Page 273 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Exam style questions and answers

40 BRAIN is a mental health charity which is wholly funded by voluntary donations.
Their work focuses on providing a safe and welcoming environment for their
visitors, where they can speak with qualified staff who can assist them in
dealing with any problems they have.

BRAIN also owns several properties throughout the UK where their visitors can
live collectively, supported by BRAIN staff. BRAIN has four administrative
offices where finance, human resources and marketing activities are performed.
BRAIN staff are not well paid due to the financing constraints of voluntary
donations.

BRAIN’s performance indicators are least likely to include:

A A decrease in employee turnover

B An increase in donations year on year

C An increase in visitor satisfaction

D An increase in visitor turnover

41 JL is a qualified accountant working for GP a multinational consumer goods
company in their treasury and banking division. The division is based in the
European capital city of Parsells. Her specialist area is foreign exchange
trading, she has a small team reporting into her, only the very best candidates
are recruited to work in this team as the work carried out is very complex and
while it can be very lucrative for GP, it can also lead to major losses.

JL is very close to her team, and one of them made a mistake and bought
contracts when they had meant to sell, the mistake lead to $50,000 losses, JL
hid the transaction using an error account. As more mistakes occurred, JL,
having set a precedent, felt obliged to hide these mistakes too.

JL has been able to get away with covering for her team as very few of the
managers senior to her understand the work her team do, she also has
responsibility of chief trader and settling trades, which makes it easier for her to
hide any losses by her or her team. JL has benefitted from covering these
mistakes as the department is paid a significant bonus based on avoiding
foreign exchange losses.

The account that has been used to hide the losses has reached such a balance
that it has been discussed at a recent board meeting, with the finance director
stating that there is an issue as the account balance should be zero.

263