A1: Strategic Objectives Part 1 (Untimed)

1. Question

1 point(s)

Which of the statements below are true regarding the differences between objectives of for‐profit and not‐for‐profit entities?

Select ALL that apply.

Not‐for‐profit entities don’t have financial objectives but for‐profit entities do

Correct Incorrect Correct answer

Not‐for‐profit entities tend to be most concerned about value for money whereas for‐profit entities tend to prioritise shareholder wealth maximisation

Correct Incorrect Correct answer

Not‐for‐profit entities aim to satisfy a wide range of stakeholders whereas for‐profit entities only aim to satisfy shareholders

Correct Incorrect Correct answer

For‐profit entities primarily aim to maximise shareholder wealth whereas not‐for-profit entities don’t

Correct Incorrect Correct answer

2. Question

1 point(s)

………………………….is a narrative report that provides a context within which to interpret the financial position, financial performance and cash flows of an entity.

The addendum to the audited financial statements

Correct Incorrect Correct answer

Management commentary

Correct Incorrect Correct answer

The CFO's statement

Correct Incorrect Correct answer

The CEO's statement

Correct Incorrect Correct answer

3. Question

1 point(s)

Capitals are the resources and relationships used and affected by an organisation and are identified in the Framework as financial, manufactured, intellectual, human, social and relationship, and natural capital.

Choose the TWO statements below that are TRUE regarding the Framework classification of these capitals.

Companies may not cover all capitals in their report.

Correct Incorrect Correct answer

The Framework requires that discrete sections are compiled in the report for every capital.

Correct Incorrect Correct answer

There is a mandatory requirement to adopt these categories of capital.

Correct Incorrect Correct answer

It is a guideline for ensuring organisations consider all forms of capital they use or affect.

Correct Incorrect Correct answer

4. Question

1 point(s)

Choose the TWO statements below that are TRUE regarding the International Integrated Reporting Framework;

The Framework is a rule-based framework.

Correct Incorrect Correct answer

The primary purpose of an integrated report is to explain to providers of financial capital how an organisation creates value in the short term.

Correct Incorrect Correct answer

An integrated report benefits all stakeholders interested in a company’s ability to create value.

Correct Incorrect Correct answer

In the Framework, the capitals comprise financial, manufactured, intellectual, human, social and relationship, and natural capital.

Correct Incorrect Correct answer

5. Question

1 point(s)

TymeBank Corp. has taken a decision to have an annual review of their reporting practices, in order to uphold the maximum possible standard of reporting. The focus of this year’s meeting is the guiding principles of presenting an integrated report, as decided by Juliet Buro, the HR manager and the current chair. Her statement at the opening speech is as follows:

“Our current reporting practices provide an excellent insight into our various expenses and also provides an excellent insight into our plans for the future, that is 1, 3 and 5 year plans. However, we more often than not undermine this by investigating areas of our business individually rather than together.”

Choose ALL the guiding principles below that Juliet is referring to in this statement.

Materiality

Correct Incorrect Correct answer

Strategic focus and future orientation

Correct Incorrect Correct answer

Connectivity of information

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Stakeholder Relationships

Correct Incorrect Correct answer

6. Question

1 point(s)

In the country of Namibia, the healthcare system is publicly funded.

Which of the following is most likely the main objective of a hospital in Namibia?

To keep gearing below 40%

Correct Incorrect Correct answer

To provide the best quality service

Correct Incorrect Correct answer

To ensure earnings are increased by 5% per annum

Correct Incorrect Correct answer

To ensure suppliers are paid on time

Correct Incorrect Correct answer

7. Question

1 point(s)

Value created over time by an organisation is reflected through transformations in capitals caused by an organisation’s business activities and outputs.

Choose the THREE statements below that are parts of the value-creation process.

The organisation’s strategy identifies how to maximise risks and minimise opportunities.

Correct Incorrect Correct answer

The mission and vision of the organisation, which identify its purpose and intention.

Correct Incorrect Correct answer

Those charged with governance take responsibility of creating an appropriate oversight structure for value-creation.

Correct Incorrect Correct answer

Identification of risks and opportunities relevant to the organisation, its strategy and business model.

