One of a suite of products supporting Paper P1 Governance, Risk and Ethics, for use independently or as part of a package, this Kit is targeted at ACCA’s exams in September 2016, December 2016, March 2017 and June 2017 and contains: • Banks of questions on every syllabus area • Answers with detailed guidance on approaching questions • Three mock exams with full answers and guidance Practice & Revision Kit Paper P1 Governance, Risk and Ethics This Kit provides material specifically for the practice and revision stage of your studies for Paper P1 Governance, Risk and Ethics that has been comprehensively reviewed by the ACCA examining team This unique review ensures that the questions, solutions and guidance provide the best and most effective resource for practising and revising for the exam Governance, Risk and Ethics 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 ACCA P1 ACCA approved content provider ACCA APPROVED CONTENT PROVIDER ACCA Approved Practice & Revision Kit BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia February 2016 £18.00 ACP1RK16 (HO).indd 1-3 For exams in September 2016, December 2016, March 2017 and June 2017 Contact us Paper P1 Governance, Risk and Ethics Free access to our Exam Success site Look inside For exams in September 2016, December 2016, March 2017 and June 2017 16/02/2016 12:07 ACCA APPROVED CONTENT PROVIDER As the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark for producing exceptional study materials for students and tutors alike Our Study Texts, Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what is required for exam success EXAM SUCCESS SITE To help maximise your chances of succeeding in your exams, we’ve put together a suite of exclusive ACCA resources Our Exam Success site provides you with access to a free digital version of this publication, as well as extra resources designed to focus your efforts on exams and study methods To access the Exam Success site, please email learningmedia@bpp.com with the subject line “Access to Exam Success site - eBook”, including your order reference number and the name of the book you’ve bought (ie ACCA F5 Study Text) for your access code Once you have received your code, please follow the instructions below: To access the BPP ACCA Exam Success site for this material please go to: www.bpp.com/ExamSuccessSite n Create a user account if you don’t already have one Make sure you reply to the confirmation email n Log in using your registered username and password Select the paper you wish to access n Enter the code you received when prompted You will only have to this once for each paper you are studying PAPER P1 GOVERNANCE, RISK AND ETHICS BPP Learning Media is an ACCA Approved Content Provider for the ACCA qualification This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams In this Practice and Revision Kit, which has been reviewed by the ACCA examination team, we: Discuss the best strategies for revising and taking your ACCA exams Ensure you are well prepared for your exam Provide you with lots of great guidance on tackling questions Provide you with three mock exams Provide the ACCA exam answers as well as our own for selected questions Our Passcards also support this paper FOR EXAMS IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017 P R A C T I C E & R E V I S I O N K I T First edition 2007 Tenth edition February 2016 A note about copyright ISBN 9781 4727 4442 Dear Customer (previous ISBN 9781 4727 2692 6) What does the little © mean and why does it matter? 