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FI31ST14 (RICOH)_Layout 15/08/2013 18:02 Page About BPP Learning Media BPP Learning Media is dedicated to supporting aspiring business professionals with top quality learning material as they study for demanding professional exams, often whilst working full time BPP Learning Media’s commitment to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally-qualified specialists who know from personal experience the importance of top quality materials for exam success FAB ACCOUNTANT IN BUSINESS PAPER F1 ACCOUNTANT IN BUSINESS This Interactive Text provides the only study material for FIA FAB Accountant in Business and ACCA Paper F1 Accountant in Business which has been comprehensively reviewed by the Examiner This unique review guarantees appropriate depth and breadth of content and comprehensive syllabus coverage In addition to Examiner-reviewed material you get: n Chapter activities to test your understanding of the topics covered n Key terms extracted from the text and highlighted in ‘key term’ boxes n Exam focus points highlighting ways in which topics might be examined n A question and answer bank prepared by BPP Learning Media authors n Icons to highlight activities, key terms, PER alerts and quick quizzes n Regular fast forward summaries emphasising the key points in each chapter FAB ACCOUNTANT IN BUSINESS PAPER F1 ACCOUNTANT IN BUSINESS BPP Learning Media is the sole ACCA Platinum Approved Learning Partner - content FIA & ACCA FIA &ACCA FAB ACCOUNTANT IN BUSINESS ACCA PAPER F1 ACCOUNTANT IN BUSINESS INTERACTIVE TEXT For more details about this or any other BPP Learning Media products, please call our customer services team on 0845 0751 100 (within the UK) or +44 (0)20 8740 2211 (from overseas), email learningmedia@bpp.com or visit our website www.bpp.com/learningmedia INTERACTIVE TEXT At BPP Learning Media, we specialise in helping people pass professional exams Your exam success is our business FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015 SEPTEMBER 2013 UK £25.00 BPP House, Aldine Place, London W12 8AA Tel: 0845 0751 100 (for orders within the UK) Tel: +44 (0)20 8740 2211 Fax: +44 (0)20 8740 1184 www.bpp.com/learningmedia FIA FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015 FAB PAPER F1 ACCOUNTANT IN BUSINESS BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for the FIA and ACCA qualifications In this, the only FAB/F1 Study Text to be reviewed by the examiner:  We highlight the most important elements in the syllabus and the key skills you will need  We signpost how each chapter links to the syllabus and the study guide  We provide lots of exam focus points demonstrating what the examiner will want you to  We emphasise key points in regular fast forward summaries  We test your knowledge of what you’ve studied in quick quizzes  We examine your understanding in our exam question bank  We reference all the important topics in our full index BPP’s Practice & Revision Kit and i-Pass products also support this paper Note FIA FAB and ACCA Paper F1 are examined under the same syllabus and study guide FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015 I N T E R A C T I V E T E X T FAB/F1 ACCOUNTANT IN BUSINESS First edition March 2011 Third edition September 2013 ISBN 9781 4453 7026 Previous ISBN 9781 4453 9965 eISBN 9781 4453 7061 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place 142-144 Uxbridge Road London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom by RICOH Ricoh House Ullswater Crescent Coulsdon CR5 2HR Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the exam answer bank have been prepared by BPP Learning Media Ltd © BPP Learning Media Ltd 2013 ii A note about copyright Dear Customer What does the little © mean and why does it matter? 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CONTENTS Contents Page Introduction Helping you to pass – the ONLY FAB/F1 study text reviewed by the examiner! v Chapter features vi Studying FAB/F1 vii The Computer Based Examination xxiii Tackling Multiple Choice Questions xxiv Part A The business organisation, its stakeholders and the external environment Business organisations and their stakeholders The business environment 19 The macro-economic environment 57 Micro economic factors 85 Part B Business organisation structure, functions and governance Business organisation, structure and strategy 123 Organisational culture and committees 145 Corporate governance and social responsibility 177 Part C Accounting and reporting systems, controls and compliance 10 The role of accounting 199 Control, security and audit 235 Identifying and preventing fraud 261 Part D Leading and managing individuals and teams 11 12 13 14 15 16 17 Leading