Paper P1: Governance, risk and ethics

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https://www.facebook.com/chiasetailieuACCA/ACCA APPROVED CONTENT PROVIDER ACCA Approved Practice & Revision Kit Paper P1 Governance, Risk and Ethics Practice & Revision Kit for exams from September 2015 to 31 August 2016 Free access to our Exam Success site Look inside https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ ACCA APPROVED CONTENT PROVIDER As the irst 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 ACCA F1/FIA FAB, ACCA F2/FIA FMA, ACCA F3/ FIA FFA and ACCA F4) 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 F7 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 conirmation 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 https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ P R A C T I C E 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  Ensure you are well  Provide you with  Provide you with  Provide the Our for revising and taking your ACCA exams for your exam & R E V I S I O N on tackling questions mock exams as well as our own for selected questions product also supports this paper FOR EXAMS FROM SEPTEMBER 2015 TO 31 AUGUST 2016 https://www.facebook.com/chiasetailieuACCA/ K I T https://www.facebook.com/chiasetailieuACCA/ First edition 2007 Ninth edition April 2015 ISBN 9781 4727 2692 (previous ISBN 9781 4727 1107 6) e-ISBN 9781 4727 2744 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 London W12 8AA www.bpp.com/learningmedia 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 Ltd We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated Printed in the United Kingdom by Ricoh UK Limited Unit Wells Place Merstham RH1 3LG © BPP Learning Media Ltd 2015 Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable, sustainable sources ii https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Contents Page Finding questions Question index v Topic index viii Helping you with your revision xi Revising P1 Topics to revise xii Reading articles xii Question practice xii Passing the P1 exam xiii Exam information xx Useful websites xxii Questions and answers Questions Answers 75 Exam practice Mock exam  Questions 337  Plan of attack .343  Answers .345 Mock exam  Questions 363  Plan of attack .369  Answers .371 Mock exam (December 2014)  Questions 387  Plan of attack .395  Answers .397 ACCA's exam answers  June 2014 413  December 2014 425 Review form https://www.facebook.com/chiasetailieuACCA/ iii https://www.facebook.com/chiasetailieuACCA/ A note about copyright Dear Customer What does the little © mean and why does it matter? Your market-leading BPP books, course materials and e-learning materials not write and update themselves People write them: on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media:  Photocopying our materials is a breach of copyright  Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply 'unlock' codes to people who have bought them second-hand And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? iv https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ 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 Taraton Area Council 25 45 75 MegaMart 25 45 77 PKG High School 25 45 80 LL 25 45 83 Sentosa House (Examiner question) 25 45 85 Frank Finn (Pilot paper) 25 45 88 Seamus O'Brien (12/07) 25 45 91 West vs Leroi (6/08) 25 45 95 TQ (6/09) 25 45 97 10 Sam Mesentery (12/09) 25 45 101 11 Tomato Bank (6/10) 25 45 10 104 12 KK (12/10) 25 45 11 107 13 HHO (6/11) 25 45 12 110 14 Geeland (12/11) 25 45 12 113 15 Dale Gas (12/11) 25 45 13 116 16 Lum (6/12) 25 45 14 119 17 Oland (12/12) 25 45 14 122 18 Boom (6/13) 25 45 15 125 19 Sarbanes-Oxley (12/13) 25 45 16 128 20 Help-with-life (12/13) 25 45 16 131 21 Gogone 25 45 17 134 22 Doctors' practice 25 45 17 136 23 Ceedee 25 45 18 139 24 Cerberus 25 45 19 141 25 B Bank 25 45 19 143 26 Southern Continents (12/07 amended) 25 45 20 146 27 H & Z (6/09) 25 45 21 149 28 YGT (6/11) 25 45 21 153 29 Zogs (6/12) 25 45 22 156 30 Dubland (6/13) 25 45 23 159 31 PNY 25 45 23 162 32 Franks & Fisher (Examiner question) 25 45 24 165 33 Gluck and Goodman (12/08) 25 45 25 168 34 Saltoc (12/09) 25 45 25 171 35 COSO (6/10) 25 45 26 174 36 Yaya (12/12) 25 45 27 176 37 Blup (6/13) 25 45 27 179 38 Bob Wong (6/14) 25 45 28 182 Part B: Internal control and risk https://www.facebook.com/chiasetailieuACCA/ v https://www.facebook.com/chiasetailieuACCA/ Time In Page number Marks allocation Mins Question Answer 39 Crawley Gossop 25 45 29 184 40 Environmental and social issues 25 45 29 187 41 Edted 25 45 30 189 42 CDC 25 45 30 192 43 Practice question: David Hunter 25 45 31 195 44 Penrice 25 45 32 197 45 JH Graphics (Examiner question) 25 45 32 199 46 Football club (12/07) 25 45 33 202 47 Anne Hayes (6/08) 25 45 34 205 48 Hogg Products (12/08) 25 45 34 208 49 Policy speech (6/09) 25 45 35 212 50 John Wang (12/09) 25 45 36 214 51 Happy and healthy (6/10) 25 45 36 217 52 JGP (12/10) 25 45 37 220 53 Ann Koo (6/11) 