MOCK EXAM 1
1. Accounting packages sold by IT companies to small and medium enterprises currently offer cloud
accounting services.
Which of the following is a benefit to such businesses of using cloud accounting services?
a) Data is stored in one single on-site location
b) The service provider cannot access the user's information
c) Information is simultaneously available to multiple users
2. Performance and appraisal enables the organization and the employee to assess progress made in the
job and evaluate strengths and weaknesses.
Which TWO of the following are additional purposes of appraisal?
a) Providing job instruction on key tasks
b) Considering future education, training and development needs
c) Assessing future prospects in the organization
d) Reviewing the organization’s grades and salary scales
3. Northland, Southland, Eastland and Westland are four countries in Asia. The following economic
statistics have been produced for the year 20X7:
Which country experienced stagflation in the relevant period?
a) Northland
b) Eastland
c) Southland
d) Westland
4. Adam, Boris, Chow and Dev all work from home. Boris, Chow and Dev all report to the same manager
at the company's head office. Adam reports to Boris and has no communication with the manager at
head office. Boris, Chow and Dev never contact one another directly. Any communications between them
take place through their manager.
The pattern of communication described above is represented by which of the following?
a) The wheel
b) The circle
c) The Y
d) The chain
5. Who prefers training to be designed to allow time for analysis in accordance with Honey and Mumford's
classification of learning styles?
a) A pragmatist
b) An activist
c) A theorist
6. In relation to data protection laws, which TWO of the following should be classified as personal data?
a) The absence record of Cheryl, an employee
b) The accountant's opinion of Abdul, the finance director
c) The payment record of Hardy Limited, a customer
7. Which TWO of the following sources of financial information about a company are external reports?
a) Budgets
b) Statement of profit or loss
c) Statement of cash flows
d) Variance reports
8. A junior accountant has been placed in a situation which she thinks presents her with an ethical
dilemma.
Which of the following would NOT be a suitable question for the accountant to ask herself when resolving
her ethical dilemma?
a) Am I being loyal to my manager?
b) Could I defend my decision in the face of public scrutiny?
c) Would an informed third party think my decision is fair?
d) Have I considered all the parties who may be affected by my decision?
9. Desmond works as part of a team. Whilst he is very good at turning ideas into practical solutions, he
can be somewhat inflexible and slow to respond to new opportunities.
Which of Belbin's team roles best describes Desmond?
a) Monitor-Evaluator
b) Plant
c) Implementer
10. Stakeholders are often categorized as external, connected and internal.
Which TWO of the following are examples of connected stakeholders?
a) A pressure group
b) A supplier
c) A shareholder
d) An executive director
11. A manager who can manage their time well is able to recognize and distinguish which tasks are
____________ and ____________ .
Which TWO words correctly complete this sentence?
a) Urgent
b) Important
c) Necessary
12. Which types of goods tend to be bought and used together?
a) Substitutes
b) Complements
c) Inferior goods
d) Giffen goods
13. Which TWO of the following are potential effects of constructive conflict?
a) A variety of solutions to problems is introduced
b) Creativity and innovation is encouraged
c) Defensive attitudes replace aggressive behavior
d) Task focus takes precedence over social cohesion
14. In relation to fraud prevention what objective should external auditors have in designing and
implementing their audit procedures?
a) To provide a systematic check of every recorded transaction
b) A reasonable prospect of detecting irregular statements or records
c) To verify pre-determined samples of all types of records
d) The identification of every inconsistency or error within the records
15. In which of the following structures would an employee be responsible to both the sales department
manager and the manager for product Alpha?
a) Matrix structure
b) Product structure
c) Functional structure
16. Adam is employed by a supermarket chain. His advertising campaign attracted hundreds of new
customers to the organization, for which he was paid a bonus.