and managing people 289 Recruitment and selection 315 Diversity and equal opportunities 341 Individuals, groups and teams 353 Motivating individuals and groups 375 Training and development 395 Performance appraisal 417 18 Personal effectiveness and communication 433 Part E Personal effectiveness and communication in business Part F Professional ethics in accounting and business 19 Ethical considerations 473 Exam question bank 511 Exam answer bank 531 Index 543 Review form iii FAB/F1 ACCOUNTANT IN BUSINESS iv INTRODUCTION Helping you to pass – the ONLY FAB/F1study text reviewed by the examiner! BPP Learning Media – the sole Platinum Approved Learning Partner content As ACCA’s sole Platinum Approved Learning Partner – content, BPP Learning Media gives you the unique opportunity to use examiner-reviewed study materials for exams from February 2014 to August 2015 By incorporating the examiner’s comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Interactive Text provides excellent, ACCA-approved support for your studies The PER alert! To become a Certified Accounting Technician or qualify as an ACCA member, you not only have to pass all your exams but also fulfil a practical experience requirement (PER) The ‘PER alert’ feature used throughout this Interactive Text explains how what you are learning in order to pass may also be applied to fulfil the PER requirement Your achievement of the PER should be recorded in your online My Experience record The ACCA Competency Framework The ACCA have produced a Competency Framework to help students understand and develop the professional skills employers want To access the competency framework please visit: http://competencyframework.accaglobal.com Tackling studying Studying can be a daunting prospect, particularly when you have lots of other commitments The different features of the Text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success Developing exam awareness Our Texts are completely focused on helping you pass your exam Our advice on Studying FAB/F1 outlines the content of the paper, the recommended approach to studying and any brought forward knowledge you are expected to have Exam focus points are included within the chapters to highlight when and how specific topics might be examined Using the Syllabus and Study Guide You can find the Syllabus and Study Guide on page ix of this Interactive Text Testing what you can Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt We include Questions – lots of them – both within chapters and in the Exam Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content v FAB/F1 ACCOUNTANT IN BUSINESS Chapter features Each chapter contains a number of helpful features to guide you through each topic Topic list Tells you what you will be studying in this chapter and the relevant section numbers, together with the ACCA syllabus references Introduction Puts the chapter content in the context of the syllabus as a whole Study Guide Links the chapter content with ACCA guidance Fast Forward Demonstrates how to apply key knowledge and techniques EXAMPLE vi Summarises the content of main chapter headings, allowing you to preview and review each section easily Key Term Definitions of important concepts that can often earn you easy marks in exams Exam Focus Point Tell you how specific topics may be examined Formula Formulae which have to be learnt PER Alert This feature gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER) Question Gives you essential practice of techniques covered in the chapter Chapter Roundup A full list of the Fast Forwards included in the chapter, providing an easy source of review Quick Quiz A quick test of your knowledge of the main topics in the chapter Exam Question Bank Found at the back of the Interactive Text with more examstyle chapter questions Cross referenced for easy navigation INTRODUCTION Studying FAB/F1 How to Use this Interactive Text Aim of this Interactive Text To provide the knowledge and practice to help you succeed in the examination for Paper FAB/F1 Accountant in Business To pass the examination you need a thorough understanding in all areas covered by the syllabus and teaching guide Recommended approach (a) To pass you need to be able to answer questions on everything specified by the syllabus and teaching guide Read the Text very carefully and not skip any of it (b) Learning is an active process Do all the questions as you work through the Text so you can be sure you really understand what you have read (c) After you have covered the material in the Interactive Text, work through the Exam Question Bank, checking your answers carefully against the Exam Answer Bank (d) Before you take the exam, check that you still remember the material using the following