25 45 38 222 54 Biggo (12/11) 25 45 39 225 55 Jojo (6/12) 25 45 39 228 56 RDC (12/12) 25 45 40 231 57 Lobo (12/13) 25 45 41 234 58 Hum and Hoo (06/14) 25 45 41 237 59 Mahmood (06/14) 25 45 42 239 60 Wilberforce Humphries 50 90 43 241 61 Integrated Broadcasting Organisation 50 90 44 246 62 Chemco (Pilot paper) 50 90 46 251 63 Worldwide Minerals (12/07) 50 90 47 256 64 Rowlands and Medeleev (6/08) 50 90 48 262 65 Swan Hill (12/08) 50 90 50 267 66 Global-bank (6/09) 50 90 51 273 67 Mary Jane (12/09) 50 90 53 278 68 Hesket Nuclear (6/10) 50 90 54 283 69 ZPT (12/10) 50 90 57 288 70 Bobo (6/11) 50 90 59 295 71 Coastal Oil (12/11) 50 90 60 300 72 Hayho (6/12) 50 90 62 306 73 P & J (12/12) 50 90 64 312 74 Hoppo (6/13) 50 90 66 316 75 Wyland (12/13) 50 90 68 321 76 World Justice (06/14) 50 90 70 327 Part C: Professional values and ethics Section A questions vi https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Mock exam Mock exam Mock exam (December 2014) https://www.facebook.com/chiasetailieuACCA/ vii https://www.facebook.com/chiasetailieuACCA/ 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 Syllabus topic Question numbers Absolutist approach 47(c), 69(b) Accountability 1(c), 7(b), 17(c), 65(d), 72(d), Mock Q1 Accountancy as a profession Mock Q2(c) Agency 2, 3(d), 5(a), 19, 66(c), 68(c), 72(d), Mock Q2(a) ALARP 21(b), 23(b), 71(c) American Accounting Association model 43(a), 67(a), 72(b) Audit committee 1(a), 13(c), 33(c), 37(b), Mock Q4(b) Board of directors 2, 3, 4(c), 7, 10(b), 16, 17(c), 24, 61(b), 62, 67, 67(d), Mock Q4 Bribery and corruption 42 Chairman 7, 9, 10(c), 14(b) Charities 13 Chief executive 7, 9(a), 14(b), 15(a), 66(e), 70(d), Mock Q3 Conflicts of interest 6, 12(a), 60(a), Mock Q3 Confidentiality 64(d), 65, 67(a) Continuing professional development 16(b), Mock Q4 Control environment Mock Q1(a) Corporate citizen 41(a), 60(c), Mock Q1 Corporate ethical codes 45, 48, 61(d), 71(a) Corporate governance 1-18, 24, 51(a), 61-63, 69, 76, Mock Q1, Mock Q4, Mock Q1, Mock Q2 Corporate governance codes 5(d), 7(c), 18(a) Corporate governance concepts 17(c), 60(b) Deontological approach 48(c), 61(c), 74(d), Mock Q3(c) Directors' remuneration 2, 6, 9(c), 11, 15(a), 18(b), 25(a), 26(c), Mock Q1(d) Directors' vacation of office 9(a) Diversity 20, 60(e) Employee responsibilities 47, Mock Q2(c) Entrepreneurial risk 27(c) Environmental auditing 44(b), 52(b), 58 Environmental issues 39-42, 44, 52, 62(e), 64(d), 68(d), 71, Mock Q1 Environmental management systems 39(a), 41(b) Environmental reporting 39, 40, 42(c), 44(a), 58, 62(e), 71(b), 74(b), Mock Q1(c) viii https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Notes https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Notes https://www.facebook.com/chiasetailieuACCA/ Notes https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Notes https://www.facebook.com/chiasetailieuACCA/ Notes 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(Tick one box only) During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) Home study (book only) On a course: college Our advertisement in Student Accountant With 'correspondence' package Our advertisement in Pass Other Our advertisement in PQ Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Have used the complementary Study text Have used other BPP products in the past Recommendation by friend/colleague Prices and publication dates of new editions Recommendation by a lecturer at college Information on product content Saw advertising Facility to order books off-the-page Other None of the above Which BPP products have you used? Text Passcards Kit i-Pass Home Study Package Your ratings, comments and suggestions would be appreciated on the following areas Very useful Useful Not useful Good Adequate Poor Yes No Passing P1 Questions Top Tips etc in answers Content and structure of answers Mock exam answers Overall opinion of this Kit Excellent Do you intend to continue using BPP products? The BPP author of this edition can be emailed at: accaqueries@bpp.com Please return this form to: Head of ACCA & FIA Programmes, BPP Learning Media Ltd, FREEPOST, London, W12 8AA https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ Review Form (continued) TELL US WHAT YOU THINK Please note any further comments and suggestions/errors below https://www.facebook.com/chiasetailieuACCA/ ... control and reporting 1c 4b, c 3c Management information 1d IDENTIFYING AND ASSESSING RISK 5, Risk and the risk management process Risk categories 5, 7, Risk identification, measurement and assessment... D09 J09 D08 4c 4a 2a J 08 CONTROLLING AND MANAGING RISK 2b, c 5, Risk targeting and monitoring 5, 7, Risk reduction and control 1b Risk, avoidance, retention and modelling 1b 5, 3c 1b 2c 2d 4b,... https://www.facebook.com/chiasetailieuACCA/ https://www.facebook.com/chiasetailieuACCA/ P R A C T I C E PAPER P1 GOVERNANCE, RISK AND ETHICS BPP Learning Media is an ACCA Approved Content Provider for the ACCA qualification