Correct Incorrect Correct answer

The internal environment, including economic conditions, technological change, societal issues and environmental challenges, sets the context within which the organisation operates.

Correct Incorrect Correct answer

8. Question

1 point(s)

Last year, the share price of Two Brothers Corp. rose from $12.20 to $12.90. During the year, the company paid out a dividend of $0.60 per share.

Given this information, the annual return to investors last year was:

Fill in the blank 1 of 1 % (to 1 decimal point)

9. Question

1 point(s)

The sources of finance for VNT are:

Government grant
10% bank loan
Investment by shareholders

The examples above belong to which category of capital in the Integrated Reporting Framework?

Human capital

Correct Incorrect Correct answer

Financial capital

Correct Incorrect Correct answer

Intellectual capital

Correct Incorrect Correct answer

Government Capital

Correct Incorrect Correct answer

10. Question

1 point(s)

According to the information below, what is the market price of a share of this company’s stock?

$Fill in the blank 1 of 1

11. Question

1 point(s)

Select the THREE terms that are defined by the Global Reporting Initiative as being Principles for Defining Report Quality.

Completeness

Correct Incorrect Correct answer

Timeliness

Correct Incorrect Correct answer

Materiality

Correct Incorrect Correct answer

Clarity

Correct Incorrect Correct answer

Reliability

Correct Incorrect Correct answer

12. Question

1 point(s)

Choose the THREE answers below that are considered Guiding Principles as defined by the International Integrated Reporting Council’s Framework.

Conciseness

Correct Incorrect Correct answer

Materiality

Correct Incorrect Correct answer

Basis of preparation and presentation

Correct Incorrect Correct answer

Outlook

Correct Incorrect Correct answer

Connectivity of information

Correct Incorrect Correct answer

13. Question

1 point(s)

Joachim Co. is a retail fashion company that has a focus on patterned dresses that are based on the national dress of a remote country in Africa. For each new project that they undertake, they are mostly funded by massive floating rate debt.

Owing to a sudden economic shock, there is an increase in the domestic interest rate by 3%.

How does this impact Joachim Inc.?

Select ALL that apply:

Increased financing costs

Correct Incorrect Correct answer

Sales will rise

Correct Incorrect Correct answer

Shareholder dividends will drop

Correct Incorrect Correct answer

The cost of production will fall

Correct Incorrect Correct answer

Sales will drop

Correct Incorrect Correct answer

14. Question

1 point(s)

Select the answer below that is NOT part of the three fundamental concepts underpinning International Integrated Reporting.

Capitals

Correct Incorrect Correct answer

Value creation for the organisation and for others

Correct Incorrect Correct answer

Connectivity of information

Correct Incorrect Correct answer

Value creation process

Correct Incorrect Correct answer

15. Question

1 point(s)

Green Gardens Inc. is a manufacturing company based in country M, whose functional currency is the M$.

Extracts from its most recent financial statements are shown below:

*Statement of financial position extract*	*M$m*
Long term liabilities (10% bonds)	8.0
Capital
Share capital	10.0
Share premium	1.0
Reserves	3.0

*Statement of profit or loss extract*	*M$m*
Revenue	100.0
Gross profit	20.0
Less expenses	(15.0)
Operating profit	5.0

Corporation tax is charged at 30%.

Green Gardens Inc. expects its volume of sales to increase by 5% next year, and its gross profit margin to reduce by four percentage points (so, for example, if the margin were currently 40%, it would reduce to 36% next year).

Assuming that its capital structure, tax rate and other expenses stay constant, what is the likely impact on Green Gardens Inc.’s earnings per share (EPS)?

Increase by 5%

Correct Incorrect Correct answer

Decrease by 20%

Correct Incorrect Correct answer

Decrease by 76%

Correct Incorrect Correct answer

Increase by 1%

Correct Incorrect Correct answer

16. Question

1 point(s)

BundleConverge Co. is looking to increase shareholder wealth.

Which of the following strategies should BundleConverge Co. implement to achieve this goal?