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Contents Page Finding questions Question index iv Topic index vi Helping you with your revision ix Revising P1 Topics to revise x Reading articles x Question practice x Passing the P1 exam xi Exam information xvii Useful websites xx Questions and answers Questions Answers 73 Exam practice Mock exam Questions 313 Plan of attack .319 Answers .321 Mock exam Questions 339 Plan of attack .345 Answers .347 Mock exam (ACCA September/December 2015 Exam) Questions 363 Plan of attack .371 Answers .373 Review form Contents iii Question index The headings in this checklist/index indicate the main topics of questions, but questions are expected to cover several different topics Time Page number Ins Marks allocation Question Answer Mins Part A: Governance and responsibility PKG High School 25 49 73 Sentosa House (Examiner question) 25 49 76 Frank Finn (Pilot paper) 25 49 79 Seamus O'Brien (12/07) 25 49 82 West vs Leroi (6/08) 25 49 85 TQ (6/09) 25 49 88 Tomato Bank (6/10) 25 49 91 KK (12/10) 25 49 94 HHO (6/11) 25 49 97 10 Geeland (12/11) 25 49 100 11 Dale Gas (12/11) 25 49 10 103 12 Lum (6/12) 25 49 11 106 13 Oland (12/12) 25 49 12 109 14 Sarbanes-Oxley (12/13) 25 49 12 112 15 Help-with-life (12/13) 25 49 13 115 16 Chambon (12/14) 25 49 13 118 17 New Ideas Company (12/14) 25 49 14 121 18 Hafnium Company (6/15) 25 49 15 123 19 Southern Continents (12/07 amended) 25 49 16 126 20 H & Z (6/09) 25 49 16 129 21 YGT (6/11) 25 49 17 133 22 Zogs (6/12) 25 49 18 136 23 Dubland (6/13) 25 49 19 140 24 Franks & Fisher (Examiner question) 25 49 19 143 25 Gluck and Goodman (12/08) 25 49 20 146 26 Saltoc (12/09) 25 49 21 149 27 COSO (6/10) 25 49 21 152 28 Yaya (12/12) 25 49 22 154 29 Blup (6/13) 25 49 23 157 30 Bob Wong (6/14) 25 49 23 160 31 Loho Company (12/14) 25 49 24 162 Marks allocation Mins Question Answer 32 Environmental and social issues 25 49 25 165 33 Practice question: David Hunter 25 49 25 167 Part B: Internal control and risk Time In Page number Part C: Professional values and ethics iv Question index Time In Page number Marks allocation Mins Question Answer 34 JH Graphics (Examiner question) 25 49 26 170 35 Football club (12/07) 25 49 27 172 36 Anne Hayes (6/08) 25 49 27 175 37 Hogg Products (12/08) 25 49 28 178 38 Policy speech (6/09) 25 49 29 182 39 John Wang (12/09) 25 49 30 184 40 Happy and healthy (6/10) 25 49 30 187 41 JGP (12/10) 25 49 31 190 42 Ann Koo (6/11) 25 49 32 193 43 Biggo (12/11) 25 49 32 195 44 Jojo (6/12) 25 49 33 198 45 RDC (12/12) 25 49 34 201 46 Lobo (12/13) 25 49 35 204 47 Hum and Hoo (6/14) 25 49 35 206 48 Mahmood (6/14) 25 49 36 209 49 Rosey and Atkins (6/15) 25 49 37 210 50 Pulpo (6/15) 25 49 37 214 51 Chemco (Pilot paper) 50 97 39 217 52 Worldwide Minerals (12/07) 50 97 40 223 53 Rowlands and Medeleev (6/08) 50 97 41 228 54 Swan Hill (12/08) 50 97 43 233 55 Global-bank (6/09) 50 97 44 239 56 Mary Jane (12/09) 50 97 46 244 57 Hesket Nuclear (6/10) 50 97 47 249 58 ZPT (12/10) 50 97 50 254 59 Bobo (6/11) 50 97 52 260 60 Coastal Oil (12/11) 50 97 53 265 61 Hayho (6/12) 50 97 55 272 62 P & J (12/12) 50 97 57 277 63 Hoppo (6/13) 50 97 59 282 64 Wyland (12/13) 50 97 61 287 65 World Justice (6/14) 50 97 63 292 66 Cheapkit (12/14) 50 97 65 296 67 Lysus (6/15) 50 97 67 301 Part C: Professional values and ethics Section A questions Mock exam page 311 Mock exam page 337 Mock exam (September/December 2015 Exam) page 361 Question index v Topic index Listed below are the key Paper P1 syllabus topics and the numbers of the questions in this Kit covering those topics If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful vi Syllabus topic Question numbers Absolutist approach 36(c), 58(b) Accountability 4(b), 13(c), 54(d), 61(d), 66 Accountancy as a profession Mock Q2(c) Agency 1(d), 2(a), 14, 49, 55(c), 57(c), 61(d), Mock Q2(a), Mock Q1 ALARP 60(c) American Accounting Association model 33(a), 56(a), 61(b) Audit committee 9(c), 25(c), 29(b), Mock Q4(b) Board committees 18 Board of directors 1, 4, 12, 13(c), 51, 56, 67, Mock Q4 Bribery and corruption Mock Q4 Chairman 4, 6, 