E1: Chapter 4 – Knowledge Check: What each level of the finance function does

To which level of the modern finance function do the following teams belong:

– Taxation teams

– Project management teams

– Project appraisal teams

– FP&A teams

The chief financial officer (CFO) is increasingly taking a more active leadership role working alongside and with the chief executive officer (CEO) as ‘navigator’ in the success of the business.

Is this statement true or false?

What is the main purpose of internal auditing?

Which two of the following statements would qualify as an ‘insight’ from a financial business partner?

From the options below, choose the correct definition of “internal audit”:

Which three of the following are widely accepted advantages of carrying out budgeting?

Leaders at the most senior level of an organisation recognise that insights provided by finance professionals can be critical when making strategic judgments and decisions. All of the following situations show the benefits that finance professionals bring to an organisation through strategic partnering, except:

Who is usually responsible for the preparation of budgets and budgetary control in a typical finance function?

Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organisation. Which of the following users uses accounting information to assess company cash flow and its consequences on employee remuneration and other benefits?

What is the main purpose of internal auditing?

Having internal control in any business is imperative to ensure effectiveness and efficiency of operations. It ensures appropriateness and the reliability of financial reporting. It  also facilitates compliance with government mandates. Which of the following situations indicates poor internal control at a company?

From the options below, choose the correct definition of “financial reporting”:

From the options below, choose all those areas that constitute roles/responsibilities of the Treasury function (select ALL that apply):

Mara is an internal auditor at a large company. She knows that evaluation of internal control involves an examination of the effectiveness of an organisation’s system of internal controls. As an internal auditor, she must perform a test to arrive at an opinion regarding the fairness of the entity’s financial statements.

The test of internal controls affecting financial statements may include all of the following, except:

Mantogo Co. is a small, virtual company that sells access to online yoga and meditiation classes. The founder of Mantogo is a resident of Bureaukrava, a European country with very high corporation tax. However, she is also a native of Friland, another European country with comparatively low corporation tax. Most of Mantogo’s prospective workers are based in Friland. Moreover, based on early market research, Mantogo’s founder has established that there is likely little to no demand for Mantogo’s product in Bureaukrava. In the end, Mantogo’s founder decides that it makes more sense to incorporate her company in Friland, rather than Bureaukrava.

The above is most likely a case of:

John is planning to invest in The Garden Corporation. As a supplier, he wanted to make sure that the investment will earn a good return on capital. Of course, he wants an assurance that the company can sustain its business operations. Which financial statement must he seek from The Garden Corporation to evaluate profitability?

Which of the following counts as a limitation of internal audit?

Rita is in charge of the internal audit team at Erritas Ltd. After conducting a review of Erritas’s internal control systems, Rita discovers that its fraud detection systems are not up to date. However, Rita’s colleague and close friend Barry is in charge of setting up the fraud detection systems. She is worried that if she includes this in her report, Barry will get fired from his post. She knows that Barry is struggling financially, and so she chooses to omit this from her final report and instead decides to speak with Barry about the issue in private.

Which of the following potential limitations of internal audit has been manifested in the above scenario at Erritas?