Business Awareness Workbook - Practice Assessment 1

This task is about organisations and ethics for accountants. (a) Identify whether each of the following statements about types of organisations is true or false. Statement: The shares of a public limited company are traded on a stock exchange.

• True

• False

This task is about organisations and ethics for accountants. Identify whether each of the following statements about types of organisations is true or false. Statement: When a partner retires, the partnership must be dissolved immediately.

• True

• False

In a business with a wide span of control, managers will have

• responsibility for a large number of employees.

• very few employees to manage.

• no authority over employees.

• responsibility for only one department.

In a business with a narrow span of control, managers will have

• responsibility for a small number of employees.

• responsibility for a large number of employees.

• no responsibility for employees.

• responsibility only for financial matters.

In a business with a wide range of roles, managers will have responsibility for a wide range of roles.

• responsibility for a wide range of roles.

• responsibility for only financial matters.

• responsibility for only technical tasks.

• responsibility for customer complaints only.

This task is about organisations and ethics for accountants. Identify which of the stakeholders in Brenbome Ltd has the power to decide whether to expand the business or not.

• The bank

• Brennan Hughes

• Aisha Ashborne

• All employees of the business

This task is about organisations and ethics for accountants. (c) (ii) Identify which of these are characteristics of effective governance of a business. Select all options that apply.

• Systems that set the goals and objectives of the business.

• Systems that ensure the business maximises the return for the shareholders only.

• Systems that ensure the business is run for the benefit of all stakeholders.

• Legal governance that ensures the business complies with legislation and regulation.

• Directors take responsibility for all decisions, without input from other stakeholder of the business.

This task is about organisations and ethics for accountants. If some of the employees of Brenbome Ltd decide to invest in the business, identify what effect(s) this will have on Brennan Hughes and Aisha Ashborne.

• If all members of staff invest in the business, Aisha and Brennan will no longer have overall control of the business.

• Aisha and Brennan's shareholding will be diluted by the share offering.

• All of the new shareholders will be entitled to be directors of the business.

• As shareholders of the business, the employees will have additional rights in relation to the goals and strategy of the business.

• As directors of the business, Brennan and Aisha will have additional responsibilities to the employees now that they are also shareholders.

This task is about organisations and ethics for accountants. (d) (i) Identify which two of Reggie's fundamental ethical principles are threatened by the fact that both Mendel Ltd and Bryce Ltd are tendering for the local authority contract.

• Professional behaviour

• Confidentiality

• Professional competence and due care

• Objectivity

Identify whether the following statements about this situation are true or false. Statement: Pitkin & Co is entitled to work for Bryce Ltd simply because it is offering more money for Reggie to carry out the work.

• True

• False