingly ageing
population and this can have a major impact on the resources that the organisat
ion might need to enable them to continue to offer an appropriate level of servi
ce to this group.
2
(a)
Three main functions of management where management information can be useful ar
e as follows: (i) Planning: management needs to decide what the objectives of th
e company are and how they can be achieved. Management information is used to he
lp management to plan the resources that a business will require and how they wi
ll be used. Control: once management puts a plan of action into operation, there
needs to be some control over the business’s activities to make sure that they
are carrying out the original plans.
(ii)
(iii) Decision-making: management at all levels within an organisation takes dec
isions. Decision-making always involves a choice between alternatives. It is the
role of the management accountant to provide information so that management can
reach an informed decision. Management information is also needed for pricing,
valuing stock, assessing profitability and deciding on the purchase of capital a
ssets. (b) Primary sources of management information include sales invoices and
purchase invoices. These also provide information for the financial accounts of
a company. In many organisations this information will be keyed into a computer
system and will be coded so that information can be provided in the specific cat
egories required. For example, if the organisation is divided into different bus
iness units, information about costs and income must be coded to the correct bus
iness unit. In a factory which makes different products, raw materials must be c
oded to the product which uses them. Errors in coding will lead to inaccurate in
formation which may have an impact on management planning, control and decision-
making. Other sources of information may include reports from various department
s of the organisation including: timesheets, employee and wages and salary infor
mation from the human resources department; goods received notes and materials r
equisition notes from the warehouse; and price lists (in-house and also supplier
s).
3
(a)
Blake and Mouton carried out research into managerial behaviour and observed two
basic dimensions of leadership: (1) concern for production (or task performance
) and (2) concern for people. Along each of these two dimensions managers could
be located at any point on a continuum from very low concern to a very high conc
ern. Blake and Mouton observed that the two concerns did not seem to correlate e
ither positively or negatively – for example a high concern in one dimension did
not seem to imply a high or low concern in the other dimension. Individual mana
gers could reflect varying degrees of concern for people or concern for task. Th
e five styles of management can be seen on the grid which follows. This plots a
manager’s style in terms of concern for people and concern for production. The m
anagerial grid High 9 8 7 Concern for people 6 5 4 3 2 1 Low 1 Low 2 3 4 5 6 7 C
oncern for production 8 9 High 1.1 (impoverished) (task) 9.1 5.5 (middle road) 1
.9 (country club) (team) 9.9
(b)
(i)
(9:9) – the ‘team management style’ this combines deep concern for people with a
clear concern for production. This is a high performance manager who achieves h
igh work achievements through ‘leading’ committed people who identify themselves
with organisational aims. (1:9) – the ‘country club management style’, this man
ager is too concerned with people and often gets very little work done. The mana
ger is very attentive to staff needs and has developed satisfying relationships.
However, little attention is paid to achieving results.
(ii)
(iii) (9:1) – ‘task management style’, this is too concerned with production and
creates an atmosphere of low morale. This approach shows almost total concentra
tion on achieving results. People’s needs are virtually ignored.
(iv) (1:1) – ‘impoverished management style’, – this has no concern for either p
eople or output. (v) (5:5) – ‘middle-of–the-road management style’, (sometimes a
lso referred to as the dampened pendulum), this shows some concern for people an
d some concern for production. The manager adopting this style will achieve adeq
uate performance through balancing the necessity to get results while maintainin
g the morale of people at a satisfactory level.
There are a number of practical applications of the managerial grid. These inclu
de: (i) (ii) (iii) (iv) As a training aid As a management development tool As pa
rt of an appraisal Enables managers to reflect on and assess the appropriateness
of their own management style in different situations and circumstances.
4
(a)
Communication is the transmission and exchange of information and is a two way p
rocess. Signals or messages are sent by the communicator and received by the oth
er party who sends back some form of confirmation that the message has been rece
ived and understood. Encoding and decoding are important elements within the com
munication process/cycle; words are merely the symbols or ‘stand-ins’ for your i
deas and intentions in communicating. In other situations, a gesture, pictures,
symbols or numbers will be the most appropriate to use. Whatever codes are used,
it is important that they are understood by both parties. Feedback is another i
mportant element in the communications cycle. It is the reaction of the receiver
that indicates to the sender that the message has (or has not) been received an
d enables him or her to assess whether the message has been understood and corre
ctly interpreted. Feedback can range from a smile or a nod to a blank look or a
shrug of the shoulders. Feedback can also range from the desired action being ta
ken to no action, or the wrong action, being taken. The communications process/c
ycle is often represented diagrammatically as follows: CHANNEL
SENDER Information Ideas Attitudes Needs
ENCODED MESSAGE (words, symbols, sounds, gestures etc)
MEDIUM Letter Poster Discussion Etc
DECODED MESSAGE (Information. ideas, attitudes, needs)
RECEIVER Under-standing of message and/or response required

(phone line, postal services, noticeboard, interviews etc) FEEDBACK Message rece
ived and understood?
(b)
There can be many barriers to effective communication including the following (i
) Distortion – this is the term used for a process through which the meaning of
a message is lost in the coding or decoding stages. Misunderstandings may arise
from technical or ambiguous language, misinterpretation of symbols and tones of
voice. Noise – this refers to general interference in the environment of communi
cation which prevents the message getting through clearly. This might be physica
l noise e.g. passing traffic or machinery operation, technical noise e.g. a bad
internet connection or a poor telephone line, social noise e.g. differences in p
ersonalities, status or education or psychological noise e.g. anger, stress or p
rejudice which can distort what is heard.
(ii)
(iii) Misunderstandings, due to lack of clarity or poor explanation. (iv) Non-ve
rbal signs e.g. gestures or facial expressions which contradict the verbal messa
ge. (v) Failure to give feedback.
(vi) Overload – a person being given too much information to digest in the time
available. (vii) People only hearing what they want to hear- i.e. being selectiv
e in how they receive the message. (viii) Differences in social, cultural or edu
cational background. (ix) Poor communication skills on the part of either the se
nder or the recipient or both.
(c)
There are many ways in which the communication system in an organsation could be
improved. Depending on the problem, some measures might be as follows: (i) Enco
urage, facilitate and reward effective communication. Status and functional barr
iers can be minimised by improving opportunities for formal and informal network
ing and feedback. This means creating a culture where effective communication ca
n take place. Give training and guidance in basic communication skills, includin
g consideration of recipients, listening and giving feedback.
(ii)
(iii) Minimise the potential for misunderstanding. Make people aware of the diff
erences in culture and perception and teach them to consider others’ viewpoints.
(iv) Adapt technology systems and procedures to make communication easier; maki
ng it more effective through clear mobile phone reception for example or by maki
ng it faster by providing laptops for e-mailing instructions or decisions, makin
g it more consistent through regular reporting routines and making it more effic
ient through reporting by exception. (v) Manage conflict and politics in the org
anisation so that no basic unwillingness exists between business units or depart
ments.
(vi) Establish communication channels and mechanisms in all directions; regular
staff or briefing meetings, in-house newsletters or journals. Upward communicati
ng should be particularly encouraged, using mechanisms such as internal meetings
, suggestion schemes, open door access to managers and regular performance feedb
ack sessions. (vii) Communication is generally improved when interpersonal trust
exists – especially between subordinates and superiors. This is achieved in a v
ariety of ways and will depend very much on the management style of the manager,
on the attitudes and personality of the individuals involved and on other envir
onmental variables.
5
(a)
There are many reasons why health and safety at work should be important to all
organisations. (i) (ii) Employees – as human beings – should be protected from n
eedless pain and suffering. Employees and employers often both have legal obliga
tions to take reasonable measures to promote health and safe working.
(iii) Accidents, illness and other causes of employee absence and/or impaired pe
rformance cost the employer money. (iv) A business’s corporate image may suffer
if its health and safety record is poor. (v) A business’s employer brand, i.e. i
ts reputation as an employer may suffer if its health and safety record is not g
ood. This may make it difficult to attract and keep qualified staff.
(b)
In very general terms, everyone in the organisation is responsible for health an
d safety. As an individual, in order to contribute to a healthy, safe and secure
environment there are a number of things that you may need to do: (i) (ii) Be a
lert to potential hazards as you go about your work Take responsibility for your
own behaviour in the workplace, in order to protect yourself and others.
(iii) Co-operate with your employers’ health and safety measures: read instructi
ons, follow procedures, perform fire drills, etc. (iv) Keep yourself informed ab
out health and safety issues relevant to your workplace. (v) Undertake regular t
raining as necessary.
(vi) Warn people who may be at immediate risk as a result of hazardous condition
s or behaviours. (vii) Take steps to minimise hazards, for example by clearing y
our own work area of obstructions. (viii) Take steps to mobilise appropriate res
ponse procedures for example by sounding alarms or calling a first aid officer i
n the event of an accident. (ix) Inform appropriate people of identified hazards
and the need for corrective action which might be beyond the scope of your own
authority.
(c)
Your organisation may have dedicated departments, managers or staff in charge of
health and safety. These may include specialists such as, a first aid officer o
r a medical officer, an employee counsellor and/or health promotion officer, a f
ire prevention officer, security guards or a building manager with responsibly f
or a many different aspects of the work environment. The role of all of these pe
ople is to make and implement relevant polices and procedures, to listen to empl
oyee concerns and to respond to problems and emergencies. In addition, a number
of employee health and safety representatives may be appointed by the trade unio
ns or staff associations in your workplace, by agreement with your employer. The
ir role is to listen to employees’ concerns and to consult with the employer on
their behalf. Legislation can also impose general duties upon employers to make
sure that all systems and work practices are safe, that the work environment is
safe and healthy – i.e. well lit, warm, ventilated and hygienic and that all pla
nt and equipment is kept up to the necessary standard. Organisations may be requ
ired to provide protective clothing, safety guards on machinery and appropriate
training to enable employees to use machinery and equipment in a safe manner.
Systems
1
(a) (b)
2 marks for each influence identified up to a maximum of 8 marks.
8 marks
3 marks for each influence explained, up to a maximum of 6 marks, and a further
3 marks for appropriate use of examples in each explanation. 12 marks Total 20 m
arks
2
(a) (b)
4 marks for each explanation up to a maximum of 12 marks. 2 marks for each sourc
e identified up to a maximum of 8 marks.
3
(a) (b) (c)
2 marks for each dimension identified. 5 marks for each style identified and exp
lained. 3 marks for each practical application identified.
4
(a) (b) (c)
6 marks for a full explanation to include reference to encoding, decoding and fe
edback and 2 marks for a clearly labelled diagram. 8 marks 1 mark for each barri
er identified up to a maximum of 4 marks. 2 marks for each improvement suggested
up to a maximum of 8 marks. 4 marks 8 marks Total 20 marks
5
(a) (b) (c)
1 mark for each reason identified up to a maximum of 4 marks. 2 marks for each r
esponsibility up to a maximum of 8 marks. 2 marks for each responsibility up to
a maximum of 8 marks.
ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION ADVANCED LEVEL FRIDAY 8 DECEMBE
R 2006
e answered
Paper T5
6D–ENGPA Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 Many accounting system
s are now computerised. Computerised accounting systems have a number of advanta
ges over manual systems, but there are also a number of disadvantages. Required:
(a) Identify four advantages of computerised accounting systems. (b) Identify f
our disadvantages of computerised accounting systems. (10 marks) (10 marks) (20
marks)
6D–ENGAA Paper T5
6D–ENGAB Paper T5
2
Every organisation is likely to be exposed to the risk of fraud. Required: (a) I
dentify four common types of fraud. (b) Explain the consequences of the types of
fraud identified in part (a) above. (8 marks) (12 marks) (20 marks)
6D–ENGAC Paper T5
3
Motivation is a very important element in the management of individuals and can
be a useful tool for improving productivity. Required: (a) Explain Abraham Maslo
w’s theory of motivation. (b) Give five major practical limitations of Maslow’s
theory. (10 marks) (10 marks) (20 marks)
6D–ENGAD Paper T5
4
Training is the systematic development of the attitude, knowledge, skill and beh
aviour pattern required by an individual in order to perform a given task or job
effectively. Required: (a) Explain five benefits of training for an organisatio
n. (b) Explain five benefits of training for individual employees. (10 marks) (1
0 marks) (20 marks)
6D–ENGAE Paper T5
5
An effective health and safety policy is an important part of maintaining the he
alth and safety standards promoted by the International Labour Organisation. Req
uired: (a) Identify the five key elements that you would expect to see in a heal
th and safety policy. (10 marks)
(b) Identify five steps an organisation can take to ensure that its health and s
afety policy is effective. (10 marks) (20 marks)
Answers
6D–ENGIX Paper T5
Systems 1 (a) The advantages of computerised accounting systems compared with ma
nual systems are: (i) (ii) (iii) (iv)
6D–ENGAA Paper T5
Systems and packages can be used by non-specialists. Computerised systems are mo
re accurate than manual systems. A computer is capable of handling and processin
g large volumes of data. Once the data has been inputted, computerised systems c
an analyse data very quickly to present useful control information for managers
such as a trial balance or debtors’ schedule.
(b)
The disadvantages of computerised accounting systems over manual systems are: (i
) The initial time and costs involved in installing the system, including the ne
ed for staff training. (ii) The need for security checks to make sure that unaut
horised personnel do not gain access to data files. (iii) Computers require info
rmation to be expressed in the form of codes and it is necessary to develop syst
ems of coding and checking. (iv) The potential for a lack of audit trail – as it
is not always easy to see where a mistake has been made.
6D–ENGAB Paper T5
2
(a)
Fraud falls into one of two main categories: the removal of funds or assets from
a business; and the intentional misrepresentation of the financial position of
the business. Types of fraud associated with the removal of funds or assets incl
ude: (i) (ii) (iii) (iv) (v) (vi) (vii) Theft of cash or stock. Payroll fraud th
rough falsifying timesheets, deliberate miscalculation of payslips, fictitious s
taff added to payroll lists. Fictitious customers. Collusion with customers. Man
ipulation of bank reconciliations and cash books. Misuse of pension funds or oth
er assets. Disposal of assets to employees.
Types of fraud associated with the intentional misrepresentation of the financia
l position of the business include: (i) Over or under valuation of stock. There
is a range of ways in which stock may be incorrectly valued for accounts purpose
s: the records can be manipulated by deliberate miscounting, deliveries to custo
mers may be omitted from the books, returns to suppliers may not be recorded and
obsolete stock may not be written off but held at cost on the balance sheet. (i
i) Fictitious sales channelled through the accounts. (iii) Manipulation of year-
end events to enhance turnover during the year just ended. (iv) Understating exp
enses. Failure to record all expenses accurately will inflate the reported profi
t figure. (v) Manipulation of depreciation figures. Applying incorrect rates or
inconsistent policies in order to understate depreciation will result in a highe
r profit and a higher net book value, giving a more favourable impression of fin
ancial health. (b) The precise ways in which an organisation is affected by frau
d depends upon the type of fraud being carried out. If the fraud is in the categ
ory of the removal of funds or assets from the business then there will be both
immediate financial consequences and also longer-term effects on company perform
ance. The immediate consequence is that profits will be lower than they should b
e. The business has less cash and fewer assets and therefore the net asset posit
ion is weakened. Returns to shareholders (if applicable) are likely to fall as a
result. In the longer term, the reduction in working capital makes it more diff
icult for the company to operate effectively. In the most serious cases, fraud c
an ultimately result in the collapse of the business. If the fraud is in the cat
egory of intentional misrepresentation of the financial position of the business
then the financial statements will not give a true and fair view of the financi
al situation of the business. Results may be either artificially enhanced or und
er-reported. It is also possible that managers in charge of a particular divisio
n can artificially enhance their divisions’ results, thereby deceiving senior ma
nagement.
6D–ENGAC Paper T5
3
(a)
Maslow described five needs and put forward a theory about the motivating power
of each of those needs. The five needs are: (i) (ii) (iii) (iv) (v) Physiologica
l needs – food and shelter. Safety needs – the need for security and order and t
he need to be free from threat. Social needs – the need for belonging, for relat
ionships. Esteem needs – the need for respect, recognition and status. Self actu
alisation – the need for personal fulfilment
In addition to identifying these needs, Maslow argued that these needs could be
seen as hierarchical in nature, from physiological needs at the bottom up to sel
f-actualisation needs at the top. Each level of need is dominant until it is sat
isfied and only then does the next level of need become a motivating factor. Onc
e a particular need has been satisfied it ceases to be a motivator.
6D–ENGAC Paper T5
(b)
There are a number of major limitations to Maslow’s theory: (i) An individual’s
behaviour may be in response to several needs simultaneously. (ii) The same need
may cause different behaviour in different individuals. (iii) The theory ignore
s the concept of deferred gratification, whereby individuals are prepared to ign
ore current suffering or dis-satisfactions for the promise of future benefits. (
iv) Verification of the hierarchy is difficult. The role of pay is ambiguous and
self-actualisation is very subjective. (v) The hierarchy reflects UK and US cul
tural values which may not transfer to other contexts.
6D–ENGAD Paper T5
4
(a)
There are many benefits of training to organisations, including: (i) (ii) (iii)
(iv) (v) (vi) (vii) (viii) (ix) Increased motivation. Training programmes can in
crease commitment to the organisation’s goals, by satisfying employee’s self-act
ualisation needs. Managing change. Training can help organisations manage change
by letting people know why the change is happening and give them skills to cope
with it. Developing corporate culture. Training programmes can be used to build
the corporate culture or to direct it in certain ways. Staff retention. Trainin
g can lead to internal transfers and promotions. Recruitment and succession plan
ning. Increased organisational flexibility. Training ensures that people have a
variety of skills. Fewer accidents and better health and safety. Less need for s
upervision – properly trained people can get on with the job. Better job perform
ance resulting from improved skills.
(b)
There are many benefits of training to individuals, including: (i) Psychological
benefits. The employee feels reassured that he or she is of value to the organi
sation. Increased skill, knowledge and competence also enhances self-esteem and
confidence. (ii) Enhanced portfolio of skills. Even if not specifically related
to the current job, training can be useful to the employee in different contexts
and can make a valuable contribution to the enhancement of their CV. (iii) Trai
ning can also provide the necessary skills and competence that an employee needs
for future promotion. (iv) Social benefit. People’s social needs can be met thr
ough training and they can also develop a network of contacts. (v) The job itsel
f. Training can help people to do their job better, thereby increasing job satis
faction, promotion and earning prospects. (vi) An increased understanding of the
business as a whole if staff train with other departments.
6D–ENGAE Paper T5
5
(a)
Regardless of the specific needs and hazards of a particular workplace, there wi
ll be several key elements to a health and safety policy which will be common to
all. The key elements are: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Risk asses
sment. Hazard minimisation. Systems and procedures (e.g. accident reporting and
safety procedures for using specific equipment). Equipment (provision of protect
ive clothing, ergonomics, safety equipment, maintenance). Information (warnings,
instructions). Training (use of equipment and safety procedures). Responsibilit
ies. On-going monitoring.
(b)
There a number of steps an organisation can take to ensure that its health and s
afety policy is effective, including: (i) (ii) (iii) (iv) Making sure that the p
olicy is known and understood by everyone in the organisation. Involving people
in the development of the policy. Regularly reviewing the policy. Clear identifi
cation of roles and responsibilities. Everyone in the organisation has a role to
play in ensuring their own health and safety as well as that of their colleague
s. It is important that employers and employees are aware of their own specific
responsibilities. Employers are required to make sure that all systems and work
practices are safe, that the work environment is safe and that all plant and equ
ipment is maintained to the necessary standard. Employees are required to take r
easonable care and to cooperate with employers to help them comply with their le
gal obligations. (v) Nominating individuals throughout the organisation with spe
cific responsibility for health and safety. This will include nominated safety r
epresentatives and trained first aiders within each department. Many organisatio
ns appoint a safety committee to keep safety measures and policies under review.
(vi) On-going risk management rather than a one-off risk assessment. This inclu
des the following: introducing controls to reduce risk, sharing of risk and haza
rd information, revising safety policies as appropriate, identifying any particu
lar categories of employee who are especially at risk and identifying any traini
ng needs.
(vii) On-going health and safety training. The amount and types of training requ
ired should be assessed according to individual needs. All employees should rece
ive induction training when joining the organisation or when transferring to a d
ifferent department or location. In addition there may be training requirements
associated with the use of specific equipment or machinery. Training may also be
required on a regular basis to update people regarding any changes to the law o
r for technical updates (viii) Information sharing, awareness and consultation a
re important in ensuring a health and safety policy is effective. Employees must
be clearly advised of any risks and how they can be minimised.
6D–ENGAE Paper T5
6D–ENGMS Paper T5
Systems 1 (a) (b) 2·5 marks for each advantage identified up to a maximum of 10
marks 2·5 marks for each disadvantage identified up to a maximum of 10 marks
December 2006 Marking Scheme 10 marks 10 marks Total 20 marks
2
(a) (b)
2 marks for each type of fraud identified up to a maximum of 8 marks. 3 marks fo
r each implication explained up to a maximum of 12 marks.
3
(a) (b)
1 mark for each of the five levels of need identified. 5 marks for a clear expla
nation of the theory. 2 marks for each limitation given up to a maximum of 10 ma
rks.
4
(a) (b)
2 marks for each benefit identified up to a maximum of 10 marks. 2 marks for eac
h benefit identified up to a maximum of 10 marks.
5
(a) (b)
2 marks for each of the five elements identified up to a maximum of 10 marks. 2
marks for each step identified up to a maximum of 10 marks.
07
e answered
Paper T5
7J–ENGPA Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 Many different types o
f activity are carried out in a typical organisation. Many of these activities c
an be grouped into broad functional areas within the organisation structure. Req
uired: (a) Identify and fully explain any two broad functional areas within an o
rganisation. (10 marks)
7J–ENGAA Paper T5
(b) Briefly explain any five factors which might influence the way in which an o
rganisation is structured. (10 marks) (20 marks)
7J–ENGAB Paper T5
2
An integrated system links together the different elements of an accounting pack
age such as sales, purchases and stock. Required: (a) Explain four potential ben
efits of an integrated system. (b) Identify and briefly explain five key outputs
from a computerised sales ledger system. (10 marks) (10 marks) (20 marks)
7J–ENGAC Paper T5
3
There are different levels of management in most organisations. The supervisor i
s the first level of management. Required: (a) Explain four key features of supe
rvision. (8 marks)
(b) With reference to appropriate theories, identify and fully explain three key
differences between management (12 marks) and leadership. (20 marks)
7J–ENGAD Paper T5
4
Interpersonal skills are skills used in the interactions and relationships betwe
en two or more people. Required: (a) State and briefly explain five examples of
interpersonal skills. (10 marks)
(b) State and briefly explain five examples of where interpersonal skills are im
portant in an organisation. (10 marks) (20 marks)
7J–ENGAE Paper T5
5
A safe and healthy working environment is an important part of maintaining the h
ealth and safety standards promoted by the International Labour Organisation. Re
quired: (a) Give five examples of costs that might be incurred by an organisatio
n as a consequence of accidents or illness within the workplace. (10 marks) (b)
Identify and briefly explain five key factors which can contribute to a safe and
healthy working environment. (10 marks) (20 marks)
Answers
7J–ENGIX Paper T5
Systems 1 (a)
June 2007 Answers
7J–ENGAA Paper T5
Within a typical organisation, there are many different types of activity being
carried out for example (two only required): – – – – – – – – Purchasing material
s and components Carrying out operations on purchased materials and components R
esearch on and development of new products and technologies Communicating with c
ustomers and potential customers Taking and processing sales orders Accounting a
nd record keeping Employing and managing people Planning and controlling all of
the above activities to ensure that the organisation reaches its goals
Many of these activities can be grouped under the following broad functions (two
only required): (i) Production or direct service provision. This is the reason
the organisation is in business. It covers the output of factories and farms and
also the provision of services. For manufacturing industry, purchasing of compo
nents and raw materials are important functions, and research and development ex
penditure is necessary in order to stay ahead technologically. Over the past few
decades, manufacturing has been relocating to parts of the world where labour i
s cheaper, so a larger proportion of the workforce in a number of countries is n
ow engaged in service industries. Sales and marketing. The sales function covers
both retail operations and the activities of the sales force who deal in large
orders and contracts. This is a vital function. The outputs of the business are
of no value if they cannot be sold. Marketing seeks out prospective customers fo
r the product and looks for the best way to present it to them. Marketing has be
come increasingly sophisticated over the past decade with customer profiling and
use of web-based technologies.