quick revision plan (i) Read through the chapter topic list at the beginning of each chapter Are there any gaps in your knowledge? If so, study the section again (ii) Read and learn the key terms (iii) Look at the exam focus points These show the ways in which topics might be examined (iv) Read the chapter roundups, which are a summary of the fast forwards in each chapter (v) Do the quick quizzes again If you know what you're doing, they shouldn't take long This approach is only a suggestion You or your college may well adapt it to suit your needs Remember this is a practical course (a) Try to relate the material to your experience in the workplace or any other work experience you may have had (b) Try to make as many links as you can to other papers at the Introductory and Intermediate levels For practice and revision use BPP Learning Media’s Practice and Revision Kit, iPass and Passcards What FAB/F1 is about The overall aim of the Accountant in Business syllabus is to introduce accountancy firmly in its context as a central business function This encompasses:        Business organisation, stakeholders and the business environment Business structure, functions and governance, including social responsibility Accounting and its relationship with other business functions Audit and internal control People management issues Effectiveness and communications Professional ethics in the business environment vii FAB/F1 ACCOUNTANT IN BUSINESS Brought forward knowledge There is no assumed brought forward knowledge for this paper Approach to examining the syllabus Paper FAB/F1 is a two-hour paper It can be taken as a written paper or a computer based examination The questions in the computer based examination are objective test questions or multiple task questions – multiple choice, number entry, multiple response, multiple response matching, picklists and hotspots (See page xxiii for frequently asked questions about computer based examinations.) The written examination is structured as follows: 16 one mark objective test questions 30 two mark objective test questions four mark multiple task questions (One on each area of the syllabus) viii Number of marks 16 60 24 INTRODUCTION ix EXAM QUESTION AND ANSWER BANK 70 D The Plant solves more conceptual, strategic problems for the team The Shaper is a leader, but uses dynamism and challenge The Co-ordinator pulls the team together, but more as organiser or chairperson It is the team worker who fulfils the relationshipmaintenance function (Chapter 14) 71 C Forming is the ‘coming together’ stage, followed by conflict (storming) as roles and goals are tested, settling down (norming) as ways of working together are developed, and finally focus on the task (performing) (Chapter 14) 72 C You should be able to describe the other group processes as well (Chapter 14) 73 A This is the best answer A chairperson will be justified in cutting short a speaker who has nothing new to say and says it at great length Brisk progress through the agenda is one mark of good meeting conduct Some people may only need to be present for part of the meeting and it is a waste of their time to insist on their presence throughout (Chapter 14) 74 A Expectancy theory is a process theory, because it explores the process or ‘calculation’ by which outcomes become desirable and are pursued by individuals Content theory focuses on the ‘package’ of needs or desired outcomes that motivate people (eg Herzberg’s and Maslow’s models) (Chapter 15) 75 D McGregor’s Theory X/Y accounts for the motivational approach of managers, based on their assumptions about their subordinates You should be able to identify the other theories as two-factor theory, hierarchy of needs and expectancy theory respectively (Chapter 15) 76 C PRP is not an element of job design: nor is it directly related to job satisfaction The five core dimensions are skill variety, task identity, task significance, autonomy and feedback: any or all of these can be increased in a job to increase employee satisfaction and commitment (Chapter 15) 77 A Rationale: Theory X is the managerial assumption that most people dislike work and responsibility and avoid them if possible Managers use coercion and control to manage staff Theory Y is the managerial assumption that people can be motivated to accept challenge and responsibility and contribute willingly to the firm This results in quite a different management style (Chapter 15) 78 (a) C (b) Theory X 79 D Methods of learning-by-doing suit both Activists and Pragmatists, but Pragmatists have the additional preference for practical, job-related problem-solving Theorists and Reflectors prefer to conceptualise or observe before applying learning (Chapter 16) 80 B On-the-job learning