Which of the following describes the intrinsic reward that he received?
a) A financial compensation
b) A sense of achievement
17. An accounting system can independently download transactions from an organization’s online bank
account. The system can recognize certain key words in the bank transactions from its own experience of
processing such transactions. It then assigns the transactions to the appropriate nominal codes and
records the transactions in the correct accounts.
Which financial technology is the situation describing?
a) Robotics
b) Automation
c) Machine learning
d) Big Data analytics
18. Which TWO of the following are professional qualities expected of an accountant?
a) Social responsibility
b) Independence
c) Courtesy
19. The usual requirement for limited liability companies to keep proper records and books of account is
dictated by which of the following?
a) Auditing standards
b) International accounting standards
c) Generally accepted accounting practice
d) National legislation
20. E Co's corporate code of ethics makes commitments to a range of different stakeholders. The
commitment to one group of stakeholders highlights the company's supply chain policies which include a
commitment to 'Fair-trade' and the use of organic ingredients. It also highlights the company's
commitment not to test the company's products on animals.
Which commitment is this most likely to be?
a) Core principles
b) Financing commitment
c) Commitment to customers
d) Commitment to employees
21. Which TWO of the following are examples of standing data found on an employee's payroll file?
a) Rate of pay
b) Net salary
c) Leave entitlement
22. Which TWO of the following are characteristics of an effective team?
a) Free and open communication
b) Passive acceptance of decisions
c) Constructive criticism
23. In relation to selection interviews which of the following is a description of the 'halo effect'?
a) Making positive judgments about the suitability of interviewees based on the subconscious
influence on the interviewer of the interviewee's personal traits
b) Making a decision about the suitability of interviewees quite early on in the interview process
c) Making a conscious decision about interviewees based on placing greater emphasis on personal
characteristics rather than their technical knowledge and competence
d) Assuming that all interviewees from a specific source, category or grouping will share the same
personal attributes and characteristics
24. Which of the following organizations would rely most heavily on value for money indicators and
efficiency rather than information on performance and profitability?
a) A small retailer
b) A private accountancy college
c) A local authority
d) A pension fund
25. JKL Co is a multinational organization that produces pharmaceuticals. These are all manufactured in
different countries and each manufacturing facility has its own executive organisation that operates
autonomously.
This is an example of which type of organizational structure?
a) Product
b) Divisional
c) Matrix
d) Functional
26. The legal concept of _________ protects employees against arbitrary dismissal; that is dismissal
without good reason.
Which of the following correctly completes the sentence above?
a) Wrongful dismissal
b) Unfair dismissal
c) Constructive dismissal
27. Joanne works in the human resources department of CBA Co. One of her roles is to offer advice to
employees of the company who are experiencing personal difficulties such as stress, personal
relationship problems and other matters affecting their work. Joanne provides guidance on a one-to-one
and confidential basis, often referring employees to consultants or organisations that can provide
specialist advice.
What is Joanne's role in CBA Co?
a) Counsellor
b) Buddy
c) Mentor
d) Coach
28. Which TWO of the following are found within the first level of Schein's determinants of culture?
a) Norms of behaviour
b) Attitudes
c) Relationships between managers and staff
29. Which TWO of the following are reasons for the increased participation of women in the labour force?
a) Growth of the service sector
b) Fewer part-time jobs
c) Increase in male dominated boards
d) Increase in the average age that women decide to have children
30. All gifts and hospitality offered to a professional accountant by a client pose an ethical threat and
should be declined.
