Acca paper F1 fia diploma in Accounting and Business Accountant in Business (AB/fab) exam kit

P AP E R F 1 ( F A B ) :
AC COU N TAN T IN B US INES S
 
194 
KA P LA N P UBL I SH IN G 
19 B 
A minimum price would tend to cause an excess of supply in the market. In this case, that 
would tend to mean excess labour in the market – leading to higher unemployment. This is 
particularly likely as the minimum wage level is set above the current wage level. This may 
mean that businesses reduce the number of employees they hire, to maintain their profits. 
20 B 
This is the correct definition of an executive information system. 
21 D 
Fines, prosecution, difficulties raising finance, a damaged reputation and a qualified audit 
report are all possible consequences of compliance failure. An unqualified audit report is 
given when, in the auditors’ opinion, the financial statements provide a true and fair 
impression of the financial position of the organisation. 
22 B 
Make sure you are able to identify the contents of the main financial and management 
reports produced by the accounts department. 
23 C 
Fiduciary means ‘of trust’. All managers are accountable for their actions. 
24 A 
Committees often slow decision making down as they involve discussion and negotiation 
between all the members.
25 D 
All of the above would raise ethical issues. Materials used impacts on the safety of the 
product. Quality is a safety issue. Advertising raises issues of truth and manipulation. The 
treatment and potential exploitation of labour, whether directly employed by a business or 
its suppliers, is also an ethical issue.
26 B 
CSR is likely to attract good quality employees and should not lead to a loss of key skills 
within the organisation. However, goods need to be purchased from ethical sources, which 
may lead to a rise in their cost. It can also take up significant amounts of management time, 
which could have been used to increase business profits. 
27 C 
Formal systems will ensure that all transactions are recorded the same way. If all staff 
adopt the ‘best practice’ approach to using the system, efficiency will increase. Note that 
new staff will still need to be trained in how to use the system and the quality of the 
systems will have no bearing on whether the organisation requires an external audit or not 
– though it may make an audit easier and therefore cheaper! 
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