supports application of learning to the job (transfer of learning) far better than off-the-job learning However, it is subject to the distractions and pressures of work, is not easy to standardise for large numbers of trainees, and creates the risk of poor initial performance and experimentation in real-work situations (Chapter 16) 81 C Trainee reaction or satisfaction is level 1; trainee learning is level 2; changes in job behaviour (ie application of learning) is level 3; and impact on goals/results is level (Chapter 16) 82 B Rationale: Conditioning may have sounded familiar if you only read as far as ‘modification of behaviour’, but it involves specific repetition-and-reward techniques Education is the gradual acquisition of knowledge, by learning and instruction, often leading to qualifications Development is a wider experience of the growth or realisation of a person’s ability and potential through a wide range of learning experiences Meredith fulfils the criteria of a monitor-evaluator Theory X suggests that people dislike work and want to avoid responsibility They need to be closely supervised and motivated by ‘carrot and stick’ techniques (Chapters 14 and 15) Pitfalls: This kind of related terminology lends itself to exam questions Training, education and development all involve ‘learning’, but the learning experiences are of different types, and with different overall aims (Chapter 16) 538 EXAM ANSWER BANK 83 B Rationale: The learning cycle is experiential learning or ‘learning by doing’ ‘Action learning’ sounds similar, but is actually a specific learning method by which managers are brought together as a problem-solving group to discuss real work issues Programmed learning is highly structured learning, which doesn’t apply here (Chapter 16) 84 A The key objective of performance appraisal is performance improvement, through feedback, problem-solving and development planning This is often not directly related to reward and/or promotion planning While retrospective feedback is one tool of appraisal, it is not regarded as an end in itself (Chapter 17) 85 C Overall assessment is an unguided narrative evaluation; guided assessment a comment on specified characteristics and performance elements; and a results-oriented scheme a review of performance against specific targets and standards agreed in advance by the assessor and assessee (Chapter 17) 86 C The three options are listed in decreasing order of interviewer dominance and critical role, using Maier’s popular classification (Chapter 17) 87 B Tactical (Note that 'clan control' is a type of control strategy: not a level of control) (Chapter 17) 88 C Upward appraisal (Chapter 17) 89 B Fred is not delegating tasks to his team: this is an important aspect of time management The mini-scenario indicates that Fred plans, focuses and prioritises well (Chapter 18) 90 A This can be identified as coaching because it is short-term, job-specific and carried out by the immediate supervisor: unlike mentoring, which is long-term, broad in focus and often carried out by an off-line mentor Counselling is a specific intervention in the case of personal or disciplinary problems, rather than directly addressing skill improvement (Chapter 18) 91 C Rapport is the term for establishing a ‘connection’ between yourself and another person, which generally facilitates communication: it involves a range of verbal and non-verbal communication techniques Distortion refers to a fault in the ‘coding’ or ‘decoding’ of a message; noise to interference in the transmission or receipt of a message; and jargon to the use of technical vocabulary which non-users cannot understand (Chapter 18) 92 A Act, Bin, Create, Delegate This is a useful shorthand for remembering good advice on managing what can be mountains of paper! (Chapter 18) 93 A, B Answer C could also be correct in the sense that if a piece of work is important, that makes it high priority The Chairman's involvement may make it high priority Answer D does make the work high priority for you but not necessarily for the organisation (Chapter 18) 94 D Neither party gets what they want (Chapter 18) 95 D The point of this question is to emphasise that all disciplinary issues should be properly investigated After proper investigation and a disciplinary hearing, any of the usual sanctions may be appropriate (Chapter 18) 96 False: this is a disciplinary action (Try and define 'grievance' yourself) (Chapter 18) 97 D Little is certain in employment law but on the face of it, this would seem to be a case of constructive dismissal It may also turn out to be unfair dismissal Wrongful dismissal is unlikely as the employer may not have actually breached the contract of employment It may emerge on investigation