ACCA F1 flashcards – set 3

* Planning,
* Organising,
* Commanding,
* Coordinating
* Controlling.

The directors are responsible for setting up and maintaining the system of internal control

1 Concern for the task
2 Concern for people

* Managing a business;

* Managing managers;

* Managing workers and work.

Frederick Taylor

The control environment essentially refers to the culture within the organisation. Some organisations put a very high priority on having a good system of internal control in place whereas others see these as a nuisance.

Benefits: increased productivity, wage allocation based on output, workforce care programmes.

However, often dehumanises work.

* Termination,
* Non-renewal of a fixed-term contract,
* Constructive dismissal.

The variables of: the leader, the task, the subordinates and the environment all have to match. For example an authoritative manager in charge of subservient staff, doing a repetitive task to a strict timetable.

The directors are responsible for preventing and detecting fraud. Auditors should detect fraud if it is large enough to cause a material misstatement in the financial statements.

Content theory and process theory.

The Accounting Standards Board issues financial reporting standards.

Authority is the right to exercise power.

Power is the ability to influence events or people

Job enlargement means more of almost exactly the same. It is certainly what will be called a horizontal change; there is no more challenge or responsibility in the job.
Job rotation is also a horizontal change with no real increase in challenge.
Job enrichment is a vertical change. It’s giving people more responsibility and more challenge in their job.

The balance of trade is the inflows and outflows from the trade in goods.
The current account includes the balance of trade but also income from overseas investments and transfers such as those to and from the EU.

Interpersonal role

The Hawthorne studies: there is more to motivation than pay; people like groups; groups influence behaviour.

Control environment and detailed control processes.

* Setting objectives,
* Organising the group,
* Motivating and communicating,
* Measuring performance,
* Developing people.

The directors are responsible for preparing the financial statements

Elton Mayo

(Accountancy regulation)
The Financial Reporting Review Panel (FRRP) is concerned with the examination and questioning of departures from accounting standards by large companies.

It is management’s function to study work and to develop a science of wotk so that jobs can be carried out efficiently.

Information processing role

Tells, sells, consults, joins.

Changes in an industry’s structure.
For example if manufacturing jobs move overseas, unemployment is caused by a change in the structure of the economy.

GAAP stands for Generally Accepted Accounting Principles. This is a common set of accounting principles, standards and procedures that companies use to compile their financial statements.

Motivating force = Valence x Expectation

Valence is how much someone wants something (like a bonus or promotion).
Expectation is an assessment of the likelihood of success.

Delegation is the transfer of authority. It is NOT the transfer of responsibility or accountability.

The idea that management ability can be forecast through personal traits such as intelligence, initiative and self-assurance.

Decisional role