Answers

ACCA Certified Accounting Technician Examination – Paper T5

Managing People and Systems June 2008 Answers

1 (a) The principal aims of government legislation are: (4 only required):

(i) To protect business entities, e.g. by enacting laws putting limits on market dominance by acting against monopolies and
restrictive practices and by providing financial assistance to selected ailing industries and companies.
(ii) To protect consumers through consumer protection regulations covering packaging, labelling, food hygiene and
advertising.
(iii) To protect employees with laws governing the recruitment of staff and health and safety legislation that regulates
conditions of work.
(iv) To protect third parties such as shareholders, suppliers and creditors through Companies Act regulation on capital
maintenance and insolvency.
(v) To protect the interests of society at large against excessive business behaviour, e.g. by acting to protect the environment.

(b) Organisations are affected by legislation and regulation in the following areas (four only required).
(a) Health and safety at work
(b) Intellectual property and copyright
(c) Data protection
(d) Discrimination and equal opportunities
(e) Preparation of accounts
Health and safety at work. As an example of such legislation, the Health and Safety at Work Act 1974 is a major piece of
legislation in the UK. It provides the legal framework to promote, stimulate and encourage high standards. The Act sets out
the general duties that employers have towards employees and members of the public. It also sets out the general duties that
employees have to themselves and others. Organisations are affected in a number of areas including (but not limited to) the
following areas, which are included here as examples. Organisations are required to have health and safety procedures
including emergency procedures, evacuation procedures and accident reporting procedures. Employers are required to look
after the health and safety of their employees by ensuring that plant and equipment are safe and that articles and substances
are handled and stored safely. There is also a requirement to provide appropriate information, instruction, training and
supervision. A safe working environment and adequate welfare facilities must be provided.
Intellectual property and copyright. This refers to the reproduction and use of other people’s work, including photocopying
and recording. Copyright law covers books of all kinds, sound recordings, film and broadcasts, computer programs, dramatic
and musical works. Modern technology enables the copying and distribution of software packages or DVDs to be done
relatively easily and cheaply compared with the cost of developing and producing the original. Manufacturers are increasingly
bringing prosecutions to try and reduce the number of pirate copies of their material.
Data protection. The underlying principles behind the legislation in this area are openness, good practice in obtaining, using
and securing data and an opportunity for redress when an individual has cause for complaint. The legislation (for example in
the UK, the 1984 and 1998 Data Protection Acts) places obligations on those who use personal data – they must be open
about the use of data and must follow a code of good practice. The requirements will cover obtaining, storing, disclosing and
using any personal data about individuals. The need for privacy is recognised by the requirement that all data should be held
for clearly designated purposes. Accuracy and integrity must be maintained and data must be open to inspection. Only
legitimate parties can access data, and information must be secured against alteration, accidental loss or deliberate damage.
Data must be obtained fairly, to precise specifications and must not be kept for longer than is required. There may also be
codes of practice around how organisations respond to requests by individuals to access data held about them.
Discrimination and equal opportunities. Equal opportunities is a term describing the belief that there should be an equal
chance for all workers to apply to be selected for jobs, to be trained and promoted in employment and have that employment
terminated fairly. Organisations are affected in a number of areas including (but not limited to) the following areas, which are
included here as examples. The legislation covers specific issues like discrimination on the grounds of race, ethnic origin,
gender or marital status. There is also specific legislation around equal pay for work of equal value and also disability. The
legislation includes the administration of recruitment, selection, promotion, training and pay policies. It also includes
interpersonal behaviours that imply racial or sexual harassment.
Preparation of accounts. This includes keeping appropriate accounting records. It also includes preparing and circulating
annual reports and accounts and the preparation of auditing and financial statements. Accounts of companies prepared under
the Companies Acts are affected in a number of areas including the following which are included here as examples. Limited
companies are required to publish accounts annually for distribution to shareholders. Financial statements of companies must
show a ‘true and fair view’. Prescribed formats for income statements and the balance sheet must be used. Detailed
disclosures of information are required. A company is limited in the amount of profit it can distribute to shareholders. Various
provisions have to be satisfied if a company wishes to increase or decrease its share capital. Company law also requires that
the accounts of a limited company must be audited. This means engaging a chartered or certified accountant to conduct an
examination of the financial records of the company to ascertain that they present a ‘true and fair view’ and comply with the
relevant Companies Acts.

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2 (a) The control of cash is of prime importance in any business. Key objectives for the control of cash are to ensure that:
(i) All sums are received and subsequently accounted for.
(ii) No payments are made which should not be made.
(iii) All receipts and payments are promptly and accurately recorded.
(iv) As part of working capital management an organisation does not run out of money.

