Table Of Content

ACCA APPROVED CONTENT PROVIDER FF ACCA approved content provider Ao Bu n /d BPP Learning Media is dedicated to supporting aspiring business professionals Aa Ct with top-quality learning material as they study for demanding professional i Co exams, often whilst working full time. BPP Learning Media’s commitment An s F to student success is shown by our record of quality, innovation and market 1in leadership in paper-based and e-learning materials. BPP Learning Media’s study A c materials are written by professionally qualified specialists who know from c o personal experience the importance of top-quality materials for exam success. u n t a n c y Foundations in Accountancy FAB / ACCA Paper F1 Accountant in Business This Interactive Text for Foundations in Accountancy In addition to ACCA examining team reviewed FAB Accountant in Business and ACCA Paper F1 material you get: A c Accountant in Business has been comprehensively co • Chapter activities to test your understanding of the u reviewed by the ACCA examining team. This review n topics covered t guarantees appropriate depth and breadth of content an • Key terms extracted from the text and highlighted t and comprehensive syllabus coverage. in ‘key term’ boxes in B • Exam focus points highlighting ways in which topics u s might be examined in e • A question and answer bank prepared by BPP s s • ILceoanrsn itnog h Migehdligiah at uatchtoivristies, key terms, PER alerts I and quick quizzes n t e • Regular fast forward summaries emphasising the r a key points in each chapter c t iv e T e x t ACCA Approved Free access Interactive Text to our Exam Success site Foundations in Accountancy FAB / Contact us ACCA Paper F1 2F Look inside BPP House 0o 1L4o2n-d1o4n4 W Ux12b r8idAgAe Road 16 tor exa Accountant in Business United Kingdom 3m TT 0+4844 5( 00)7250 1 810704 0( U2K2)11 (Overseas) 1 Aus fro For exams from 1 September 2016 gm Ebp Lpe.acronmin/[email protected] ust 1 S to 31 August 2017 2e 0p Feburary 2016 17te m £25.00 b e r FI31ST16 (RICOH).indd 1-3 02/02/2016 10:57 ACCA APPROVED CONTENT PROVIDER As the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark for producing exceptional study materials for students and tutors alike. Our Study Texts, Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what is required for exam success. EXAM SUCCESS SITE To help maximise your chances of succeeding in your exams, we’ve put together a suite of exclusive ACCA resources. Our Exam Success site provides you with access to a free digital version of this publication, as well as extra resources designed to focus your efforts on exams and study methods. To access the Exam Success site, please email [email protected] with the subject line “Access to Exam Success site - eBook”, including your order reference number and the name of the book you’ve bought (ie ACCA F5 Study Text) for your access code. Once you have received your code, please follow the instructions below: To access the BPP ACCA Exam Success site for this material please go to: www.bpp.com/ExamSuccessSite n Create a user account if you don’t already have one. Make sure you reply to the confirmation email. n Log in using your registered username and password. Select the paper you wish to access. n Enter the code you received when prompted. You will only have to do this once for each paper you are studying. Foundations in I N Accountancy T E FAB R A C ACCA T I PAPER F1 V E ACCOUNTANT IN BUSINESS T E X BPP Learning Media is an ACCA Approved Content Provider for the Foundations in T Accountancy qualification. This means we work closely with ACCA to ensure this Interactive Text contains the information you need to pass your exam. In this Interactive Text, which has been reviewed by the ACCA examination team, we:  Highlight the most important elements in the syllabus and the key skills you need  Signpost how each chapter links to the syllabus and the study guide  Provide lots of exam focus points demonstrating what the examination team will want you to do  Emphasise key points in regular fast forward summaries  Test your knowledge in quick quizzes  Examine your understanding in our practice question bank  Reference all the important topics in our full index BPP's Practice & Revision Kit also supports this paper. FOR EXAMS FROM 1 SEPTEMBER 2016 TO 31 AUGUST 2017 FAB/F1 ACCOUNTANT IN BUSINESS First edition March 2011 Fifth edition January 2016 ISBN 9781 4727 4589 7 Previous ISBN 9781 4727 3524 9 eISBN 9781 4727 4630 6 A note about copyright British Library Cataloguing-in-Publication Data A catalogue record for this book is available from Dear Customer the British Library What does the little © mean and why does it matter? Published by Your market-leading BPP books, course materials and e- BPP Learning Media Ltd learning materials do not write and update themselves. BPP House, Aldine Place People write them on their own behalf or as employees of an 142-144 Uxbridge Road organisation that invests in this activity. Copyright law London W12 8AA protects their livelihoods. It does so by creating rights over the use of the content. www.bpp.com/learningmedia Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a Printed in the United Kingdom by serious breach of professional ethics. With current technology, things might seem a bit hazy but, Ricoh UK Limited basically, without the express permission of BPP Learning Unit 2 Wells Place Media: Merstham  Photocopying our materials is a breach of copyright RH1 3LG  Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Your learning materials, published by BPP Facebook or emailing them to your friends is a breach Learning Media Ltd, are printed on paper of copyright obtained from traceable sustainable sources. You can, of course, sell your books, in the