(ii)
(iii) Accounting and finance. Sales and purchases give rise to transactions (whi
ch must be recorded) and movements of funds (which must be monitored). The accou
nting and finance functions are there to safeguard the assets of the business, c
omply with the statutory requirements and provide the information needed by mana
gement in order to run the business profitably. (iv) Human resource planning and
management. For most businesses, personnel are the biggest cost and most valuab
le asset. This becomes more and more the case as service-based industries replac
e traditional manufacturing. Recruiting, keeping and training the right people i
s now a major function in large organisations. Planning and budgeting will also
involve calculating future human resource needs. (b) There are many influences o
n organisation structure (five only required). (i) (ii) There are certain intern
al principles of organisation, which determine some aspects of structure. The sc
alar chain of authority, span of control and centralisation and decentralisation
are all significant influences. The objectives of the organisation and how thes
e are broken down to define the goals of sub-units. Diversified organisations, f
or example, may require more decentralised structures with autonomous specialist
units. Organisations that want to support innovation may need more flexible str
uctures.
(iii) The task or activity of the organisation, which determine which line and s
upport functions are required, and the relative importance of each. (iv) The tec
hnology of the task (how it is organised, as well as the tools and techniques us
ed). Technologies require certain forms of organisation to maximise their effici
ency and the needs of the people involved. (v) The size of the organisation. As
structures get larger they tend to get more complex. Formalisation, specialisati
on and sub-division are required in order to control and coordinate performance
more closely. Geographical spread, on the other hand, may require more decentral
ised structures to take local factors into account.
(vi) The human resources of the organisation. Their skills and expectations infl
uence how far authority is decentralised (giving them more responsibility) and h
ow work is organised (facilitating team working or utilising multi-skilled worke
rs, for example). (vii) The environment of the organisation. Many factors and ch
anges within the business environment represent opportunities and threats to whi
ch the organisation structure must be able to adapt. For example, information an
d communication technology has enabled organisations to adopt looser, more netwo
rk-style units and to outsource areas of their activities to other organisations
. (viii) The culture of the organisation. Managerial willingness to delegate aut
hority will support decentralisation and values about ‘responsiveness’ will lead
to a more flexible culture. (ix) Geographical location.
7J–ENGAB Paper T5
2
(a)
An integrated system automatically links together the different elements of an a
ccounting package, such as sales, purchases and stock. In this way, data entered
into one module can automatically update a database shared by all modules. For
example, a sales invoice generated by the system could then update: – – – The sa
les ledger The stock module, recording the movement out of the goods The sales a
ccount in the nominal ledger.
There are a number of potential benefits to this (four only required): (i) (ii)
One entry updates all of the others so there are fewer data inputs and fewer err
ors. Fewer people need to be involved in the input. This makes it possible to ha
ve more restricted access to the computer system, which enhances overall control
. (However, this may have some implications for segregation of duties.)
(iii) Errors in one module are unlikely to go unnoticed because they will imping
e upon other areas. (iv) Frauds involving just one accounting area are difficult
to maintain because queries will tend to arise in other areas. (v) All of the a
bove lead to the amalgamation of better information as the basis of improvements
via the integrated system and easier generation of reports across a number of m
odule areas.
(b)
Typical outputs of a computerised sales ledger are as follows (five only require
d): (i) (ii) Day book listing. A list of all transactions posted each day. This
provides an audit trail, information which the auditors of the business can use
when carrying out their work. Batch and control totals will be included in the l
isting. Invoices and statements, produced for customers at point of despatch and
at the end of the month or a given period.
(iii) Aged debtors list, typically produced monthly. (iv) Sales analysis reports
. This will analyse sales according to the sales analysis codes on the sales led
ger file. (v) Debtors’ reminder letters. Letters can be produced automatically t
o chase up late payments when the due date for payment goes by without payment h
aving been received.
(vi) Customer lists. This list might be printed onto adhesive labels, for sendin
g out customer letters or marketing material. (vii) Responses to enquiries, perh
aps output onto a VDU screen rather than as printed copy, for fast response to c
ustomer enquiries. (viii) Output onto disk file for other modules, e.g. to the s
tock control module and the nominal ledger module, if these are also used by the
organisation, and the package is not an integrated one.
7J–ENGAC Paper T5
3
(a)
The key features of supervision are as follows (four only required): (i) A super
visor is usually a front-line manager, dealing with the levels of the organisati
on where the day-to-day work is done. The supervisor will deal with matters such
as staffing and health and safety at the day-to-day operational level, whereas
a manager might deal with them at a policy making level. A supervisor does not s
pend all of his or her time on the managerial aspects of the job. Much of the ti
me will be spent doing technical/operational work.
(ii)
(iii) A supervisor is a gatekeeper or filter for communication between manageria
l and non-managerial staff, both upward (conveying reports and suggestions) and
downward (conveying policies, instructions and feedback). (iv) The supervisor mo
nitors and controls work by means of day-to-day, frequent and detailed informati
on: higher levels of management plan and control using longer-term, less frequen
t and less detailed information, which must be ‘edited’ or selected and reported
by the supervisor. (v) Supervisors often carry out Fayol’s five functions of ma
nagement (planning, organising, commanding, coordinating and controlling) at a l
ower, more operational level.
(b)
The terms ‘management’ and ‘leadership’ are often used interchangeably. However,
there have been many attempts to distinguish meaningfully between them (three o
nly required). (i) Kotter (2001) argues that leadership and management involve t
wo distinct sets of action. Management is about coping with complexity: its func
tions are to do with logical structure, analysis and control, and are aimed at p
roducing order, consistency and predictability. Leadership, by contrast, is abou
t coping with change: its activities include creating a sense of direction, comm
unicating strategy, and energising, inspiring and motivating others to translate
the vision into action. Yukl (1998) suggests that while management is defined b
y a prescribed role and position in the structure of the organisation, leaders a
re given their roles by the perception of others, through election, choice or in
fluence. Leadership is an interpersonal process. Managers have subordinates; lea
ders have followers.
(ii)
(iii) Zaleznik (1992) suggests that managers are mainly concerned with order and
maintaining the status quo, exercising their skills in diplomacy and focusing o
n decision-making processes within the organisation. Leaders, in contrast, direc
t their energies towards introducing new approaches and ideas. They create excit
ement and vision in order to arouse motivation and focus with empathy on the mea
nings of events and actions for people. Leaders search out opportunities for cha
nge. (iv) Katz and Kahn (1974) point out that while management aims to secure co
mpliance with stated organisational objectives, leadership aims to secure willin
gness, enthusiasm and commitment. Leadership is the influential increment over a
nd above mechanical compliance with the routine directives of the organisation.
(v) Management can be exercised over resources, activities, projects and other e
ssential non-personal things. Leadership can only be exercised over people.
7J–ENGAD Paper T5
7J–ENGAC Paper T5
4
(a)
Interpersonal skills are particular types of communication skills and include (f
ive only required): (i) (ii) Building a rapport or a sense of ‘being in tune wit
h’ another person, which draws them into a relationship. Building trust and resp
ect, so that the relationship is maintained and co-operation facilitated.
(iii) Managing conflict in such a way that the relationship is preserved. (iv) P
ersuading or influencing another person to do what you want them to do or to sha
re your beliefs. (v) Negotiating or bargaining in order to reach mutually accept
able or compromise solutions to problems.
(vi) Communicating assertively, so that you uphold your rights and get your need
s met – without violating the rights or ignoring the needs of others. (vii) Comm
unicating informally, so that you give (and receive) relevant and timely informa
tion. (viii) Communicating supportively, so that you encourage the other person
and gain their commitment. (b) Interpersonal skills are particularly important f
or processes such as (five only required): (i) (ii) Motivation: persuading and i
nspiring employees to committed performance. Teamworking and team building: buil
ding trust, encouraging communication, forming co-operative relationships and ma
naging conflict.
(iii) Customer care (including internal customers): winning trust, managing conf
lict, exchanging information and persuading. (iv) Human resource management: neg
otiating, interviewing, conducting appraisals, managing formal disciplinary and
grievance procedures. (v) Negotiation: maintaining relationships despite conflic
ting interests, working towards mutually acceptable solutions.
(vi) Workload management: being able to delegate effectively, negotiating assist
ance, saying ‘no’ assertively. (vii) Career development: demonstrating networkin
g, communication and leadership skills – increasingly essential for managerial r
oles.
7J–ENGAE Paper T5
5
(a)
Costs to the employer may include the following (five only required): (i) (ii) P
roductive time lost by the absent employee, and by other employees who stop work
at the time of, or following, the accident. A proportion of the cost of employi
ng first aid and medical staff.
(iii) The cost of disruption to operations at work. (iv) The cost of any damage
to equipment, including subsequent modifications to make it safer. (v) The cost
of any compensation payments or fines resulting from legal action following an a
ccident or illness.
(vi) The costs of increased insurance premiums. (vii) Possible reduced output fr
om the employee on return to work. (viii) Possible reduced output, increased abs
enteeism or increased labour turnover as a result of low morale among workers in
an environment which has been shown to be unsafe or unhealthy. (ix) The cost of
recruiting and training a replacement for the absent employee. (b) Some of the
key requirements of a safe and healthy working environment are as follows (five
only required): (i) (ii) Cleanliness. Floors and steps to be cleaned regularly.
Clean furniture and fittings. No accumulation of rubbish. Avoid overcrowding. Ma
ke sure that each person has an adequate amount of space in which to work comfor
tably.
7J–ENGAE Paper T5
(iii) Ventilation. There must be an adequate supply of fresh or purified air in
circulation. (iv) Temperature. A reasonable temperature must be maintained. (v)
Lighting and windows. There must be adequate natural or artificial light. Window
s must be kept clean inside and outside.
(vi) Toilets. There must be enough suitable toilets for all employees. They must
be properly ventilated and lit, kept clean and properly maintained. (vii) Washi
ng facilities. There should be access to clean hot and cold water, soap and towe
ls, or equivalent. (viii) Drinking water. Adequate drinking water must be provid
ed together with cups or a fountain. (ix) Seating. Where work must be done sitti
ng down, seats must be suitable in design, construction and size. (x) Lifts. Lif
ts must be safe and maintained regularly.