10(b) Charities 9, 15 Chief executive 4, 9(a), 10(b), 11(a), 17, 55(e), 59(d) Conflicts of interest 3, 8a), 17, Confidentiality 53(d), 54, 56(a) Continuing professional development 12(b), 31 Control environment Mock Q1(a) Corporate citizen 66, Mock Q2 Corporate ethical codes 34, 37, 60(a) Corporate governance 1-13, 40(a), 49, 51, 52, 58, 65, 67, Mock Q1, Mock Q4, Mock Q1, Mock Q2 Corporate governance codes 2(d), 4(c), Corporate governance concepts 13(c), Corporate social responsibility 49 Deontological approach 37(c), 63(d), Mock Q3(c), Mock Q4 Directors' remuneration 3, 6(c), 7, 11(a), 19(c), Mock Q1(d), Mock Q1 Directors' vacation of office 6(a) Diversity 15, Employee responsibilities 36, Mock Q2(c) Entrepreneurial risk 20(c) Environmental auditing 41(b), 47 Environmental issues 41, 51(e), 53(d), 57(d), 60, Mock Q1 Environmental reporting 32, 47, 51(e), 60(b), 63(b), Mock Q1(c) Topic index Syllabus topic Question numbers Ethics 7(c), 15, 32-45, 47, 51, 52, 54-56, 58-61, 63(d), 65, Mock Q1, Mock Q2, Mock Q1(d), Mock Q3 Ethical theories 34 36(c), 37(c), 50, Mock Q3 External auditors 26(c) Fiduciary duty 23(b), 35(c), 66 Financial risks 23(c), 30, 58(c),Mock Q4(a) General meetings 59(c) Gray, Owen, Adams approaches on social responsibility 35(b), 38(c), 43, 54(c), 59(d), Mock Q1(b) Independence 22(a), 24, 36 Induction programme 12(b) Information provision 1(b), 28(c), 32(c), 56(d) Insider dealing 42(c) Insider-dominated businesses 40(a) Institutional investors 2(b), 58(a), 65 Integrated reporting 32(d), 50, 66, Mock Q2 Integrity 39(a), 63(d), Mock Q3(b) Internal audit 31-33, 27(c), 29, 64 Internal control 1(c), 5, 25, 27-29, 31, 52(d), 53(e), 55(b), 56, 5863, 64, Mock Q2, Mock Q4, Mock Q1 Kohlberg's theories 34(b), 48, 52(b), 55(a), 59(b) Market risk 11(b), 25(c) Nomination committee 15, Mock Q2(b) Non-executive directors 3, 8, 12(b), 17, 22(a), 51(d), 52(c), 56(c), Mock Q3(c) Objectivity 24(d) Operational risks 41(c), 54(b), 62(d), Mock Q1(c), Mock Q3 Principles-based approach 2(d), 5(a), 10, 13(b), 27(a), Mock Q1(b) Professional ethics codes Mock Q3 Professional responsibilities 36, 39, 40, 42, 62(c), Mock Q2(c) Proxy voting 11(c) Public interest 38, 42(b), 47, 67 Public sector 1, 11, 15, 16 Relativist approach 36(c), 58(b), Mock Q4 Remuneration committee 3(a), 7(a), 64 Reporting 5, 8(c), 10(c), 32, 54(d), 58(c), 60(b), Mock Q4(c) Reputation risk Mock Q2(b), Mock Q1 Retirement by rotation Mock Q2(c) Risk appetite 30, 61(a), Mock Q3 Risk assessment 19-23, 51(b), 53, 57(d), 60(c), 62(d), 67, Mock Q2(b), Mock Q3 Risk audit 26(c), 65 Topic index vii viii Syllabus topic Question numbers Risk committee 2(c), 22, Mock Q3, Mock Q3 Risk correlation 21(c), 63(a) Risk culture 19(b), 21(d), 26, Mock Q4 Risk management 11(b), 50, 60(c), 62(b), 64, 67, Mock Q3, Mock Q4 Risk manager 20(a) Risk monitoring Mock Q4 Risk perception 60(c) Rules-based approaches 5(a), 10(a), 13(b), 14, 27(a) Sarbanes-Oxley 5(a), 48 Social issues 32, 57(d), 62(a) Social responsibility 15, 32, 43, 50, 54(c), 67, Mock Q1, Mock Q4(d) Stakeholders 32(c), 34, 35, 45, 53-55, 57(a), 61(d), 66, Mock Q1(a), Mock Q1 Strategic risks 41(c), 54(b), 62(d), Mock Q1(c), Mock Q3 Sustainability 41(a), 53(d), 64, Mock Q1(c) Technological risk 46 Teleological approach 37(c), 63(d), Mock Q3(c), Mock Q4 Trade unions 57(b) Transparency 9(b), 52(a), 54(c), 63(d) Tucker's question model 33(b), 45(a), 54(a) Whistleblowing 48 Topic index ... Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what... comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Practice & Revision Kit provides excellent, ACCA- approved support for your revision Tackling revision. .. an ACCA Approved Content Provider for the ACCA qualification This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams In this Practice and Revision Kit,