that the bad treatment of the employee was the result of one of the automatically unfair reasons for dismissal, such as membership of a trade union However, on the facts we are given, option D is the best answer (Chapter 18) 539 EXAM QUESTION AND ANSWER BANK 98 The correct answer is: Order Task 1st task (10am to 12 noon) Enter sales invoices/credit notes into computer system 2nd task (12 noon to 1pm) Enter weekly purchase invoices into the computer 3rd task (2pm to 4pm) (20 × mins = 120 mins) Match purchase invoices to goods received notes and pass to the accountant for authorisation 4th task (4pm to 5pm) Filing The sales invoices and credit notes need to be entered into the computer system by midday and so take priority Next enter the purchase invoices into the computer, so that the report is available for Manesh’s colleague by 2pm The 3rd priority is to match the purchase invoices to the GRNs before the end of today, Friday, so that they are ready for the accountant first thing on Monday morning Any time left can then be spent on filing (Chapter 18) 99 (a) C This is the classic Y pattern (b) Win-win 100 D Utilitarianism is based on the outcomes or consequences of actions Deontology is based on duty: categorical imperatives are the ‘rules’ by which duty (or moral responsibility) can be judged Legalism is based on the agreed rules or laws laid down by a group or society (Chapter 19) 101 C Independence in appearance is being seen to be independent or objective: it is an additional requirement to being objective in fact (independence of mind) – and nothing to with freedom from supervision (or autonomy) (Chapter 19) 102 (a) Freda has won because she will be able to limit the disruption to her work Lisa has also won because she will receive proper training (Chapter 18) Yes No Openness  Honesty  Accountability  Integrity  Objectivity  Accountability refers to whether an organisation is responsible for the consequences of their actions and this is very much to the point in this case Openness means disclosing relevant information which may affect decisions to stakeholders If TUV decide to incur the costs of a clean up, then this concept may come into play later Honesty means not only telling the truth but not misleading stakeholders Again this concept may come into play at a later stage Integrity means straight forward dealing and completeness, so this is an issue here Objectivity means that all choices are made purely on merit (b) 540 B The self-interest threat may arise because the director’s wife is on the Board of the supplier This may lead to contracts being made with her firm regardless of which supplier would actually be better for the business (Chapter 19) Index 541 INDEX 542 INDEX Note: Key Terms and their page references are given in bold 360 degree appraisal, 428 5M, 88 A conflict of interest, 499, 500, 506 Absolutism, 481 ACCA Code of Ethics and Conduct, 487 Accommodation strategy, 191 Accountability, 245, 292, 477, 486 Accounting, 201 Accounting packages, 226 Accounting Standards Board (ASB), 210 Action-centred leadership, 309 Activists, 397 Actual and threatened litigation, 497 Ad hoc committees, 172 Ad valorem tax, 76 Adair, 308, 309 Administration, 157 Advocacy threat, 495 Agency concept, 179 Agency theory, 180 Aggregate demand, 60, 61 Aggregate supply, 61 Analogue, 440 Anthony hierarchy, 140 Anthony's hierarchy, 168 Apollo, 166 Appearance and finish, 35 Applied research, 147 Appraisal barriers, 426 Appraisal procedures, 421 Appraisal system, 421 Aptitude tests, 333 Arc elasticity of demand, 95 Archiving, 255 Artefacts, 164 Ashridge studies, 305 Ashridge See Assets, 212 Assumptions, 164 Athena, 166 Attainment tests, 333 Attitude, 164, 356 Audit Audit committee, 189, 497 Audit trail, 256 Auditing, 208 Authority, 291, 292 Back-up, 254 Back-up controls, 254 Balance of payments, 64, 80 Bargaining power, 52 Behaviour, 164 Belbin, 362 Beliefs, 164 Bennis, 310 Black marketeers, 113 Blake and Mouton's Managerial Grid, 305 Board, 184 Bonus schemes, 389 Books of prime entry, 201 Boom, 63 Boundaryless organisation, 134 Budget, 75 Business cycle, 63 Business strategy, 138, 139 C adbury committee, 182 Capital, Capital expenditure, 217 Capital markets, 158 Centralisation, 140 Centralised processing, 40 Ceteris paribus, 94 chair, 172 characteristics of, 241 Chartered Institute of Personnel and Development, 324 Child, 383 Circular flow of income, 58 Close business relationships, 490 Club culture, 167 Coaching, 444 Code of ethics, 487 Coding, 227 Coercive power, 293 Commercial organisations, Committees, 171 Communication, 449, 454 Communication methods, 467 Company law, 209 Company secretary, 185 Competence, 320 Competition, 116, 449 Competitive forces, 47 Complements, 94 Compliance