Is this statement true or false?
a) False
b) True
31. A company's published accounts will include an auditor's report. To whom is the audit report
addressed?
a) To the shareholders
b) To the management
32. A rapid expansion in the use of broadband technology by consumers has the most impact on which of
the following business processes?
a) Use of advanced manufacturing techniques
b) Terms negotiated with suppliers
c) Order processing and distribution
d) Quality management and control
33. To whom do the external auditors of a company owe a duty of reasonable care and skill?
a) Existing and potential investors
b) The directors
c) The company and individual shareholders
d) The shareholders as a collective body
34. Stephan is planning his work for the day. Once Stephan has decided what has to be done what should
he now do in order to manage his time effectively?
a) Work on the most complex task first in order to get it out of the way
b) Deal with all matters marked as 'urgent' in his in-basket
c) Set priorities and schedule the work according to these priorities
d) Work on the tasks that others are pressurizing him to complete
35. The payables ledger section of the finance team relies on the purchasing department to do which
TWO of the following?
a) To advise them of all purchase orders
b) To confirm the validity of invoices received from suppliers
c) To inform them of payments received
36. Two departments have requested a new photocopier, but the company cannot afford two machines.
The proposed solution is to provide a shared access to a single new copier and place the copier between
the two departments.
What type of conflict resolution is this?
a) Lose-lose
b) Win-win
c) Win-lose
37. TECA Co has to decide whether to replace its physical retail outlets with a call centre. This decision
relates to which component of the marketing mix?
a) Promotion
b) Product
c) Place
d) Price
38. Alison has carried out a training needs analysis for a team in her organization and has concluded that
certain training requirements must be addressed.
What is the next action that she must take?
a) Establish how the training should be evaluated
b) Decide on the method of training
c) Define the precise training objectives
d) Align training needs with organizational needs
39. The following statements refer to the role of the International Federation of Accountants (IFAC). Is
each of the statements true or false?
- IFAC is responsible for promoting ethical education standards
- IFAC is responsible for preparing and publishing global accounting standards
40. Which of the following systems is most relevant to the work of a procurement manager?
a) A just-in-time system that will reduce inventories of raw materials
b) An internet-based customer order fulfillment system
c) An advanced manufacturing system that will reduce the length of the working capital cycle
d) A satellite tracking system that will monitor and record deliveries of finished goods
41. According to Heifetz what should leaders do to facilitate change effectively?
a) Create an environment of participation and involvement to ensure that team members are fully
aware of challenges that face them
b) Identify the members of the team who are most able to adapt and develop their knowledge,
competencies and skills over time
c) Instill in team members an understanding of their need to adapt their values, attitudes and
behaviors over time
d) Maintain psychologically close relationships and balance the needs of individuals and teams
with the need to achieve key tasks
42. DEF Cooperates in a country where the government has adopted a principles-based approach to
regulation. Companies are encouraged to adhere to generally accepted good standards of corporate
governance. DEF Co wishes to reappoint two of its non-executive directors to the board for a third term of
three years. It believes that this is in the best interest of the company and its shareholders. However, the
code of practice applicable to listed companies such as DEF Co states that non-executive directors
should serve a maximum of two terms of three years.
What action should DEF Co take?
a) Reappoint the non-executive directors and make no reference to this in its annual report
b) Reappoint the non-executive directors and explain the reasons for its actions in the annual report
c) Appoint new non-executive directors to replace those who have served two terms of three years
d) Seek permission from the government to reappoint the non-executive directors
43. The sales team of GFE Co has been together for some time. The members have got to know one
another quite well, but they are still encountering difficulties in reaching consensus on decisions. Several
team members have not yet got to the stage, at which they fully trust others, and they are reluctant to be
totally open and honest about how they feel.
According to Tuckman's theory which stage of development has the team reached?
a) Forming
b) Storming
c) Performing
d) Norming
44. Which of the following statements about ethics is true?
(1) Ethics are a set of moral principles to guide behavior
(2) If an action conforms to the law then it is ethical
a) Neither statement
b) Statement 1 only
c) Both statements 1 and 2
d) Statement 2 only
45. Which of the following assesses the overall effectiveness of internal controls in an organisation?
a) Internal check
b) Systems audit
c) Substantive tests
d) Probity audit
46. Hai is the minister responsible for the organization of the civil service in his country. Historically the
civil service has been organized as a tightly controlled, bureaucratic structure. He would like each
department within the civil service to become focused on deliverables emanating from their formal
objectives and capable of responding to changing priorities quickly and efficiently. Hai wants the civil
service to become more accountable for results with department managers being judged by their
performance in well-defined spheres of activity.
