ACCA Business and Technology (BT) Flashcards

A progressive tax takes a higher proportion of income as income rises.
So maybe for the first $1,000 of income the tax rate is zero, for the next $4,000 of income the tax rate is 20%, and anything beyond that is taxed at say 40%.

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.

A direct tax is paid direct by a person to the revenue authority (eg income tax).
An indirect tax is paid to the revenue authority by an intermediary (for example, a supplier charges VAT and pays this over).

A proportional tax takes exactly the same proportion of income tax from all levels of income.

A regressive tax takes a higher proportion of a poor person’s salary than it does for a rich person.
A simple example is VAT. If the VAT rate is 20% proportionally more taken from a poor person’s pay than from a rich person’s.

Interest rates, money supply, reserve requirements, exchange rates.

Government expenditure is higher than income receipts (usually tax receipts) so that the government has to borrow.

* Expenditure,
* Income
* Borrowing.

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.

People who are temporarily unemployed as they move jobs.

* Real wage
* Frictional
* Seasonal
* Structural
* Technological
* Cyclical

* Demand pull
* Cost push
* Import cost factors
* Expectations
* Increase in the money supply

Regulations are directly applicable to all member states.
Directives have to be implemented by changing each country’s national laws.

Assess past performance. Plan future potential and roles. Fix rewards.

Experience, then reflect, then form a theory, then try the theory. Hence back round to experience and the cycle is repeated.

Theorists: like to understand.
Reflectors: observe and consider.
Activists: hands-on learners.
Pragmatists: motivated to learn if they perceive a practical use.

Training is very specific and is needed for your current role.
Development is much less specific; it’s needed at some time in the future.
Education is knowledge acquired gradually through learning and instruction. It might or might not be work-related.

The wheel is faster because it provides a central node through which communication can be quickly routed.

Y, wheel, circle, chain.

Any seven from:
* Inappropriate language/terminology,
* Status,
* Emotion,
* Wrong medium,
* Not wanting to transmit,
* Not wanting to receive,
* Information overload,
* Noise/interference.

Horizontal, vertical and diagonal.

Coaching = being guided by a more experienced employee.
Mentor = a long term relationship who can give impartial advice (not your manager),
Counselling = non-directive exploration of issues and concerns.

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.

Job enlargement, job rotation, job enrichment.

An intrinsic reward comes from within; for example, a feeling of achievement or personal advancement. Extrinsic rewards come from outside; for example additional pay or praise.

Theory X and Theory Y. A theory X manager is autocratic and this might motivate subservient workers. A theory Y manager is participative and this might motivate workers with better training and knowledge.

Poor hygiene = job dissatisfaction. No motivation can occur in this state.

Hygiene factors and motivating factors.

Physiological, safety, social, esteem (or ego), self-actualisation (or self-fulfilment) needs.

Forming, storming, norming, performing and (perhaps) dorming.

Chairman,
Shaper,
Monitor/evaluator,
Company worker,
Resource investigator,
Team worker,
Plant,
Completer/finisher
and, sometimes, specialist.

A group is any collection of people who perceive themselves to be a group. Groups exhibit a sense of purpose or aim, identity, group norms and communication.

Effectiveness depends on the leadership style (psychologically close or distant) and situational favourableness ie the degree to which the situation gives the leader control and influence.

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.

There is no single best way to lead or manage; there is no set of golden rules.

The best approach depends on the situation.

The leader, the task, the subordinates and the environment.

Concern for individuals, concern for the group, concern for the task.

High concern for people; low concern for the task.

1 Concern for the task
2 Concern for people

Interpersonal role

Tells, sells, consults, joins.

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

Authority is the right to exercise power.

Power is the ability to influence events or people

Decisional role

Information processing role

Interpersonal role; information processing role; decisional role.

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

* Managing a business;

* Managing managers;

* Managing workers and work.

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

However, often dehumanises work.

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

Frederick Taylor

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

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

The directors are responsible for preparing the financial statements

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

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.

Control environment and detailed control processes.

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.

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.