tests, 244 Compliance-based approach, 486 Computer fraud, 269 Computerised accounting systems, 226 Conditions of demand, 102 Confidence, 377 Confidentiality, 447, 502 Conflict, 449 Conflict of interest, 502 Conflict resolution, 505 Conflicts of interest, 489, 500 Connected stakeholders, 11 Consensus theory, 479 Consumer Prices Index (CPI), 65 Consumer surplus, 110 Consumers, 135 543 INDEX Content theories, 378 Contingency, 257 Contingency theory, 307, 308 Contingent fees, 492 Contingent work force, 135 Control environment, 237, 238 Control procedures, 237, 238 Control total, 241 Controlling, 459 Controls, 220, 224 Controls over payments, 225 Co-operative societies, Co-ordination, 449 Corporate (Social) Responsibility policies, 498 Corporate finance, 495 Corporate governance, 178 Corporate Responsibility Reports, 498 Corporate social responsibility, 191 Corporate strategy, 138 Corporate values, 500 Cost push inflation, 66 Counselling, 445 Credit unions, 10 Cross elasticity of demand, 99 Cultural trends, 38 Culture, 163 Customer departmentation, 130 Customer value, 89 Cyclical unemployment, 68 Cyert and March, 479 D ata, 458 Data integrity, 253 Data protection, 29 Data Protection Act, 29 Data Protection Principles, 30 Data subject, 29, 30 Data users, 29 Decentralisation, 140 Decentralised processing, 40 Decision making, 459 Decisional role, 300 Defence strategy, 191 Deflationary gap, 62 Delayering, 39, 136, 137 Delegation, 292 Demand, 91, 95 Demand curve, 92 Demand pull inflation, 66 Demand schedule, 91 Deontology, 481 Departmental power, 294 Departmentation, 128 Depression, 63 Derived demand, 90 Determinants of culture, 164 Development, 147, 400, 411 Difference, 449 Digital, 440 Dionysus, 166 Direct discrimination, 343 544 Direct tax, 76 Directors, 7, 185 Disaster recovery plan, 257 Discipline, 377 Discrimination, 342 Dismissal, 27 Dispersed leadership, 310 Distribution of income, 101 Diversity policy, 347 Divisionalisation, 131 Dorming, 365 Double-entry bookkeeping, 202 Drucker, 299 Dumping, 114 Durability, 35 Duty and consequences, 480 Ecological footprint, 44 Economic order quantities, 149 EDI, 440 Education, 400 Egoism, 480 Elasticity, 95 Electronic Data Interchange (EDI), 440 Employment with assurance client, 490 Empowerment, 384 Entrepreneurial structure, 132 Environmental analysis, 21 Environmental costs, 44 Environmental footprint, 44 Environmental scanning, 458 Equal opportunities, 29, 342 Equilibrium price, 109, 118 Ethical dilemmas, 499, 500, 506 Ethical tensions, 500 Ethics, 480 Ethics and contractual obligations, 500 Ethics in business, 497 EU, 26 Evaluation of training, 411 Exchange rate, 78 Executive committees, 172 Executive directors, Expenditure, 212, 232 Expert power, 293 External audit, 248 External stakeholders, 12 Extrinsic rewards, 383 Fairness, 476 False description, 35 Family and personal relationships, 491 Fayol, 296 Feedback, 386 Fiduciary responsibility, 479 Fiedler, 308 Finance function, 157 Financial accounting, 159, 206 Financial Controller, 205 Financial interests, 490 INDEX Financial management, 207 Financial Reporting Council, 210 Financial Reporting Review Panel, 210 Financial statements, 212 Financial systems, 218 Firms, 90 Fiscal policy, 75, 79 Fitness of goods for a disclosed purpose, 35 Five competitive forces, 22, 51 Flat organisation, 39, 136 Flat structures, 133 Flexible firm, 134 Floor price, 114 for the organisation, 269 Formal communication processes, 461 Formal groups, 358 Forming, 365 Fraud, 262 Freedom from minor defects, 35 Frictional unemployment, 68 Functional strategy, 138, 140 GAAP, 211 Generally Accepted Accounting Practice (GAAP), 211 Geographic departmentation, 129 Gifts, 491 Gods of Management, 166 Goldthorpe, Lockwood et al, 388 Goleman, 357 Governance principles, 180 Grievance, 454 Gross National Product, 69, 82 Group, 358 Group norms, 126 Group think, 361, 368 H amblin, 411 Hampel report, 181 Handy, 134, 166, 293 Harrison, 166 Hawthorne studies, 298 Hawthorne Studies, 126 Health and safety, 31 Heifetz, 310 Herzberg, 384 High percentage of fees, 492 Hofstede, 163 Hofstede Model, 169 Hollow organisation, 134 Honesty, 477, 486 Honey and Mumford, 397 Horizontal structures, 133 Hospitality, 491 Households, 90 Human Resource Management (HRM), 161 Human resources department, 214 Hybrid structures, 132 Hygiene factors, 380 Imperfect competition, 116 implications, 269 Implied terms, 34 Inbound logistics, 49 Incentive, 383 Income, 212, 232 Income and expenditure account, 212 Income elasticity of demand, 98, 118 independence, 245 Independence, 245 Indirect discrimination, 343 Indirect discrimination, 38, 343 Indirect tax, 76 Individualism, 170 Induction, 409, 413 Inferior goods, 98, 100 Inflation, 64 Inflationary gap, 62 