form in which you have bought them – once you have finished with them. (Is All rights reserved. No part of this publication may this fair to your fellow students? We update for a reason.) be reproduced, stored in a retrieval system or Please note the e-products are sold on a single user licence transmitted in any form or by any means, basis: we do not supply 'unlock' codes to people who have electronic, mechanical, photocopying, recording or bought them secondhand. otherwise, without the prior written permission of And what about outside the UK? BPP Learning Media strives BPP Learning Media. to make our materials available at prices students can afford by local printing arrangements, pricing policies and We are grateful to the Association of Chartered partnerships which are clearly listed on our website. A tiny Certified Accountants for permission to reproduce minority ignore this and indulge in criminal activity by past examination questions. The suggested illegally photocopying our material or supporting solutions in the practice answer bank have been organisations that do. If they act illegally and unethically in prepared by BPP Learning Media Ltd. one area, can you really trust them? © BPP Learning Media Ltd 2016 ii CONTENTS Contents Page Introduction Helping you to pass.......................................................................................................................v Chapter features...........................................................................................................................vi Studying FAB/F1.........................................................................................................................vii The Computer-Based Examination.................................................................................................xxi Tackling Multiple Choice Questions...............................................................................................xxii Part A The business organisation, its stakeholders and the external environment 1 Business organisations and their stakeholders..........................................................................3 2 The business environment...................................................................................................19 3 The macroeconomic environment.........................................................................................57 4 Microeconomic factors.........................................................................................................85 Part B Business organisation structure, functions and governance 5 Business organisation, structure and strategy.......................................................................123 6 Organisational culture and committees................................................................................145 7 Corporate governance and social responsibility.....................................................................177 Part C Accounting and reporting systems, controls and compliance 8 The role of accounting.......................................................................................................201 9 Control, security and audit.................................................................................................237 10 Identifying and preventing fraud.........................................................................................265 Part D Leading and managing individuals and teams 11 Leading and managing people............................................................................................293 12 Recruitment and selection..................................................................................................319 13 Diversity and equal opportunities........................................................................................345 14 Individuals, groups and teams............................................................................................357 15 Motivating individuals and groups.......................................................................................379 16 Training and development..................................................................................................399 17 Performance appraisal.......................................................................................................421 Part E Personal effectiveness and communication in business 18 Personal effectiveness and communication..........................................................................437 Part F Professional ethics in accounting and business 19 Ethical considerations.......................................................................................................477 Practice question bank.........................................................................................................................517 Practice answer bank...........................................................................................................................537 Index.....................................................................................................................................................551 Review form iii FAB/F1 ACCOUNTANT IN BUSINESS iv INTRODUCTION Helping you to pass BPP Learning Media – ACCA Approved Content Provider As an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use study materials reviewed by the ACCA examination team. By incorporating the examination team's comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Interactive Text provides excellent, ACCA-approved support for your studies. The PER alert! To become a Certified Accounting Technician or qualify as an ACCA member, you not only have to pass all your exams but also fulfil a practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the 'PER alert' feature. You will find this feature throughout the Interactive Text to remind you that what you are learning in order to pass your Foundations in Accountancy and ACCA exams is equally useful to the fulfilment of the PER requirement. Your achievement of the PER should now be recorded in your online My Experience record. Tackling studying Studying can be a daunting prospect, particularly when you have lots of other commitments. The different features of the Interactive Text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success. Developing exam awareness Our Interactive Texts are completely focused on helping you pass your exam. Our advice on Studying FAB/F1 outlines the content of the paper and the necessary skills you are expected to be able to demonstrate. Exam focus points are included within the chapters to highlight when and how specific topics might were examined, or how they might be examined in the future. Using the Syllabus and Study Guide You can find the syllabus and study guide on page viii of this Interactive Text. Testing what you can do Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt. We include Questions – lots of them – both within chapters and in the Practice Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content. v FAB/F1 ACCOUNTANT IN BUSINESS Chapter features Each chapter contains a number of helpful features to guide you through each topic. Topic list What you will be studying in this chapter and the relevant section numbers, together with the ACCA syllabus references. Introduction Puts the chapter content in the context of the syllabus as a whole. Study Guide Links the chapter content with ACCA guidance. Fast Forward Summarises the content of main chapter headings, allowing you to preview and review each section easily. EXAMPLE Demonstrates how to apply key knowledge and techniques. Key Term Definitions of important concepts that can often earn you easy marks in exams. Exam Focus When and how specific topics were examined, or how they Point may be examined in the future. Formula Formulae that are not given in the exam but which have to be learnt. PER Alert Gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER). Question Gives you essential practice of techniques covered in the chapter. Chapter Roundup A full list of the Fast Forwards included in the chapter, providing an easy source of review. Quick Quiz A quick test of your knowledge of the main topics in the chapter. Practice Question Bank Found at the back of the Interactive Text with more comprehensive chapter questions. Cross referenced for easy navigation. vi INTRODUCTION Studying FAB/F1 How to Use this Interactive Text Aim of this Interactive Text To provide the knowledge and practice to help you succeed in the examination for Paper FAB/F1 Accountant in Business. To pass the examination you need a thorough understanding of all areas covered by the syllabus and teaching guide. Recommended approach (a) To pass you need to be able to answer questions on everything specified by the syllabus and teaching guide. Read the Interactive Text very carefully and do not skip any of it. (b) Learning is an active process. Do all the questions as you work through the Interactive Text so you can be sure you really understand what you have read. (c) After you have covered the material in the Interactive Text, work through the Practice Question Bank, checking your answers carefully against the Practice Answer Bank. (d) Before you take the exam, check that you still remember the material using the following quick revision plan. (i) Read through the chapter topic list at the beginning of each chapter. Are there any gaps in your knowledge? If so, study the section again. (ii) Read and learn the key terms. (iii) Look at the exam focus points. These show the ways in which topics might be examined. (iv) Read the chapter roundups, which are a summary of the fast forwards in each chapter. (v) Do the quick quizzes again. If you know what you're doing, they shouldn't take long. This approach is only a suggestion. You or your college may well adapt it to suit your needs. Remember this is a practical course. (a) Try to relate the material to your experience in the workplace or any other work experience you may have had. (b) Try to make as many links as you can to other papers at the Introductory and Intermediate levels. For practice and revision use BPP Learning Media’s Practice & Revision Kit and Passcards. vii FAB/F1 ACCOUNTANT IN BUSINESS What FAB/F1 is about The overall aim of the Accountant in Business syllabus is to introduce accountancy firmly in its context as a central business function. This encompasses:  Business organisation, stakeholders and the business environment  Business structure, functions and governance, including social responsibility  Accounting and its relationship with other business functions  Audit and internal control  People management issues  Effectiveness and communications  Professional ethics in the business environment Brought forward knowledge There is no assumed brought forward knowledge for this paper. Approach to examining the syllabus Paper FAB/F1 is a two-hour paper. It can be taken as a written paper or a computer-based examination. The questions in the computer-based examination are objective test questions or multiple task questions – multiple choice, number entry, multiple response, multiple response matching, picklists and hotspots. (See page xxiii for frequently asked questions about computer-based examinations.) The written examination is structured as follows: Number of marks 16 one mark objective test questions 16 30 two mark objective test questions 60 6 four mark multiple task questions (One on each area of the syllabus) 24 viii