(xi) Machinery and equipment. All equipment must be maintained. Dangerous parts
of machinery should have appropriate guards. Appropriate training should be give
n in the use of all machinery. (xii) No heavy lifting. People should not be requ
ired to lift, carry or move a load likely to cause injury. Appropriate training
should be provided for all those required to undertake any lifting. (xiii) Fire
precautions. Appropriate fire fighting equipment should be provided. Valid fire
certificates should be in evidence. Escape routes clearly marked etc. (xiv) Firs
t aid. A first aid box/room, a trained first aider, and first aid training shoul
d all be made available.
7J–ENGMS Paper T5
Systems 1 (a)
1 mark for each functional area identified up to a maximum of 2 marks; 4 further
marks for each explanation of the two areas previously identified. 1 mark for e
ach factor given up to a maximum of 5 marks; a further 1 mark for the explanatio
n of each factor given up to a maximum of 5 marks.
10 marks
(b)
2
(a)
2·5 marks for each benefit explained up to a maximum of 10 marks (1 mark only if
no explanation offered). 1 mark for each output identified up to a maximum of 5
marks and 1 further mark for each accompanying explanation.
10 marks
(b)
3
(a)
2 marks for each feature explained (1 mark only to be awarded if a feature is id
entified but no explanation is offered), up to a maximum of 8 marks. 1 mark for
each difference identified up to a maximum of 3 marks. 1 mark for each theorist
referenced, up to a maximum of 3 marks. 2 marks for each explanation of the diff
erence up to a maximum of 6 marks.
8 marks
(b)
4
(a)
2 marks for each example stated and explained up to a maximum of 10 marks (1 mar
k only if no explanation offered). 2 marks for each example stated and explained
up to a maximum of 10 marks (1 mark only if no explanation offered).
10 marks
(b)
5
(a) (b)
2 marks for each example of cost identified up to a maximum of 10 marks. 1 mark
for each factor identified up to a maximum of 5 marks. 1 further mark for the ac
companying explanation.
10 marks
Certified Accounting Technician Examination Advanced Level
Friday 7 December 2007
Time allowed: 2 hours
ALL FIVE questions are compulsory and MUST be attempted.
Do NOT open this paper until instructed by the supervisor. This question paper m
ust not be removed from the examination hall.
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 The accounting functio
n is part of the broader business system and does not operate in isolation. Acco
unting systems must be adequate to fulfil a range of objectives. Required: (a) I
dentify FOUR key purposes of an accounting system. (8 marks)
(b) Identify and explain, with the use of examples, any TWO organisational facto
rs that might influence the accounting systems of a business. (12 marks) (20 mar
ks)
2
Control systems make sure that the organisation drives its plans forward and ach
ieves its objectives. An effective control system will promote corrective action
s where necessary and also help to detect and deter fraud or prevent inefficienc
y. Required: (a) List EIGHT types of internal controls that can be used by an or
ganisation. (b) Fully explain any THREE of the types of controls identified in p
art (a) above. (8 marks) (12 marks) (20 marks)
3
Team working allows tasks to be shared amongst a number of individuals so that t
hey get done faster and more effectively and with a greater range of skills and
knowledge than by individuals working alone. Required: (a) Fully explain any TWO
different approaches to the organisation of teamwork. (8 marks)
(b) Describe any FOUR of the team roles identified by Belbin and explain their c
ontribution to the team. (12 marks) (20 marks)
4
There are several different schools of learning theory which help to describe an
d understand how people learn. Required: (a) Using the work of either Honey and
Mumford or Kolb, explain the FOUR key elements of the experiential learning cycl
e. Your explanation should include a fully labelled diagram. (10 marks) (b) Iden
tify and fully explain any TWO of the learning styles classified by Honey and Mu
mford. (10 marks) (20 marks)
5
Security aims to prevent others from taking away or doing damage to things that
belong to your organisation and/or the people who work within it. Required: (a)
Identify and explain any FOUR vulnerable points found on business premises and w
ithin systems. (8 marks) (b) Give FOUR examples of security procedures that shou
ld be in place in an organisation and explain how the contents of each might pro
tect the organisation from potential security risks. (12 marks) (20 marks)
Answers
Systems 1 (a)
The accounting function handles the financial operations of the organisation and
also provides information externally and advice to other departments. The exact
nature of the accounting system will depend on a number of factors, but it shou
ld provide for the orderly collection, recording and processing of accounting in
formation and appropriate analysis to enable financial statements to be prepared
. The main purposes of any accounting system are (four only required): (a) (b) (
c) (d) (e) (f) to to to to to to control the organisation provide information fo
r decision making provide planning and monitoring information safeguard the asse
ts prepare the financial statements comply with the relevant legislation
(b)
Accounting systems within an organisation are affected by the nature of its busi
ness transactions and the sort of business it is in, including the following (tw
o only required): (a) The size of the organisation can affect the accounting sys
tems. For example a small business like a greengrocer is likely to have a simple
accounting system where the main accounting records will be the till roll and i
nvoices from suppliers. A large retail business, such as a chain of supermarkets
will have more elaborate accounting systems covering a large number of product
ranges and sites. The type of organisation can affect the accounting system. For
example, a service business might need to record the time employees take on par
ticular jobs or activities. For example calculating charge out rates say in acco
unting, on a job or client basis, might also be a feature of service businesses.
A public sector organisation, such as a government department, may be more conc
erned with the monitoring of expenditure against performance targets than record
ing revenue. A manufacturing company will account for both unit sales and revenu
e, but also needs to keep a detailed track of material and other costs for decis
ion-making purposes and so forth. The structure of the organisation will affect
the accounting system. In a business managed divisionally, accounts will be prep
ared on a devolved basis. In a functional organisation where the accounts staff
are in a separate department, accounting may be wholly centralised. Some organis
ations are spread over many countries and are organised regionally. In such orga
nisations the accounting function will be organised geographically and accounts
will need to be prepared and reported segmentally.
(b)
(c)
2
(a)
There are eight types of internal controls. These are often remembered using the
mnemonic SPAMSOAP. (a) (b) (c) (d) (e) (f) (g) (h) Segregation of duties. Physi
cal controls. Authorisation and approval. Management controls. Supervisory contr
ols. Organisation as a control. Arithmetical and accounting controls. Personnel.
(b)
The controls listed in part (a) can be described as follows (three only required
): (a) Segregation of duties. Executive tasks should be separated from control t
asks. One of the prime means of control is the separation of those responsibilit
ies or duties which would, if combined, enable one individual to record and proc
ess a complete transaction. Segregation of duties reduces the risk of intentiona
l manipulation or error and increases the element of checking. Some functions sh
ould be separated whenever possible. For example, authorisation, execution and c
ustody. An example of segregation of duties concerns the receipt, recording and
banking of cash. It is not a good idea for the person who opens the post to be t
he person responsible for recording that the cash has arrived. It would be even
poorer practice for that person to be responsible for taking that cash to the ba
nk. If these duties are not segregated, there is always the chance that the pers
on will misappropriate or steal the cash and no-one would know. Physical control
s. These are concerned with the custody of assets and records and are also conce
rned with ensuring that access to assets and records is only permitted to author
ised personnel. Procedures and security measures are needed to ensure that acces
s to assets is limited to authorised personnel. Such controls include locks, saf
es and entry codes. Authorisation and approval. All transactions should be autho
rised or approved by an appropriate responsible person. The limits for these aut
horisations should be specified. In a purchasing system there should be authorit
y limits, where purchases of amounts exceeding those limits require higher autho
rity. Management controls. Management controls are exercised by management outsi
de the day-to-day routine of the system. These include the following: overall su
pervisory controls, review of management accounts and comparison with budgets, i
nternal audit function and special review procedures.
(b)
(c)
(d)
(e) (f)
Supervisory controls. Any system of internal control should include the supervis
ion by responsible officials of day-to-day transactions and the recording of the
m. Organisation as a control. Enterprises should have a plan of their organisati
on, defining and allocating responsibilities and identifying lines of reporting
for all aspects of the enterprise’s operations, including the controls. There mu
st be a well-defined organisational structure showing how responsibility and aut
hority are delegated. An effective plan would require: (i) (ii) (iii) (iv) separ
ation of a company’s operations into appropriate divisions and sub-divisions, ap
pointment of persons to assume responsibility, establishment of clear lines of r
esponsibility between each division and sub-division and the board of directors,
overall co-ordination of the company’s activities.
This will help to prevent friction so that staff work together well. It also mea
ns that no duties go unperformed or unchecked. (g) Arithmetical and accounting c
ontrols. These controls are within the recording function and check that the tra
nsactions to be recorded and processed have been authorised, that they are inclu
ded and that they are correctly recorded and accurately processed. This includes
: checking the arithmetical accuracy of the records, the maintenance and checkin
g of totals, reconciliations, control accounts, trial balances, accounting for d
ocuments.
(h) Personnel controls. These are procedures to ensure that personnel have capab
ilities appropriate to their responsibilities, since the proper functioning of a
ny system depends on the competence and integrity of those operating it. The qua
lifications, selection and training of the personnel involved are important feat
ures to be considered in setting up any control system. For example, a company a
ccountant should be suitably qualified.
3
(a)
There are a number of approaches to the organisation of teamwork: including mult
i-disciplinary teams, multi-skilled teams, self-managed teams and virtual teams.
(Two only required). (a) Multi-disciplinary teams bring together individuals wi
th different skills and specialisms so that their skills, experience and knowled
ge can be pooled or exchanged. Such teams are typically project; customer or pro
duct focused and are a feature of matrix type structures. Multi-disciplinary tea
ms increase workers’ awareness of their overall objectives and targets. They aid
coordination and communication across functional boundaries. They help to gener
ate new ideas and solutions to problems, since the team has access to more persp
ectives. Multi-skilled teams bring together a number of individuals who can perf
orm any of the group’s tasks. These tasks can then be shared out in more flexibl
e ways between group members, according to who is available and best placed to d
o a given job at the time it is required. Multi-skilling is the cornerstone of t
eam empowerment, since it cuts across the barriers of job descriptions and demar
cations, to enable teams to respond flexibly to changing demands. Self-managed t
eams are the most highly developed form of team working. They are permanent stru
ctures in which team members collaboratively decide all the major issues affecti
ng their work: work processes and schedules, task allocation, the selection and
development of team members, the distribution of rewards and the management of g
roup processes (e.g. problem solving, conflict management, internal discipline e
tc). Self-managed team working has a number of advantages including, saving mana
gerial costs, improvements in quality and productivity, encouraging individual i
nitiative and responsibility and gains in efficiency through multi-skilling. Vir
tual teams – the development of ICT has enabled communication and collaboration
among people in remote locations, via teleconferencing and video conferencing, l
ocally networked PCs and the Internet. This has created the concept of the ‘virt
ual team’: an interconnected group of people who may never be present in the sam
e place at the same time – but who share information and tasks, make joint decis
ions and fulfil the collaborative functions of a team with ‘physical’ proximity.
(b)
(c)
(d)
(b)
Belbin researched business game teams at the Henley Management College and drew
up a widely used framework for understanding roles within teams. He identified n
ine team roles: (i) (ii) The plant. The plant is creative, imaginative and unort
hodox, contributing to the team by solving difficult problems. The plant tends t
o ignore details and is often too pre-occupied to communicate effectively. The r
esource investigator. The resource investigator is extrovert, enthusiastic and c
ommunicative; contributing to the team by exploring opportunities and developing
contacts. The resource investigator can be over-optimistic and loses interest o
nce the initial enthusiasm has passed.
(iii) The coordinator. The coordinator is mature, confident and a good chairpers
on; contributing to the team by clarifying goals, promoting decision making and
delegating well. The coordinator can be seen as manipulative. (iv) The shaper. T
he shaper is challenging, dynamic and thrives on pressure; contributing to the t
eam by having the drive and courage to overcome obstacles. The shaper can be pro
vocative and sometimes hurts other people’s feelings. (v) The monitor evaluator.