Informal groups, 358 Informal organisation, 124 Information, 458 Information systems, 39 Information technology, 440 Informational role, 300 Input controls, 253 Inseparability, 151 Intangibility, 151 Integrated reports, 204 Integrated software, 228 Integrity, 478 Integrity, 485 Integrity-based approach, 486 Intellectual property, Intelligence, 357 Intelligence tests, 333 Interest rates, 78 Internal audit, 242 Internal audit services, 495 Internal checks, 240 Internal control, 236 Internal control system, 237 Internal controls, 208 Internal stakeholders, 11 International Accounting Standards Board, 210 International Federation of Accountants (IFAC), 487 International trade, 26 Interpersonal role, 300 Interpersonal skills, 463 Interviews, 328 Intimidation threat, 496 Intrinsic rewards, 383 Involve me model, 498 IPD Recruitment Code, 324 IT services, 495 Job description, 321 Job description, 321 Job enlargement, 385 Job enrichment, 384 545 INDEX Job rotation, 385 Jobless structures, 134 Joint committees, 172 Joint Money Laundering Steering Group, 280 Judgement, 478 Kant, 481 King report, 181, 185 Kolb, 398 Kotler, 151 Kotter, 302 L eadership, 302, 486 Leadership style, 304 Learning cycle, 398 Learning organisation, 399 Learning process, 396 Learning styles, 397 Learning theory, 396 Leavitt, 455 Legal services, 495 Liabilities, 212, 213 Limited liability, Listening, 464 Litigation support, 495 Living Planet Index, 44 Loans and guarantees, 491 Lockett, 426 Long association of senior personnel with assurance clients, 496 Long run supply curve, 105 Lowballing, 492 M acro-economic policy, 58 Macroeconomic policy objectives, 72 Maier, 424 Maier, 425 Management, 290, 302 Management (or cost) accounting, 207 Management Accountant, 205 Management accounting, 160 Management committees, 172 Managerial grid, 306 Managerial styles, 305 Managing conflicts, 450 Managing diversity, 347 Manual accounting, 226 Marginal utility, 90 Market, 90 Market clearing price, 109, 118 Market demand, 101 Market demand curve, 93 Market supply curve, 106 Marketing, 49, 152 Marketing mix, 154 Masculinity, 170 Maslow, 379 Matrix organisation, 132 Maximum prices, 112 546 Mayo, 298 McGregor, 382 Mendelow, 13 Mentoring, 444 Middle line, 127 Minimum price legislation, 114 Minimum prices, 114 Minimum wages, 115 Mintzberg, 127, 132, 300 model, 444, 445, 461, 464, 468 Modular organisation, 134 Module, 228 Monetary policy, 77, 79 Money laundering, 277 Money markets, 158 Monopolistic competition, 117 Monopoly, 116 Monsanto, 46 Morale, 377 Motivation, 376 Mourning/adjourning, 365 Multiplier effect, 60 Multi-skilled teams, 361 Mutual associations, 10 Myers Briggs Type Inventory, 354 N egative power, 293 Neo-human relations school, 298 Nomination committee, 186 Non-commercial undertakings, 203 Non-current assets, 217 Non-executive directors, 7, 187 Non-governmental organisation, Normal goods, 98, 100 Norming, 365 Norms, 126 Not for profit organisations, 212 Not-for-profit organisations, O bey me model, 498 Objectivity, 486, 502 Offshoring, 137 Oligopoly, 117 Openness, 486 Openness/transparency, 476 Operating core, 127 Operational audits, 244 Operational management, 140 Operational strategy, 138 Operations, 49 Organisation, 4, 241 Organisation culture, 165 Organisation structure, 39, 127 Organisational authority, 291 Other services, 494, 495 Outbound logistics, 49 Output controls, 254 Output-focused structures, 134 Outsourcing, 42, 137 Overdue fees, 492 INDEX Overheads, 216 Overt discrimination, 38 Over-valuation of inventory, 264 Ownership, 151 Pacioli, 202 Partner on client board, 491 Partnerships, Passwords, 255 Payables ledger system, 221 Payroll system, 218, 219 Pedler, Burgoyne & Boydell, 447 Percentage or contingent fees, 492 Perception, 355 Perfect competition, 116 Performance appraisal, 420 Performance management, 418 Performance related pay, 388 Performing, 365 Person culture, 167 Personal data, 29 Personal development, 447 Personal development plan, 405, 447 Personal values, 500 Personality, 354 Personality tests, 333 Personality traits, 354 PEST, 22 Peters, 128 Physical power, 293 Planning, 458 Point elasticity of demand, 96 Political and legal environment, 23 Political risk, 26 Porter, 22, 51 Position power or legitimate power, 293 Positioning-based strategies, 47 Post-list, 241 Power, 292 Power culture, 167 Power distance, 169 Pragmatists, 397 Pre-list, 241 Price ceiling, 112 Price elasticity of demand, 95 Price mechanism, 109 Price mechanism, 118 Price mechanism, 90 Price regulation, 112 Price theory, 90 Primary goal, Prioritisation, 437 Privacy, 29 Private sector, Proactive strategy, 191 Probity/honesty, 477 Process research, 147 Process theories, 378, 381 Processing controls, 254 Procurement, 50 Product