The Accounting Standards Board issues financial reporting standards.

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

(Accountancy regulation)
UITF = Urgent Issue Task Force. This is part of the Accounting Standards Board and tackles urgent issues not yet covered by accounting standards.

* Integrity
* Objectivity
* Professional competence and due care
* Confidentiality
* Professional behaviour

IFAC aims to protect the public interest by encouraging high-quality practices by the world’s accountants. Through its independent standard-setting boards, IFAC develops international standards on ethics, auditing and assurance, education and public sector accounting standards. It issues guidance to support professional accountants in business, small and medium practices and developing nations.

IFAC = The International Federation of Accountants. IFAC is the global organisation of the accountancy profession.

* Short-term shareholder interest
* Long-term shareholder interest
* Multiple stakeholder obligations
* Shaper of society

* National and cultural beliefs
* Education and employment
* Psychological factors
* Personal integrity
* Moral imagination

Corporate social responsibility considers the extent to which the interests of stakeholders (other than shareholders) should be taken into account over and above what the law demands.

The Sarbanes Oxley Act.

The UK Corporate Governance Code has no force in law and is enforced on listed companies through the Stock Exchange. Listed companies are expected comply with the code or explain to shareholders why they haven’t.

The Remuneration Committee

The Nomination Committee

The roles of chief executive officer and chairman should be split.

NED = Non-executive director.

Shareholders (the principals) own the company; directors (the agents) run the company on a day-to-day basis, and should run it for the benefit of the shareholders. But they might not, so checks need to be performed (like audits).

Internal (such as employees), connected (such as customers,) external such as local people.

Any person or other organisation affected by an organisation.

* Power distance
* Uncertainty avoidance
* Individualism-collectivism
* Masculinity

* Artifacts (visual, structure, processes)
* Espoused values (strategies goals philosophies)
* Basic underlying assumptions

* Power (Zeus)
* Role (Apollo)
* Task (Athena)
* Person (Dionysus)

Symbols and titles,
Power relations,
Organisational structure,
Control systems,
Rituals and routines,
Myths and stories,
Organisational assumption (paradigm).

Porter’s five forces should be applied to an industry to judge industry attractiveness.

* Rivalry/competition,
* Threat of new entrants,
* Supplier pressure,
* Buyer pressure,
* Threat of substitutes.

Environmental influences:
* Political
* Economic
* Social
* Technological
* Ecological
* Legal

This information is typically used at the operational level.

This information would typically be used by the strategic level of management

An intranet is an internal internet. Similar to a LAN, but access is through an internet browser.

An extranet is where one organisation’s computer network has access to another organisation’s network.

A WAN is a wide area network making use of telecommunication systems to network individual computers and local area networks over a wide geographical area.

A LAN is a local area network using specially installed cables to join computers together and with peripheral devices such as printers.

These provide information to top management. Typically and EIS has access to external information, will allow ‘drilling down’ to more detail, will be flexible and will make use of graphics, such as bar charts.

A DSS helps and supports people making decisions. For example there is no right or wrong way of deciding what next year’s budget should be: it’s a process which depends on judgment and experience. However, a spreadsheet where you set up a budget is going to be extremely useful in helping you reach a conclusion about what next year’s budget should be.

A MIS produces information which is useful for management for making decisions. For example, aged receivables listings and slow-moving inventory reports.

A TPS processes transactions such as sales, wages and salaries. It is essentially just automation of what had been done by armies of accountants.
There is nothing very clever about a TPS, but it removes a lot of repetitive manual calculation and processing, speeds up processing, increases accuracy and saves costs.

* Accurate
* Complete
* Cost-beneficial
* Understandable/user-targeted
* Relevant
* Adaptable/authoritative
* Timely,
* Easy to use.

It is the part of the organisation that has not been designed by management and which management might not know about: friendships, likes/dislikes, personal ambitions, alliances, short-cuts, cover-ups.

It is the part of the organisation that has been designed by management and which management knows about: organisation charts, procedures manuals, mission statements, plans, staff appraisals.