The monitor evaluator is strategic and discerning; contributing to the team by
seeing all options and making accurate judgements. The monitor evaluator can lac
k drive and the ability to inspire others and tends to be over critical.
(vi) The teamworker. The teamworker is co-operative, mild, perceptive and diplom
atic; contributing to the team by listening, building relationships and calming
tensions. The teamworker can be indecisive in difficult situations and can be ea
sily influenced. (vii) The implementer. The implementer is disciplined, reliable
, conservative and efficient; contributing to the team by turning ideas into pra
ctical actions. The implementer can be somewhat inflexible and slow to respond t
o new possibilities. (viii) The completer. The completer is painstaking, conscie
ntious and anxious; contributing to the team by searching out errors and omissio
ns and delivers on time. The completer can be inclined to worry unduly and is of
ten reluctant to delegate. (ix) The specialist. The specialist is single-minded,
self-starting and dedicated; contributing to the team by providing specialist k
nowledge and skills. The specialist contributes on a very narrow front, tends to
dwell on technicalities and overlooks the bigger picture. The nine roles are co
mplementary and Belbin suggested that an ‘ideal’ team should represent a mix or
balance of all of them.
4
(a)
Honey and Mumford (building on the work of Kolb) have produced a simple model ca
lled the learning cycle, which shows how individuals can turn everyday work into
learning opportunities. This is known as experiential learning or ‘learning by
doing’. Having an experience
Planning the next steps
Reviewing the experience
Concluding from the experience The diagram shows the four stages in the learning
cycle. Having a concrete experience – this is about being fully involved in an
action or interaction, utilising your current knowledge and skills. This is foll
owed by reflection and reviewing the experience – this is about looking back aft
er the event, describing it and reflecting on how effective you were and what yo
u could do differently or better. People often use personal development journals
to write about events and interactions to help reflect on these issues. Conclud
ing from the experience (Kolb referred to this phase of the cycle as abstract co
nceptualisation) – this is about forming general principles or theories that sug
gest how you might do something different next time in order to achieve differen
t results. Planning the next steps (active experimentation in Kolb’s terms) – th
is is about planning specific opportunities to apply and test your conclusions i
n action. This provides a new experience with which to start the cycle again. (b
) The way in which people learn most effectively differs according to individual
psychological preferences, which have been categorised as distinct learning sty
les. Peter Honey and Alan Mumford have drawn up a popular classification of four
learning styles (two only required): (a) Theorists (i) Prefer to understand pri
nciples. (ii) Take an intellectual ‘hands-off’ approach. (iii) Learn best from p
rogrammed and structured training which allows time for analysis. (iv) Learn bes
t from teachers who share their preference for concepts and analysis. Reflectors
(i) Prefer to think things through first. (ii) Observe phenomena, think about t
hem and then choose how to act. (iii) Need to work at their own pace. (iv) Find
learning difficult if forced into hurried programmes. (v) Produce carefully thou
ght out conclusions after research and reflection. (vi) Tend to be fairly slow,
(non-participative unless to ask questions) and cautious. Activists (i) Prefer t
o try things ‘hands-on’ and require training based on ‘hands-on’ experience. (ii
) Deal with practical, active problems and do not have patience with theory. (ii
i) Are excited by participation and pressure, such as new projects. (iv) Are fle
xible and optimistic but tend to rush at some things without undue preparation.
Pragmatists (i) Prefer to work with real tasks and problems. (ii) Only like to s
tudy if they can see its direct link to practical problems.
(b)
(c)
(d)
(iii) Good at learning new techniques in on-the-job training. (iv) Aim is to imp
lement action plans and/or do the task better. (v) May discard good ideas which
may only require some development.
5
(a)
There are a number of vulnerable points on business premises and within systems.
These include (four only required): (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (
ix) (x) (xi) (xii) (xiii) (xiv) Public and open areas, such as entrances, hallwa
ys, parking areas, toilets, stairways and lifts – particularly if these are unat
tended or inadequately attended for the volume of traffic. Points of entry and e
xit, e.g. doors, windows, gates and lifts. These are points where intruders may
attempt to gain access. Attention should be paid to open, unsecured or broken wi
ndows or doors – especially in unattended areas. Unattended areas, e.g. store ro
oms or back stairs, where there are not always people about. Ill-lit areas like
car parks and stairwells. Reception areas, if an unauthorised person can talk, t
rick or slip their way past reception they may be much harder to identify as a s
tranger (and subsequently to locate within the premises) later. Areas where at-r
isk items and data are concentrated e.g. store rooms, computer rooms, offices et
c., especially if they are located near points of entry or exit and busy public
areas. Points of transit or storage outside the organisation’s premises. Valuabl
e items taken out of the office (for banking, delivery, work at home) may be par
ticularly vulnerable. Risks to computerised systems relating to the environment
in and around the location of hardware – this could lead to disruption of servic
e. Risk of fraudulent manipulation of data. Manipulating input data. Incorrect p
rocessing of data. Unauthorised access to personal or confidential data. Risks t
o data output. Risks to data at point of storage.
(b)
The following are examples of security procedures. (Four only required). (i) Pro
cedures for identifying regular staff. This includes instructions about the wear
ing of identity badges at all times, regardless of how well people might be know
n. Clear instructions about showing the pass whenever buildings and premises are
entered. It also includes being clear about the requirement to sign in and out
of buildings and premises. Procedures for vetting non staff members. If someone
is coming to visit you on business then you may be required to go down to a rece
ption area and accompany him or her back to the place where you work. If you hav
e not met them before you may need to ask them to produce some further means of
identification, for example a letter inviting them to attend a meeting or an eve
nt.
(ii)
(iii) Procedures for non-business visitors. If you are meeting a friend or relat
ive for lunch, your visitor may not be allowed on the premises or beyond the rec
eption area. It is important that your visitor does not unwittingly break, or tr
y to break, the rules. (iv) Procedures for protecting the building. A particular
door may have to be kept locked at all times or at specified times. It may be a
nominated person’s responsibility to ensure that this is adhered to. It may be
part of an individual’s responsibility to ensure that all windows in his or her
working area are closed and locked at the end of the day or at the end of a shif
t. (v) Procedures for protecting the organisation’s assets. Individuals usually
have responsibility to lock away items in a desk drawer, e.g. calculators etc.
(vi) Procedures for protecting documents and information. Locking away files and
ledgers, or not leaving a computer terminal such that it can be used by someone
without the password, are typical of measures of this sort. Other aspects of wo
rk may be sensitive and some individuals may have a confidentiality clause in th
eir contract of employment. (vii) Procedures for protecting procedures. Computer
passwords should not be revealed to others. Safe and lock combinations should n
ot be made generally available, they should be restricted to nominated individua
ls. There should also be procedures to control keys – such as a list of authoris
ed key holders and instructions about where keys should be kept and who should h
old master keys if they are used. The organisation’s security should not be disc
ussed with anyone outside of the organisation. (viii) Procedures for explaining
what to do in the event of a breach of security. The names and numbers should be
available of people to contact and also of the information that they will need
to be told: location of the intruders, for example, time of entry, how many ther
e are, items missing or damaged, and so on. (ix) Fall back procedures. If servic
e is disrupted by non-availability of computerised services there should be fall
back procedures in place to enable (limited) business services to continue. Als
o tested stand by and recovery procedures should be available to enable normal b
usiness to be quickly resumed.
Systems 1 (a) (b) 2 marks for each purpose given, up to a maximum of 8 marks.
December 2007 Marking Scheme 8 marks
4 marks for each factor explained up to a maximum of 8 marks. 2 marks for each e
xample given within each factor, up to a maximum of 4 marks.
2
(a) (b)
1 mark for each correct type of internal control identified, up to a maximum of
8 marks. 4 marks for each type of internal control fully explained, up to a maxi
mum of 12 marks.
3
(a) (b)
4 marks for each full explanation offered up to a maximum of 8 marks. 1 mark for
each team role identified up to a maximum of 4 marks and 2 further marks for ea
ch explanation of the four roles identified.
8 marks
4
(a) (b)
2 marks for each stage clearly explained and 2 marks for a clearly labelled diag
ram. 1 mark for each style correctly identified. 4 further marks for each full e
xplanation of each style identified.
5
(a)
1 mark for each vulnerable point identified up to a maximum of 4 marks. 1 furthe
r mark for each one explained. 1 mark for each example given, up to a maximum of
4 marks and 2 further marks for a full explanation of how the content of each o
ne identified might protect the organisation.
8 marks
(b)
Friday 6 June 2008
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 Organisations operate
within a regulatory framework set by government which is very broad in scope and
deals with a range of specific issues. Required: (a) Explain four principal aim
s of the government regulation of business. (8 marks)
(b) Identify and explain, with the use of examples, any four key areas in which
an organisation is affected by government legislation and regulation. (12 marks)
(20 marks)
2
Cash is a significant asset for many businesses and the control of cash is of pr
ime importance. Required: (a) Outline three key objectives for the control of ca
sh in any cash system. (6 marks)
(b) Identify any two types of cash system and in each case recommend three forms
of control that should be included in a detailed control procedure. (14 marks)
(20 marks)
3
A leader is someone who exercises influence over other people. There are many di
fferent leadership models and theories which try to explain the process of leade
rship. Required: (a) Outline three classifications of the theories, or ‘schools’
of leadership. (9 marks)
(b) Explain the Hersey and Blanchard situational leadership model. Your explanat
ion should include a description of the four leadership styles identified within
the model. (11 marks) (20 marks)
4
The effective employee needs to know exactly what their job entails and needs to
be very familiar with the work methods and practices of their organisation. Req
uired: (a) Explain the purpose of a job description and outline any four section
s that might be included within it. (10 marks) (b) Identify and briefly explain
five factors that affect the work methods and practices employed in an organisat
ion. (10 marks) (20 marks)
5
Required: (a) Explain why emergency procedures are important and outline four ke
y areas that you would expect to see included in an organisation’s emergency pro
cedures. (10 marks) (b) Explain why accident reporting procedures are important
and outline three important steps that you would expect to see included in an or
ganisation’s accident reporting procedures. (10 marks) (20 marks)
Answers
Systems 1 (a) The principal aims of government legislation are: (4 only required
): (i)
June 2008 Answers
To protect business entities, e.g. by enacting laws putting limits on market dom
inance by acting against monopolies and restrictive practices and by providing f
inancial assistance to selected ailing industries and companies. (ii) To protect
consumers through consumer protection regulations covering packaging, labelling
, food hygiene and advertising. (iii) To protect employees with laws governing t
he recruitment of staff and health and safety legislation that regulates conditi
ons of work. (iv) To protect third parties such as shareholders, suppliers and c
reditors through Companies Act regulation on capital maintenance and insolvency.