departmentation, 129 Product orientation, a variant, 154 Product research, 147 Production, 49, 150 Production quotas, 114 Professional competence and due care, 501 Professional core, 135 Professional qualities, 489 Professional values, 500 Proficiency tests, 333 Profit or loss account, 212 Profit-sharing schemes, 390 Project, 295 Prove to me model, 498 Psychologically Close Managers (PCMs), 308 Psychologically Distant Managers (PDMs), 308 Psychometric testing, 333 Public interest companies, 493 Public limited companies, Public oversight, 184 Public sector, 6, Purchases and sales cycles, 221 Purchasing, 50, 148 Purchasing department, 214, 216 Purchasing mix, 149 Pure research, 147 Quality control review, 491 Radio signal model, 461 Rate of unemployment, 67 Rationality, 90 Rationing, 113 Raw materials costs, 106 Reactive strategy, 191 Receivables ledger system, 223 Recent service with an assurance client, 493 Recession, 63 Recovery, 63 Recruitment, 316, 493 Recruitment and selection, 346 Recruitment policy, 323 Recruitment process, 319 Redundancy, 28 Rees, 445 Referent power, 293 Reflectors, 397 Regulatory system, 209 Relativism, 481 Remuneration committee, 189 Reputation, 478 Reputation risk, 46 Research and development, 147 Resignation, 27 Resolution of ethical conflicts, 503 Resource power, 293 Resource-based strategies, 47 Responsibility, 477 Restrictive practices, 117 Retail Prices Index, 65 Retained earnings, 158 547 INDEX Retirement, 27 Reward, 383 Reward power, 293 Right to sell the goods, 34 Risk committee, 190 Role culture, 167 RPIX, 65 RPIY, 65 Safety, 35 Sale of goods, 34 Sarbanes-Oxley Act 2002, 184 Satisfactory quality, 35 Scalar chain, 136 Schein, 163, 164, 311 Scientific management, 297 Seasonal unemployment, 68 Second opinions, 497 Secondary goal, secretary, 172 Security, 250, 253, 258 Security controls, 253 Segregation of duties, 273 Selection, 316 Selection process, 326 Selection testing, 333 Self development, 447 Self-appraisals, 424 Self-employed professionals, 135 Self-interest threat, 489 Selflessness, 485 Self-review threat, 493 Seller's title, 34 Service, 49, 151 Service marketing, 156 Set-aside, 114 Seven Principles of Public Life, 485 Shamrock organisation, 134 Shamrock organisation, 134 Share capital, Shared services, 138 Shareholders, Short run supply curve, 104 Simple structure, 132 Social and demographic trends, 36 Social attitudes, 482 Social class, 37 Social impacts, 45 Social responsibility, 191, 192 Societal values, 500 Sole traderships, Sources of finance, 158 Span of control, 39, 135 Specific tax, 76 Spotting an ethical dilemma, 501 Spreadsheet, 231 Stagflation, 62 Stakeholder conflict, 13 Stakeholder theory, 180 Stakeholder view, 192, 479 Stakeholders, 10, 45 548 Standing committees, 172 Status, 449 Statutory minimum wage, 115 Stewardship theory, 179, 180 Storming, 365 Strategic apex, 127, 132 Strategic management, 140 Strategy, 138 Structural unemployment, 68 Sub-committees, 172 Substantive tests, 244 Substitutes, 94 Supervision, 301 Supply, 103 Supply curve, 104 Supply of services, 34 Supply schedule, 104 Support staff, 127 Supra-national bodies, 74 Sustainability, 204 SWOT analysis, 47 Synergy, Systems audit, 244 Systems integrity, 253 Tactical management, 140 Tall organisation, 39, 136 Task culture, 167 Taxation, 76 Taxation services, 495 Taylor, 297 Team, 360 Team building, 366 Team development, 365 Team effectiveness, 368 Team roles, 362 Team-based rewards, 369 Technological developments, 106 Technology impact on organisations, 39 Technostructure, 127 Teeming and lading, 225, 263 Tell and listen method, 425 Tell and sell method, 425 Temporary staff cover, 495 Theorist, 397 Theory X, 382 Theory Y, 382 Time management, 435 Time of performance, 34 Trade cycles, 63 Trade Descriptions Act 1968, 35 Training, 400 Training methods, 406 Training needs, 404 Trait theory, 304 Transactions audit, 245 Transparency, 476 Treasurer, 205 Treasury, 159 Treasury management, 159 True and fair view, 211 INDEX Trust me model, 498 Tuckman, 365 Turnbull, 237 types of, 244 U ncertainty avoidance, 169 Unemployment, 67 Universality of management principles, 296 Unprofessional behaviour, 502 Upward appraisal, 427 Urgent Issues Task Force, 210 Utilitarianism, 480 Utility, 90 V alence, 381 Validation of training, 411 Valuation, 494 Valuation, 494 Valuation services, 494 Value activities, 48 Value activities, 48 Value chain, 48, 49 Value network, 50 Value network, 50 Variability, 151 Victimisation, 343 Victimisation, 343 Virtual organisations, 134 Vroom, 381 Whistleblowing, 275, 486 Work demands, 449 Work planning, 294 Working capital, 159 Working style, 449 World Trade Organisation (WTO), 27 Zeus, 166 549 INDEX 550 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