With reference to Handy's cultural typologies what change in the organization is Hai seeking to achieve?
a) From a task culture to a role culture
b) From a person culture to a task culture
c) From a role culture to a power culture
d) From a role culture to a task culture
47. Organizations have relationships with several types of stakeholders who themselves have varying
levels of power and interest in relation to business activities.
Select the correct options to complete the following sentences.
The stakeholders of an organization are often categorized as internal, connected and external
stakeholders.
Internal stakeholders include parties such as______
a) Managers and executive directors
b) All directors
c) Non-executive directors
Connected stakeholders include_______
a) Professional bodies
b) Regulators
c) suppliers
External stakeholders include_______ (pressure groups/customers/providers of finance) and are most
relevant when analysing ______ (opportunities and threats/strengths and weaknesses)
Stakeholder analysis is carried out by many organizations using stakeholder mapping, and some use the
Mendelow grid as a framework for this analysis. This proposes different strategies according to the level
of power and interest. For example, Mendelow's theory suggests that those who have a low level of power
and a high level of interest should be______(kept informed/afforded minimal attention) while those with a
high level of interest and a high level of power should be _____(regarded as key players/kept satisfied)
When used in strategic planning, stakeholder analysis considers the company's potential relationships
with its stakeholders over a period of _____(one year/one to three years/three to five years)
Most strategic writers consider that it is necessary to _____(maximize the benefits to key players at all
costs/minimize detrimental influences/seek consensus for different stakeholder groups)
48. XXX Co is a multinational corporation manufacturing and selling all kinds of foods and household
goods. It has divided its activities into five distinctive product groups: health and beauty, drinks, food,
appliances and textiles. Each product group has its own management structure and support functions,
including administration, finance, human resources and marketing.
YYY Co is a large consultancy, operating in many countries. Each of its consultants reports to a general
manager. Owing to the unpredictable and flexible nature of the demands placed upon them, any of the
consultants can be assigned to a team leader to enable their specialism’s to be applied to specific tasks
and projects. The consultants can have multiple responsibilities, reporting to different managers, at the
same time.
ZZZ Co provides accountancy and tax advisory services. It operates from a small headquarters but most
of its advisers have no permanent office, because they frequently work at the premises of clients, and at
other times they work from home. When the advisers are at headquarters, a 'hot desk' facility is provided,
where advisers can take a free space anywhere in a large open plan room. Very few face-toface meetings
are organized, as the company makes extensive use of audio and video conferencing.
Task 1: For each company, indicate the applicable organizational structure
Task 2: In relation to Schein's theory of organization culture, indicate which THREE of the following are
elements of observable (or explicit) culture (at the first level of the model).
1) Values
2) Behavior
3) Beliefs
4) Artefacts
5) Attitudes
6) Assumptions
Task 3: In relation to Mintzberg's organization theory, indicate which of the following is the term used to
describe those involved in standardizing processes and finding the best ways of doing jobs.
49. Most large companies must engage the services of an external auditor.
Complete the following by filling the gaps.
The external auditor of a company is appointed by the_____ (shareholders/chief executive officer/board of
directors) each year.
The contract between the company and the external auditor is a _____ (contract of employment/fixed
term contract)
The primary duty of the external auditor is to submit a report to the_____, (Board of directors/general
meeting of shareholders)
The primary purpose of which is to______ (guarantee/provide absolute assurance/express an opinion)
that the financial statements of the company _____ (are a true and fair view/are accurate in all respects)
Auditors carry out various types of test_____ (System/Data/Substantive) tests are used to ascertain
whether numerical data is correct or not, and_____ (compliance/application) tests are carried out to
determine whether controls are working correctly.
