AAT Level 4 Synoptic

What are the three steps of money laundering?

Placement

Layering

Integration

What's the punishment for money laundering?

Up to 14 years in prison and an unlimited fine

What's the punishment for tipping off?

Up to 5 years in prison and a fine

Management information needs to be ACCURATE:

Accurate

Complete

Cost effective

Understandable

Reliable

Accessible

Timely

Easy to use

What are the different types of organisations?

Public sector

Private sector

Not-for-profit

Cooperative - member owned for profit

Mutual - member owned for safety & surplus

What are the different types of private organisations?

Sole trader

Partnership

Private limited company (ltd)

Public limited company (plc)

What are the different types of organisational culture?

Power culture

Role culture

Task culture

Person culture

What's the definition of sustainability?

Meeting the needs of the present without compromising the ability of future generations to meet their own needs

What's the definition of sustainable development?

Co-existing with society rather than competing with it - long term not short

What's the definition of Corporate Social Responsibility (CSR)?

Having obligations to local community, people and organisations.

5 fundamental principles:

Objectivity

Equality

Professional competence & due care

Confidentiality

Professional behaviour

Threats to independence / objectivity:

Self interest

Self review

Familiarity

Intimidation

Advocacy

Types of fraud:

False accounting

Asset misappropriation

Collusion

What are the purposes of budgeting?

Planning

Responsibility

Integration

Motivation

Evaluation and control

What are the types of budget?

Fixed budget

Flexible budget - different possible scenarios

Flexed budget - compare actual volumes at budget rates

What are the aspects of the balanced scorecard?

Financial perspective

Customer perspective

Internal business perspective

Innovation and learning perspective

What are the limitations of non-financial indicators? (p72 syn/rev)

Ways of reducing the cost gap

Bulk discounts

ESDs

Automation

Increase training

Hire more, less overtime

Performance related pay

Outsourcing

Business process re-engineering

Redesign production

What are the different stages of the product life cycle?

Development

Introduction

Growth

Maturity

Decline

What is life-cycle costing?

Total cost over life of product over the total number of units

Absorption ('full') costing

Indirect costs allocated & apportioned to cost centres (production and service)

Service cost centres then reapportioned to production cost centres

Indirect costs then absorbed (using OAR) from production cost centres to 'cost card', showing cost per unit

Only one OAR used

OAR

Production OH over activity level

e.g. £340,000 overheads over 10,000 units = OAR per unit

Can use number of units, or labour/machine hours

Marginal costing

Cost of making one more

Selling price less variable costs

Absorption vs marginal costing

When inventory levels are rising or decreasing...

Inventory levels rising = Absorption costing profit higher

Inventory levels falling = Marginal costing profit higher

Activity based costing

Overheads grouped into cost pools (categories)

Absorbed based on a cost driver

e.g. per machine hour / per set up / per inspection

Then calculated OH cost per unit

Multiple OARS are used in ABC

Costing standards

Ideal standard - perfect, no wastage, not realistic

Current standard - as things are, most recent

Basic standard - when started out, could be long time ago

Attainable standard - with expected wastage, motivating achievable target. Realistic

Bottom up budgeting

Advantages:

More realistic, achieveable

Motivating

Gets people integrating & communicating

Disadvantages:

Time consuming

No big picture

Conflicting ideas

Lack skill to budget

Can set easy targets

Asset turnover

... is ROCE with Revenue!

Revenue over TALCL

Internal controls

Checking arithmetical accuracy

Password rotation

Approval of POs / invoices

Limiting access to systems

Checks like bank rec

Budget approving

More credit checks

Segregation of duties