(v) To protect the interests of society at large against excessive business beh
aviour, e.g. by acting to protect the environment. (b) Organisations are affecte
d by legislation and regulation in the following areas (four only required). (a)
(b) (c) (d) (e) Health and safety at work Intellectual property and copyright D
ata protection Discrimination and equal opportunities Preparation of accounts
Health and safety at work. As an example of such legislation, the Health and Saf
ety at Work Act 1974 is a major piece of legislation in the UK. It provides the
legal framework to promote, stimulate and encourage high standards. The Act sets
out the general duties that employers have towards employees and members of the
public. It also sets out the general duties that employees have to themselves a
nd others. Organisations are affected in a number of areas including (but not li
mited to) the following areas, which are included here as examples. Organisation
s are required to have health and safety procedures including emergency procedur
es, evacuation procedures and accident reporting procedures. Employers are requi
red to look after the health and safety of their employees by ensuring that plan
t and equipment are safe and that articles and substances are handled and stored
safely. There is also a requirement to provide appropriate information, instruc
tion, training and supervision. A safe working environment and adequate welfare
facilities must be provided. Intellectual property and copyright. This refers to
the reproduction and use of other people’s work, including photocopying and rec
ording. Copyright law covers books of all kinds, sound recordings, film and broa
dcasts, computer programs, dramatic and musical works. Modern technology enables
the copying and distribution of software packages or DVDs to be done relatively
easily and cheaply compared with the cost of developing and producing the origi
nal. Manufacturers are increasingly bringing prosecutions to try and reduce the
number of pirate copies of their material. Data protection. The underlying princ
iples behind the legislation in this area are openness, good practice in obtaini
ng, using and securing data and an opportunity for redress when an individual ha
s cause for complaint. The legislation (for example in the UK, the 1984 and 1998
Data Protection Acts) places obligations on those who use personal data – they
must be open about the use of data and must follow a code of good practice. The
requirements will cover obtaining, storing, disclosing and using any personal da
ta about individuals. The need for privacy is recognised by the requirement that
all data should be held for clearly designated purposes. Accuracy and integrity
must be maintained and data must be open to inspection. Only legitimate parties
can access data, and information must be secured against alteration, accidental
loss or deliberate damage. Data must be obtained fairly, to precise specificati
ons and must not be kept for longer than is required. There may also be codes of
practice around how organisations respond to requests by individuals to access
data held about them. Discrimination and equal opportunities. Equal opportunitie
s is a term describing the belief that there should be an equal chance for all w
orkers to apply to be selected for jobs, to be trained and promoted in employmen
t and have that employment terminated fairly. Organisations are affected in a nu
mber of areas including (but not limited to) the following areas, which are incl
uded here as examples. The legislation covers specific issues like discriminatio
n on the grounds of race, ethnic origin, gender or marital status. There is also
specific legislation around equal pay for work of equal value and also disabili
ty. The legislation includes the administration of recruitment, selection, promo
tion, training and pay policies. It also includes interpersonal behaviours that
imply racial or sexual harassment. Preparation of accounts. This includes keepin
g appropriate accounting records. It also includes preparing and circulating ann
ual reports and accounts and the preparation of auditing and financial statement
s. Accounts of companies prepared under the Companies Acts are affected in a num
ber of areas including the following which are included here as examples. Limite
d companies are required to publish accounts annually for distribution to shareh
olders. Financial statements of companies must show a ‘true and fair view’. Pres
cribed formats for income statements and the balance sheet must be used. Detaile
d disclosures of information are required. A company is limited in the amount of
profit it can distribute to shareholders. Various provisions have to be satisfi
ed if a company wishes to increase or decrease its share capital. Company law al
so requires that the accounts of a limited company must be audited. This means e
ngaging a chartered or certified accountant to conduct an examination of the fin
ancial records of the company to ascertain that they present a ‘true and fair vi
ew’ and comply with the relevant Companies Acts.
2
(a)
The control of cash is of prime importance in any business. Key objectives for t
he control of cash are to ensure that: (i) (ii) (iii) (iv) All sums are received
and subsequently accounted for. No payments are made which should not be made.
All receipts and payments are promptly and accurately recorded. As part of worki
ng capital management an organisation does not run out of money.
(b)
There is not one ‘cash system’ in the same way as there is a sales cycle for exa
mple; there are a number of different types of cash system which each have their
own considerations as to the controls necessary. Cash systems also refer to che
que receipts and payments. Controls over cheque transactions are easier to estab
lish and maintain and most organisations try to conduct all of their cash transa
ctions by means of cheques or other forms of bank transfers. The following are t
ypes of cash systems (two only required): (a) (b) (c) (d) (e) (f) Cash (both che
ques and paper money) receipts by post Cash (cheques and paper money) collected
by sales people. Cash sales Controls over banking Cheque payments Petty cash
The forms of control, which should be included in a detailed control procedure,
are listed below (three only required for each cash system identified): (a) Cash
received by post (i) There should be safeguards against possible interceptions
between receiving and opening the post, e.g. a locked mailbox and restricted acc
ess to keys. (ii) The opening of post should be supervised. (iii) All cheques an
d postal orders should be restrictively crossed ‘Account payee only, not negotia
ble’ as soon as the post is opened. (iv) Records should be made of cheques, post
al orders and cash received at the time of opening the post. This can be in the
form of a cashbook, adding machine list, or copies of remittance advices. It pro
vides control over the eventual sums banked and entered into the cashbook. (v) T
he cashier and sales ledger personnel should not have access to the receipts unt
il the record has been made. (vi) Post should be date stamped. It provides evide
nce of when remittances are received and can be checked against the date of bank
ing. This helps to prevent cash received one day from being banked as representi
ng different receipts on a later day (teeming and lading). (vii) All monies shou
ld be banked promptly. (viii) The loss of receipts through theft or accident mus
t be prevented. Cash collected by sales staff (i) Authority to collect cash shou
ld be clearly defined. (ii) Sales staff should be required to remit cash and rep
ort sales at regular intervals. (iii) There should be clearly specified follow u
p actions if sales staff do not submit returns as required. (iv) Collections sho
uld be recorded when received e.g. in a cashbook or by copies of receipts, which
should be given to the sales staff. (v) The collector’s cash received should be
reconciled to the eventual banking. (vi) The sales person’s own receipt books s
hould be checked against the cashbook entries. (vii) If sales staff hold stocks
of goods, an independent reconciliation of stock with sales and cash received sh
ould be made. Cash sales (i) Cash sales should be recorded when the sale is made
, normally by means of a cash till or the use of cash sale invoices. (ii) If cas
h sale invoices are used they should be pre-numbered, a register should be maint
ained of cash sale invoice books and copies should be retained. (iii) Cash recei
ved should be reconciled daily with either the till roll or the invoice totals.
(iv) Someone independent of those receiving the cash and recording the sale shou
ld carry out this reconciliation. (v) Daily banking should be checked against th
e till roll or invoice total and differences investigated. (vi) A responsible of
ficial should sign cancelled cash sale invoices at the time of cancellation. All
such invoices should be checked periodically for the sequential numbering. Cont
rols over banking (i) Monies received should be banked daily. (ii) Each day’s re
ceipts should be recorded promptly in the cashbook. (iii) Sales ledger personnel
should have no access to the cash or the preparation of the paying-in slip. (iv
) Periodic comparisons should be made between the split of cash and cheques: (i)
received (and recorded in the cashbook) (ii) banked (and recorded on paying-in
slip)
(b)
(c)
(d)
(e)
Cheque payments (i) Unused cheques should be kept securely and access to them re
stricted. (ii) The person who prepares cheques should have no responsibility ove
r purchase ledger or sales ledger. (iii) Cheques should be signed only when evid
ence of a properly approved transaction is available. Such evidence may take the
form of invoices, payroll, petty cash book etc. (iv) Two signatories at least s
hould be required. (v) The signing of blank cheques should be prohibited. (vi) C
heques should be crossed before they are signed. (vii) Supporting documents shou
ld be cancelled as paid to prevent their use to support further cheque payments.
(viii) Returned cheques may be obtained from the bank and a sample checked agai
nst cashbook entries and supporting documentation. Petty cash (i) The level and
location of cash floats should be formally laid down. (ii) There should be restr
icted access to the petty cash float. (iii) Cash should be held securely in a lo
cked drawer or cupboard and access to keys should be restricted. (iv) All expend
iture should require a voucher signed by a responsible officer, not the petty ca
shier. (v) Vouchers should be produced before a cheque is signed for reimburseme
nt. (vi) Vouchers should be cancelled once reimbursement has taken place. (vii)
A maximum amount should be placed on a petty cash payment to discourage normal p
urchasing procedures being by-passed. (viii) The petty cash should be reconciled
by an independent person periodically. (ix) Rules should exist preventing the i
ssue of IOUs for the cashing of cheques.
(f)
3
(a)
There are several classifications of the theories or ‘schools’ of leadership, in
cluding: (a) (b) Trait theories – these are based on analysing the personality c
haracteristics or preferences of successful leaders and assume that leaders are
born, not made. Lists of traits included physical traits, personality traits and
social traits. Style theories – these are based on the view that leadership is
an interpersonal process whereby different leadership behaviours influence peopl
e in different ways. More or less effective patterns of behaviour (or styles) ca
n therefore be adopted. Contingency theories – these are based on the belief tha
t there is no ‘one best way’ of leading, but that effective leaders adapt their
behaviour to the specific and changing variables in the leadership context: the
nature of the task, the personalities of team members, the organisation culture
etc.
(c)
(b)
Hersey and Blanchard’s model of situational leadership is based on the amount of
direction (task behaviour) and the amount of support (relationship behaviour) a
leader must provide given the situation and the ‘level of maturity’ of the foll
owers. Task behaviour is the extent to which the leader provides directions for
the actions of followers, sets goals for them, and defines their roles and how t
o undertake them. Relationship behaviour is the extent to which the leader engag
es in two way communication with followers, listens to them and provides support
and encouragement. The Hersey and Blanchard model also considers the ‘readiness
’ level of people the leader is seeking to influence. Readiness is the extent to
which followers have the ability and willingness to accomplish a specific task.
This notion of ‘readiness’ is divided into a continuum of four stages from low
to high. The four stages are described as R1 (low), R2 and R3 (moderate) and R4
(high). The ‘level of maturity’ is the extent to which the people are willing an
d able to take responsibility for directing their own behaviour. People tend to
have varying degrees of maturity depending on the specific task, function or obj
ective that a leader is attempting to accomplish. To determine the appropriate l
eadership style to use in a given situation, leaders must first determine the ma
turity level of their followers in relation to the specific task that they want
to accomplish through the effort of the followers. As the level of maturity incr
eases leaders should begin to reduce their task behaviour and increase their rel
ationship behaviour. As the followers begin to move into an above average level
of maturity, leaders should decrease not only task behaviour but also relationsh
ip behaviour. From the combination of task behaviour and relationship behaviour,
four leadership styles (S) emerge: telling (S1), selling (S2), participating (S
3) and delegating (S4). S1 – telling – emphasises high amounts of guidance (task
behaviour) but limited supportive (relationship) behaviour. This leader provide
s clear instructions and specific direction. This style is most appropriate for
low follower readiness (R1). S2 – selling – emphasises high amounts of both dire
ctive (task) and relationship behaviours. The leader encourages two-way communic
ation and helps build confidence and motivation in followers. The leader retains
responsibility and controls decision-making. This style is most appropriate for
low to moderate follower readiness (R2). S3 – participating – emphasises a high
amount of two-way communication and supportive (relationship) behaviour but low
amounts of guidance (task behaviour). The leader and the followers share decisi
on making and no longer need or expect the relationship to be directive. This st
yle is most appropriate for moderate to high follower readiness (R3). S4 – deleg
ating – emphasises little direction or support with low levels of both task and
relationship behaviours. This style is appropriate for leaders whose followers a
re ready to accomplish a particular task and are both competent and motivated to
take full responsibility. This style is most appropriate for high follower read
iness. Hersey and Blanchard suggest that the key to using situational leadership
is that any leader behaviour may be more or less effective according to the rea
diness of the person the leader is attempting to influence. The model draws atte
ntion to the
importance of developing the ability, confidence and commitment of subordinates.