In discharging their duties, auditors must not allow bias, conflict of interest or undue influence to affect
their work. This requirement is referred to as______ (objectivity/transparency/integrity)
50. Professor John Adair's action-centered leadership model, sometimes referred to as the______
(Functional leadership model/situational leadership model/contingency leadership model), focuses on
what leaders need _____ (to do/to be), in contrast to the traits theory that focuses on _____ (personal
qualities/internal influences on the leader/external influences on the leader)
Adair suggests that leaders must strike a balance in respect of three activities: achieving the task,
maintaining the group (or team) and______ (inspiring trust/developing the individual/exercising authority)
The leader who focuses excessively on achieving the task resembles the_____(middle of the
road/impoverished/produce or perish) leader as described in the Blake and Mouton managerial grid,
whereas the leader who attempts to empathies excessively with the team could be described in the Blake
and Mouton model as adopting the _____(country club/impoverished/team) style.
Adair's model has been put into practice by many companies who require leaders to bring working groups
together on a regular basis to consider policies, products, people and other relevant issues in order to
enhance better working relationships. These forums are referred to as_____ (cascade
sessions/brainstorming/team briefings)
Generally, Adair's approach favors the_____ (consultative/laissez-faire/authoritarian) approach to
leadership.
51. Jacques, Ki, Larissa and Maureen are all specialists employed by a local government authority.
Jacques visits tenants who rent houses and apartments from the authority. His job is to deal with tenants
who are experiencing financial difficulties. It involves helping them to draw up a true picture of their
financial position and from those priorities their expenditure in order to enable them to resolve or
minimize their difficulties. The end result of Jacques' interviews is a plan of action that will enable them to
remain in their homes.
Ki works with the negotiators in the procurement department. The negotiators are highly experienced, but
Ki's job is to add value to their efforts by helping them to develop their strengths and overcome their
weaknesses. She describes her work as a continuous process of reviewing in order to improve.
Larissa works in the human resources function. As the authority has several hundred employees, some of
them experience personal difficulties such as divorce, separation, addiction and so on. Larissa helps
employees to address their personal issues in order to overcome them. Larissa sometimes refers
employees to specialist agencies.
Maureen also works in the human resources department. She works closely with new employees on an
individual basis in order to help them integrate with their colleagues. She encourages each individual to
prepare a plan through which they will take the learning experiences of the induction programme into the
workplace, and then guides them over a four month period, helping them to achieve their targets and
address any specific difficulties they encounter. Maureen describes her role as 'a process for informal
communication of knowledge and social support'.
For each individual, state whether they are involved in coaching, counselling or mentoring.
Coaching Mentoring Counselling
Jarques
Ki
Larissa
Maureen
52. XYZ Bank is a regional financial institution. Its internal audit department reports to the finance
director. Sam is an internal auditor for XYZ Bank. While carrying out an inspection at a branch office, he
identified a large cash payment that was not backed up with documentation or other records. Sam
decided to refer the matter to Raj, his immediate manager.
Raj was keen to sign off the audit visit, as it was scheduled to be completed by the end of that day. He told
Sam that having dealt with the branch for eight years there was never a problem with this branch and that
the manager was extremely diligent and honest. Raj added that he had known the manager since his
school days and was sure that there was a perfectly good explanation. The manager who processed the
transaction left the bank several months ago and now works abroad.
Raj told Sam that if he was unhappy with signing off the audit he would leave it to his professional
judgment, but he would be inclined to leave the matter as it was very unlikely that there had been any
irregular behaviour.
Task 1: Select the TWO threats to independence that have created an ethical dilemma.
a) Self review
b) Familiarity
c) Advocacy
d) Self-interest
e) Intimidation
Task 2: The banking regulator has informed XYZ Bank that it is inappropriate for the internal audit
department to report to the finance director
Select the TWO parties to which it would be appropriate for the internal audit department to report
a) The company secretary
b) The board of directors
c) The chief executive officer
d) The audit committee
e) The compliance officer