Investing in projects that generate a return higher than the cost of capital

Correct Incorrect Correct answer

Rewarding employees with bonus payments

Correct Incorrect Correct answer

Rewarding shareholders with increased dividend payment

Correct Incorrect Correct answer

Investing in projects with zero NPV

Correct Incorrect Correct answer

17. Question

1 point(s)

Select the THREE measures that are most important in a value for money review for an educational institution by the government who provides funding.

Cost of providing tuition per student

Correct Incorrect Correct answer

Number of students successfully passing a course

Correct Incorrect Correct answer

Student satisfaction with college

Correct Incorrect Correct answer

Students from poor backgrounds enrolled

Correct Incorrect Correct answer

Reduction in costs per student

Correct Incorrect Correct answer

Foreign students enrolled

Correct Incorrect Correct answer

18. Question

1 point(s)

Which of the following is MOST likely to have a stable dividend policy as a financial objective?

A charity

Correct Incorrect Correct answer

A large, publicly-listed company

Correct Incorrect Correct answer

A healthcare provider

Correct Incorrect Correct answer

A new high-growth technology start-up

Correct Incorrect Correct answer

Educational institute

Correct Incorrect Correct answer

19. Question

1 point(s)

An investor in BedCo Inc. received a $0.50 dividend per share last year and the share price rose from $8.50 to $8.75 last year.

The annual return to the investor last year was: (Answer to 1 decimal place)

Fill in the blank 1 of 1 % (to 1 decimal place)

20. Question

1 point(s)

Select the THREE terms that are defined by the Global Reporting Initiative as being Principles for Defining Report Content.

Completeness

Correct Incorrect Correct answer

Clarity

Correct Incorrect Correct answer

Comparability

Correct Incorrect Correct answer

Materiality

Correct Incorrect Correct answer

Stakeholder inclusiveness

Correct Incorrect Correct answer

21. Question

1 point(s)

Select the statement that is MOST likely to describe the Global Reporting Initiative (GRI).

An international independent standards organisation that helps businesses, governments and other organisations understand and communicate their impacts on issues such as climate change, human rights and corruption.

Correct Incorrect Correct answer

Forms part of a listed entity’s annual report and contains information investors would reasonably require to make an informed assessment of the entity’s operations, such as its financial position, business strategies and future prospects for future financial years.

Correct Incorrect Correct answer

Aims to create a globally accepted framework for a process that results in communications by an organisation about value creation over time.

Correct Incorrect Correct answer

Helps identify and report on investments made in the human resources of an organisation that are presently unaccounted for by conventional accounting practices.

Correct Incorrect Correct answer

22. Question

1 point(s)

Complete the sentence with the correct term or phrase in regards to how a specified process relates to the diagram below.

Value is created for the company in the form of ……………. , following the subsequent sale of the orange juice.

Natural value

Correct Incorrect Correct answer

Financial value

Correct Incorrect Correct answer

Intellectual value

Correct Incorrect Correct answer

Social value

Correct Incorrect Correct answer

23. Question

1 point(s)

BundleConverge Co. is looking to increase shareholder wealth.

Which of the following strategies should BundleConverge Co. implement to achieve this goal?

Improving health and safety for employees

Correct Incorrect Correct answer

Offering early settlement discount to customers

Correct Incorrect Correct answer

Moving profitable operations to a low tax regime

Correct Incorrect Correct answer

Investing in projects with a lower accounting rate of return than target

Correct Incorrect Correct answer

24. Question

1 point(s)

BundleConverge Co. is looking to increase shareholder wealth.

Which of the following strategies should BundleConverge Co. implement to achieve this goal?

Investing in projects with a lower IRR than cost of capital

Correct Incorrect Correct answer

Paying suppliers quicker to increase goodwill

Correct Incorrect Correct answer

Increasing director bonuses

Correct Incorrect Correct answer

Reducing administrative costs

Correct Incorrect Correct answer

25. Question

1 point(s)

Which of the following phrases are ADVANTAGES of a management commentary (MC) for the users of financial statements:

Select ALL that apply.

Disclosure of information regarding future prospects of an entity may raise their expectations

Correct Incorrect Correct answer

The content of an MC is at the discretion of directors

Correct Incorrect Correct answer

Users can gain information on non-financial factors

Correct Incorrect Correct answer

The MC may be prepared in an inconsistent manner

Correct Incorrect Correct answer

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