The leader should help followers to develop in readiness to the extent that the
y are able and willing to successfully accomplish the task. This development sho
uld take place by adjusting leadership behaviour through the four styles of tell
ing, selling, participating and delegating. This can be summed up as follows: (h
igh) Share ideas and facilitate in decisionmaking
PAR TIC IP
IN AT
G
SE
(Supportive behaviour) RELATIONSHIP BEHAVIOUR
Explain decisions and provide opportunity for clarification
IN LL
G
S3
S2
S4
Turn over responsibility for decisions and implementation Provide specific instr
uctions and closely supervise performance
S1
EG AT ING
G IN LL TE
(low)
DE L
TASK BEHAVIOUR (Directive behaviour)
(high)
4
(a)
A job description specifies and describes the role and responsibilities of a par
ticular job. It is a statement of the tasks, responsibilities and relationships
involved in a given job. All employees should have a job description that specif
ies tasks, details responsibilities, sets authority limits, distinguishes accoun
tability and outlines the organisational relationships that the job entails. The
following sections should be included in a job description (four only required)
: (i) (ii) (iii) (iv) The identification of the job, including the job title, th
e department structure and the number of people doing the job. The purpose of th
e job – identifying its objectives in relationship to the overall objectives, e.
g. to manage the purchasing section responsible for buying raw materials. The po
sition in the organisation – indicating the relationships with other jobs and th
e lines of responsibility. Often an organisation chart is included here. The pri
ncipal duties to be performed, with emphasis on key tasks and limits to the jobh
older’s authority. A more detailed breakdown might be included which identifies
specific tasks in terms of precisely what is to be done, with some explanation,
both in terms of quantity and quality. Responsibilities – a statement outlining
any responsibilities for the resources e.g. staff and budgets. Job requirements
and physical conditions – including details of noisy, dirty, dangerous condition
s or pleasant office conditions and also hours of work, overtime, unsocial hours
. Grade and salary range – details of the rate for the grade, incremental scales
, piecework, bonuses and commissions. Additional benefits such as pension scheme
s and the provision of a company car would also be included in this section. Rep
orting structure – to whom the job holder reports and at what level, with possib
le indications about future succession, prospects of promotion or transfer.
(v) (vi) (vii) (viii)
(b)
The work methods and practices of your department and organisation arise from a
number of factors (five only required): (i) (ii) (iii) (iv) The nature of the sp
ecific task: i.e. what needs to be done, in what order and in what manner, in or
der for the purpose of the task to be fulfilled. The requirements of the relevan
t laws (e.g. Data Protection Acts, Companies Acts), regulations and Codes of Pra
ctice established to ensure that tasks are completed safely, fairly and in accor
dance with the rights of individuals and society. The requirements of organisati
onal policy, formulated to reflect the organisation’s values, culture and intent
ions. The requirements of the organisation’s systems, procedures and rules devel
oped so that standard, safe, predictable and dependable methods are used to enco
urage everyone to work together towards achieving the objectives of the organisa
tion. Formal instructions from people in positions of authority. Where there is
no set policy, procedure or legal constraint, a manager can largely determine ho
w things are done. Informal ground rules or customs, developed over time by the
work group or the organisational culture. Methods of communication and coordinat
ion in place within the structure of the organisation – designed to ensure that
all sections of the organisation are pursuing common objectives and that duplica
tion of effort is avoided.
(v) (vi) (vii)
5
(a)
Emergency procedures are particularly important to ensure that people are aware
of the scope and limits of their responsibility. Health emergencies may include
any form of workplace injury (e.g. fractures, burns, eye injuries etc), electric
shock, fainting or collapse, allergic reactions to toxic substances or manifest
ations of illness such as heart attacks or epileptic fits. Procedures need to be
in place so that these can be dealt with as quickly and effectively as possible
. Employers also need to plan for emergency situations such as fire and bomb ale
rts, chemical spillage etc. The plan should be written down and communicated to
all employees and others who may be affected by it. Specific employees with allo
cated duties within the plan should be given appropriate, regular training in th
e correct procedures to follow. The purpose of emergency procedures is to ensure
that everyone is clear about what to do and where to go in the event of an emer
gency. The following areas should be included in an organisation’s emergency pro
cedures (four only required): (i) How to raise the alarm – this includes ensurin
g that employees are aware of the location of fire alarms and that the alarms ar
e regularly tested so that employees are able to recognise the sound. (ii) What
to do – i.e. how to call the emergency services and how to respond to a fire or
evacuation alarm. This is achieved by carrying out fire and evacuation drills th
roughout the year. (iii) Where to go to reach safety – this includes ensuring th
at employees are aware of fire and emergency exits, that they are clearly marked
and lead as quickly as possible to a designated safe area and are kept clear at
all times. This may also include evacuation procedures. (iv) Names of nominated
first aiders in each department or area – with full contact details. (v) Essent
ial actions such as emergency factory shutdown – locations of adequate protectiv
e equipment (such as sprinklers and fire extinguishers) should be in hand and re
gularly maintained.
(b)
Accident reporting procedures are important to ensure that the circumstances and
facts are recorded accurately as soon as possible after an accident. It may be
necessary to refer to accident reports at a later date if complications emerge s
ome time later. An accident reporting procedure would require the person reporti
ng the accident to do the following: (i) Report the accident to someone in autho
rity as soon as possible. This can be done informally, but in addition it is usu
al practice to complete an accident report form. (ii) Record the details of the
accident in an accident book. (iii) Get signed statements from any witnesses to
the accident, including names and addresses.
Systems 1 (a) (b) 2 marks for each aim explained up to a maximum of 8 marks.
June 2008 Marking Scheme 8 marks
1 mark for each area identified up to a maximum of 4 marks. 1 further mark for e
ach area explained up to a maximum of 4 marks and 1 further mark for each exampl
e used up to a maximum of 4 marks.
2
(a)
2 marks for each objective outlined up to a maximum of 6 marks. Marks could also
be awarded for other relevant points. 1 mark for each type of cash system ident
ified up to a maximum of 2 marks. Up to 2 marks for each form of control recomme
nded within each system up to a maximum of 6 marks in each area.
6 marks
(b)
3
(a) (b)
3 marks for each classification or ‘school’ outlined, up to a maximum of 9 marks
. 3 marks for a general overview of the model. 1 mark for each style identified
up to a maximum of 4 marks and 1 further mark for each style explained up to a m
aximum of 4 marks.
9 marks
4
(a) (b)
2 marks for an explanation of the purpose. 2 marks for each section outlined up
to a maximum of 8 marks. 1 mark for each factor identified up to a maximum of 5
marks, 1 further mark for each factor explained up to a maximum of 5 marks.
10 marks
5
(a) (b)
2 marks for an explanation of the importance. 2 marks for each area outlined up
to a maximum of 8 marks. 4 marks for an explanation of the importance. 2 marks f
or each step outlined up to a maximum of 6 marks.
10 marks 10 marks
Total 20 marks
Friday 5 December 2008
Paper T5
ALL FIVE questions are compulsory and MUST be attempted 1 (a) Explain the role o
f coordination in an organisation’s strategic planning process. (b) Identify and
briefly explain four key stages in human resource planning. (12 marks) (8 marks
) (20 marks)
2
(a) Explain three different types of comparison that managers might make when re
viewing reports on business or functional performance. (12 marks) (b) Outline th
e information you would expect to be included in EITHER a production and materia
l control report OR a marketing and distribution report. (8 marks) (20 marks)
3
(a) Explain McGregor’s concept of Theory X and Theory Y regarding human nature a
nd behaviour at work. (12 marks) (b) Briefly explain William Ouchi’s concept of
the Theory Z organisation and give three of its key characteristics. (8 marks) (
20 marks)
4
Work planning is an important part of a manager’s day-to-day work, as well as ma
king an important contribution to how individuals can organise themselves effect
ively. Required: (a) Describe the steps a manager should take when planning the
work of a department. (8 marks)
(b) Explain how you would use any four planning aids to help you to organise you
r personal workload effectively. (12 marks) (20 marks)
5
(a) Explain five key components of an effective health and safety policy.
(10 marks)
(b) List the steps a health and safety manager should take in order to design an
d implement an effective risk (10 marks) management programme. (20 marks)
Answers
Systems 1 (a)
Within any organisation, the departments, sections and individuals must all be o
rganised in such a way so as to ensure that the overall strategic objectives of
the organisation are attained and that each department, section and individual m
akes a contribution. It is essential that the efforts of each contributor are co
ordinated to ensure that objectives are met. The function of an organisation i.e
. attaining a strategic objective, is operated via the attainment of contributor
y objectives by departments, sections and individuals. This is why efforts at al
l levels must be coordinated. As the business plan will cover all departments of
the organisation, so all of the departmental plans and budgets must be coordina
ted, so that they are all working together to achieve the business plan. For exa
mple, sales should be planning to sell the number of units which the production
departments agreed to produce otherwise there will be either unsold stock or unf
ulfilled orders. Functional plans cannot proceed without regard for those of oth
er functions. There must be coordination between them and an integration of all
towards successful performance. At the production level for example, coordinatio
n will ensure that: (i) (ii) departments know what it is they need to achieve an
d when; work flows from one department to another without hold-ups or clashes an
d without idle time or overwork for staff or machinery; (iii) the resources requ
ired for a task are available where and when they are required; (iv) there is no
duplication of effort. Each department will have its own set of priorities but
effective coordination may cause some of these to change in the interests of pur
suing an overall set of priorities.
(b)
Human resource planning can be described as a strategy for the acquisition, util
isation, improvement and retention of an organisation’s human resources. The fou
r main stages are auditing, forecasting, planning and controlling resources. The
auditing stage involves the analysis of the strategic environment (trends in po
pulation growth, education, pensions etc) in the light of the organisation’s str
ategic objectives. The strategy chosen will have implications for the numbers of
employees and the mix of skills required. The forecasting stage analyses the de
mand for, and supply of, labour in terms of number, type and quality of people t
hat the organisation should employ to meet planned requirements and cover expect
ed turnover. The planning stage involves policies to recruit, train and develop
the labour force indicated in the forecast. The controlling stage involves measu
ring the effective use of the human resources and their contribution towards the
achievement of the organisation’s objectives. In addition to auditing, forecast
ing, planning and controlling resources – the following aspects of human resourc
e planning can also be important: recruiting, training and development, promotio
n planning and also retention and succession planning.
2
(a)
Managers can assess the significance of information by monitoring and measuring
against some baseline and most management reports are made more meaningful by th
e use of comparison. (Three only required) (i) Comparisons with previous periods
. The most common comparison of a previous period is of one year’s final figures
against the previous year’s. A business’s statutory financial accounts contain
comparative figures for the previous year as well as the figures for the actual
year. Some companies’ financial accounts contain figures for the last five years
. Comparing the figures for five years may be more valuable than comparing the f
igures for two years, as long term trends become more apparent over five years.
If the comparison is only over two years, one or other year might be unusual for
various reasons and this will distort the comparison. For management accounting
purposes year-on-year comparisons are insufficient by themselves; management wi
ll wish to pick up problems a lot sooner than the end of the financial year. Hen
ce comparisons are often made for management accounting purposes month-by-month
or quarter-by-quarter. Comparisons with corresponding periods. Making comparison
s month-by-month or quarter-by-quarter is most useful when you expect figures to
be reasonably even over time. However, demand for many products fluctuates seas
on-byseason. In this case, the most useful comparison would be to compare with t
he same season last year. This is the corresponding period.
(ii)
(iii) Comparison with forecasts. Businesses make forecasts for a number of purpo
ses. A very common type of forecasting is a cash flow forecast. The purpose of m
aking this forecast is for the business to be able to see how likely it is to ha
ve problems maintaining a positive cash balance. If the cash balance becomes neg
ative, the business will have to obtain a loan or overdraft which will involve i
nterest costs. At the end of the period, management will compare the actual figu
res with the forecast figures and try to assess why they differ. Differences are
likely to be a sign that some of the assumptions made when drawing up the origi
nal forecast were incorrect and so when making forecasts for future periods mana
gement may wish to change the assumptions that are made. (iv) Comparisons with b
udgets. A budget is an organisation’s plan for a forthcoming period, expressed i
n monetary terms. Budgets can be used to check that the plan is working by compa
ring the planned results for the day, week, month or year to date with the actua
l results. (v) Comparisons within organisations. Organisations may also wish to
compare the performance of different departments, sales regions or product type.
(vi) Comparisons with other organisations. An obvious way of assessing how a bus
iness is performing in its chosen market is to compare its results and financial
position with those of its main competitors. The main information that will be
generally available will be the competitor’s annual statutory financial accounts
. Comparisons are generally made on an annual basis.
(b)
You might expect the following to be included in a production and material contr
ol report: (i) (ii) (iii) (iv) (v) (vi) Forward loading plans for production cyc
les, both forecast and actual. Machine capacity forecast and actual. Departmenta
l operating statements. Stock and work-in-progress reports. Wastage reports. Lab
our utilisation report, both forecast and actual.
You might expect to see the following in a marketing and distribution report: (i
) (ii) (iii) (iv) (v) (vi) Market surveys. Order reports by product and geograph
ical area, both forecast and actual. Discount trends. Transport and warehouse co
st statements, both budgeted and actual. Sales personnel performance, both forec
ast and actual. Product service and support costs, both forecast and actual.
3
(a)
Douglas McGregor put forward two suppositions that US managers appeared to subsc
ribe to about human nature and behaviour at work. He argued that the style of ma
nagement adopted is a function of the manager’s attitudes towards people and ass
umptions about human nature and behaviour. The two suppositions are called Theor
y X and Theory Y and are based on opposing assumptions about people and work. Th
eory X represents the ‘carrot and stick’ assumptions believing that the average
human being has an inherent dislike of work and will avoid it if possible. He or
she also prefers to be directed, wishes to avoid responsibility, has relatively
little ambition and wants security above all. Because of the human characterist
ic of disliking work, most people must be coerced, controlled, directed and/or t
hreatened with punishment to get them to put in adequate effort towards the achi
evement of organisational objectives. Managers who operate according to these as
sumptions will tend to supervise closely, apply detailed rules and controls and
use ‘carrot and stick’ motivations. At the other end of the extreme to Theory X
is Theory Y. The central principle of Theory Y is the integration of individual
and organisational goals. Theory Y suggests that physical and mental effort in w
ork is as natural as play or rest. The average human being does not inherently d
islike work, which can be a source of satisfaction. External control and the thr
eat of punishment are not the only means of bringing about effort towards organi
sational objectives. People can exercise self-direction and self-control to achi
eve objectives to which they are committed. Theory Y also assumes that the avera
ge human being learns, under proper conditions, not only to accept, but also to
seek responsibility. Avoidance of responsibility, emphasis on security and low a
mbition are the results of experience and are not inherent in human nature. Unde
r conditions of modern industrial life, the intellectual potential of the averag
e human being is only partially utilised. McGregor was of the view that Theory Y
assumptions provided a better explanation of human nature and indicated the nee
d for a different managerial strategy in dealing with people if they were to be
correctly motivated. Managers who hold Theory Y assumptions about people are lik
ely to be more democratic and consultative. Both Theory X and Theory Y are inten
ded to be extreme sets of assumptions – not descriptions of actual types of peop
le. However, they also tend to be self-fulfilling prophecies since people tend t
o behave in the way expected of them. William Ouchi provided a comparison of man
agement style and practice in different cultural settings. Profiling American ma
nagement culture as Theory A and typical Japanese management as Theory J, he sou
ght to synthesise the two to propose a form of Japanese-style management that co
uld be applied successfully in a Western context. Ouchi called these methods The
ory Z. The characteristics of a Theory Z organisation are as follows (three only
required): (i) (ii) (iii) (iv) Long-term employment – not necessarily lifetime,
but longer than the average in American and European companies. Slow-progressin
g managerial career paths (as in the Japanese system, but with a more Western sp
ecialisation of skills). Moderately specialised careers – which may not change.
Collective consensus decision-making processes (Japanese), but with individual r
etention of ultimate responsibility for defined areas of accountability (Western
). (v) Industrial relations characterised by trust, co-operation and mutual adju
stment. (vi) Concern for the employee – close to the paternalistic attitudes of
the old Quaker companies in the UK, such as Cadbury’s. (vii) Implicit informal c
ontrols (such as guiding values) alongside explicit, formal controls.
(b)
4
(a)
All levels of management are involved in work planning. At the top level, decisi
ons are made on what to do, and as you come down the hierarchy the plan is devel
oped to incorporate how it is to be done, when and by whom. The basic steps in w
ork planning for a department include the following: (i) The establishment of de
partmental priorities, for example making decisions around which tasks and activ
ities are important and/or urgent. (ii) Scheduling or timetabling tasks and allo
cating them to different individuals within appropriate timescales (e.g. continu
ous routine work and arrangements for priority work with short-term deadlines),
to achieve work deadlines and attain departmental goals. (iii) Coordinating indi
vidual tasks within the duties of single employees or within the activities of g
roups or individuals so that both individuals and teams can work as effectively
as possible within a department.
(iv) Establishing checks and controls to ensure that priority deadlines are bein
g met and that work is not falling behind, and that routine tasks are achieving
their objectives. (v) Agreeing the mechanism and means to reschedule ordinary wo
rk within the department to facilitate and accommodate new, additional or emerge
ncy work by drawing up contingency plans for unscheduled events. (b) Personal wo
rk planning aids include lists and checklists, bar charts, precedence networks,
action plans, timetables, diaries, and personal organisers. (Four only required)
(i) Lists. Lists are a useful way of identifying and remembering what needs to
be done and of monitoring how you have got on. Lists can be used to plan a comin
g week and can also be generated on a daily basis. You can prioritise items on a
list in order of priority or in an order in which you intend to deal with the i
tems on the list. Lists can help to keep you focused if you stick to what is on
the list and don’t do anything that is not on your list for the day/week. At the
end of each day/week it can be useful to take all of the items on the list and
transfer them to the list for the following day/week. The physical act of writin
g tasks down on paper is an important part of the process and helps fix them in
your mind. A checklist is a particular type of list that allows ticking or check
ing off each task as it is completed. Checklists can be helpful if you need to i
ndicate when you start and finish an activity, or even for the stages of an acti
vity (for example where a particular document is at a given date) – or elements
of all of these.
(ii)
(iii) Bar charts. A bar chart has two main purposes: firstly to show the time ne
eded for a personal work activity, and secondly to display the time relationship
between one activity and another. Bar charts can be especially useful for check
ing the time schedules for a number of individual activities that are interdepen
dent. A bar chart can show the overall progress of a project or a piece of work
to date, thus assisting in monitoring the progress attained at an individual sta
ge of a multistage process. (iv) Precedence networks or time schedules. These ar
e helpful if you are having difficulty converting your list or checklist into a
workable sequence of personal actions. A simple precedence network shows which a
ctivities need to be completed before others. A major advantage of this approach
is that it allows you to show when a number of activities need to be done at ro
ughly the same time. (v) Timetables and diaries. These are useful to remind you
of key times and dates, to remind you to undertake advance preparations or follo
w up actions and to help you to allocate and coordinate your time effectively.
(vi) Personal organisers (including electronic ones) are often a combination of
timetables and diaries with additional features such as the ability to store con
tact details, notepad and file management facilities. (vii) Software packages su
ch as Microsoft Project and Outlook, which ease the task of planning by enabling
changes, updates and projections to be produced quickly. Once data has been ent
ered, bar charts, networks and reports can be produced.
5
(a)
There will be several elements to a health and safety policy, whatever the speci
fic needs and hazards of a particular workplace. Some of the key components are
as follows (five only required): (i) Risk assessment. This is part of continuing
risk management and includes: (a) (b) (c) (d) (ii) Identifying risks, Controlli
ng risks, Sharing information, Providing training as appropriate.
Having appropriate systems and procedures. This will include having safety proce
dures, procedures for the reporting of incidents, the removal of hazards and app
ropriate checking procedures. Emergency and evacuation procedures may also be in
cluded.
(iii) Minimising hazards associated with equipment. This will include the provis
ion of any protective clothing, ergonomic design of work areas, soundproofing, s
afety equipment and appropriate maintenance of machinery and equipment. (iv) The
provision of information. This includes any warning signs, instructions about l
ocation and use of fire extinguishers, updating safety manuals and ensuring that
everyone is aware of their location. (v) Training provision. This includes trai
ning in safety procedures and the use of equipment. It includes induction traini
ng, training when moving to a different department and regular updates on any ne
w policies or information.
(vi) Responsibilities. This includes employee duties and the appointment of heal
th and safety officers and representatives. (vii) On-going monitoring to ensure
policies and procedures are being adhered to. Making changes to systems and proc
edures as appropriate. (b) The typical steps that a health and safety manager mi
ght take in order to ensure on-going risk management are as follows: (i) (ii) (i
ii) (iv) Carry out a risk assessment, generally in writing, of all work hazards
on a continuous basis. Introduce controls to avoid/reduce risks and plan conting
ency measures to minimise impact. Assess the risks to anyone else affected by th
eir work activities (such as suppliers, customers or visitors). Share hazard and
risk information with other employers, including those on adjoining premises, o
ther site occupiers and all subcontractors coming on to the premises.
(v) (vi) (vii) (viii) (ix)
Revise safety policies in the light of the above – or initiate safety policies i
f none were in place previously. Identify employees who are especially at risk (
such as pregnant women or night shift workers). Provide up-to-date and appropria
te training in safety matters. Provide information to employees (including part-
time and temporary workers) about health and safety. Employ/appoint competent he
alth and safety advisors in all key areas.
Systems 1 (a)
December 2008 Marking Scheme
12 marks for a full explanation to include reference to meeting overall strategi
c objectives and departmental objectives, resource issues, workflows and avoidan
ce of duplication of effort. 12 marks 2 marks for each of the stages (or aspects
) identified and explained – in the context of planning – up to a maximum of 8 m
arks. 1 mark only to be awarded for a stage (or aspect) which is identified, but
not explained in the context of planning. 8 marks Total 20 marks
(b)
2
(a)
4 marks for each type of comparison (maximum of three types) explained, up to a
maximum of 12 marks. 1 mark only per type to be awarded if there is no explanati
on. 12 marks 2 marks for each item outlined, up to a maximum of 8 marks. 8 marks
Total 20 marks
(b)
3
(a)
5 marks for a full discussion of Theory X. 5 marks for a full discussion of Theo
ry Y. 2 further marks for reference to management style, self-fulfilling prophec
y, implications etc. 12 marks 2 marks for a brief explanation which includes ref
erence to the different cultural settings. 2 marks for each characteristic given
, up to a maximum of 6 marks. 8 marks Total 20 marks
(b)
4
(a)
2 marks for each step described up to a maximum of 8 marks. Only 1 mark to be aw
arded if no description is offered. OR 1 mark for each step identified up to a m
aximum of 8 marks. 8 marks 3 marks for each planning aid explained, up to a maxi
mum of 12 marks. Only 1 mark to be awarded per aid if the planning aid is just i
dentified or listed with no explanation. 12 marks Total 20 marks
(b)
5
(a)
2 marks for each component explained, up to a maximum of 10 marks. 1 mark only t
o be awarded if a component is listed but not explained. 10 marks 1 mark for eac
h step listed up to a maximum of 9 and 1 further mark for listing them in a sens
ible order. 10 marks Total 20 marks
(b)

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