(b) There is not one ‘cash system’ in the same way as there is a sales cycle for example; there are a number of different types
of cash system which each have their own considerations as to the controls necessary. Cash systems also refer to cheque
receipts and payments. Controls over cheque transactions are easier to establish and maintain and most organisations try to
conduct all of their cash transactions by means of cheques or other forms of bank transfers. The following are types of cash
systems (two only required):
(a) Cash (both cheques and paper money) receipts by post
(b) Cash (cheques and paper money) collected by sales people.
(c) Cash sales
(d) Controls over banking
(e) Cheque payments
(f) Petty cash
The forms of control, which should be included in a detailed control procedure, are listed below (three only required for each
cash system identified):
(a) Cash received by post
(i) There should be safeguards against possible interceptions between receiving and opening the post, e.g. a locked
mailbox and restricted access to keys.
(ii) The opening of post should be supervised.
(iii) All cheques and postal orders should be restrictively crossed ‘Account payee only, not negotiable’ as soon as the
post is opened.
(iv) Records should be made of cheques, postal orders and cash received at the time of opening the post. This can be
in the form of a cashbook, adding machine list, or copies of remittance advices. It provides control over the eventual
sums banked and entered into the cashbook.
(v) The cashier and sales ledger personnel should not have access to the receipts until the record has been made.
(vi) Post should be date stamped. It provides evidence of when remittances are received and can be checked against
the date of banking. This helps to prevent cash received one day from being banked as representing different
receipts on a later day (teeming and lading).
(vii) All monies should be banked promptly.
(viii) The loss of receipts through theft or accident must be prevented.
(b) Cash collected by sales staff
(i) Authority to collect cash should be clearly defined.
(ii) Sales staff should be required to remit cash and report sales at regular intervals.
(iii) There should be clearly specified follow up actions if sales staff do not submit returns as required.
(iv) Collections should be recorded when received e.g. in a cashbook or by copies of receipts, which should be given
to the sales staff.
(v) The collector’s cash received should be reconciled to the eventual banking.
(vi) The sales person’s own receipt books should be checked against the cashbook entries.
(vii) If sales staff hold stocks of goods, an independent reconciliation of stock with sales and cash received should be
made.
(c) Cash sales
(i) Cash sales should be recorded when the sale is made, normally by means of a cash till or the use of cash sale
invoices.
(ii) If cash sale invoices are used they should be pre-numbered, a register should be maintained of cash sale invoice
books and copies should be retained.
(iii) Cash received should be reconciled daily with either the till roll or the invoice totals.
(iv) Someone independent of those receiving the cash and recording the sale should carry out this reconciliation.
(v) Daily banking should be checked against the till roll or invoice total and differences investigated.
(vi) A responsible official should sign cancelled cash sale invoices at the time of cancellation. All such invoices should
be checked periodically for the sequential numbering.
(d) Controls over banking
(i) Monies received should be banked daily.
(ii) Each day’s receipts should be recorded promptly in the cashbook.
(iii) Sales ledger personnel should have no access to the cash or the preparation of the paying-in slip.
(iv) Periodic comparisons should be made between the split of cash and cheques:
(i) received (and recorded in the cashbook)
(ii) banked (and recorded on paying-in slip)

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 (e) Cheque payments
(i) Unused cheques should be kept securely and access to them restricted.
(ii) The person who prepares cheques should have no responsibility over purchase ledger or sales ledger.
(iii) Cheques should be signed only when evidence of a properly approved transaction is available. Such evidence may
take the form of invoices, payroll, petty cash book etc.
(iv) Two signatories at least should be required.
(v) The signing of blank cheques should be prohibited.
(vi) Cheques should be crossed before they are signed.
(vii) Supporting documents should be cancelled as paid to prevent their use to support further cheque payments.
(viii) Returned cheques may be obtained from the bank and a sample checked against cashbook entries and supporting
documentation.
(f) Petty cash
(i) The level and location of cash floats should be formally laid down.
(ii) There should be restricted access to the petty cash float.
(iii) Cash should be held securely in a locked drawer or cupboard and access to keys should be restricted.
(iv) All expenditure should require a voucher signed by a responsible officer, not the petty cashier.
(v) Vouchers should be produced before a cheque is signed for reimbursement.
(vi) Vouchers should be cancelled once reimbursement has taken place.
(vii) A maximum amount should be placed on a petty cash payment to discourage normal purchasing procedures being
by-passed.
(viii) The petty cash should be reconciled by an independent person periodically.
(ix) Rules should exist preventing the issue of IOUs for the cashing of cheques.

3 (a) There are several classifications of the theories or ‘schools’ of leadership, including:
(a) Trait theories – these are based on analysing the personality characteristics or preferences of successful leaders and
assume that leaders are born, not made. Lists of traits included physical traits, personality traits and social traits.
(b) Style theories – these are based on the view that leadership is an interpersonal process whereby different leadership
behaviours influence people in different ways. More or less effective patterns of behaviour (or styles) can therefore be
adopted.
(c) Contingency theories – these are based on the belief that there is no ‘one best way’ of leading, but that effective leaders
adapt their behaviour to the specific and changing variables in the leadership context: the nature of the task, the
personalities of team members, the organisation culture etc.

(b) Hersey and Blanchard’s model of situational leadership is based on the amount of direction (task behaviour) and the amount
of support (relationship behaviour) a leader must provide given the situation and the ‘level of maturity’ of the followers. Task
behaviour is the extent to which the leader provides directions for the actions of followers, sets goals for them, and defines
their roles and how to undertake them. Relationship behaviour is the extent to which the leader engages in two way
communication with followers, listens to them and provides support and encouragement. The Hersey and Blanchard model
also considers the ‘readiness’ level of people the leader is seeking to influence. Readiness is the extent to which followers
have the ability and willingness to accomplish a specific task. This notion of ‘readiness’ is divided into a continuum of four
stages from low to high. The four stages are described as R1 (low), R2 and R3 (moderate) and R4 (high). The ‘level of
maturity’ is the extent to which the people are willing and able to take responsibility for directing their own behaviour. People
tend to have varying degrees of maturity depending on the specific task, function or objective that a leader is attempting to
accomplish. To determine the appropriate leadership style to use in a given situation, leaders must first determine the maturity
level of their followers in relation to the specific task that they want to accomplish through the effort of the followers. As the
level of maturity increases leaders should begin to reduce their task behaviour and increase their relationship behaviour. As
the followers begin to move into an above average level of maturity, leaders should decrease not only task behaviour but also
relationship behaviour. From the combination of task behaviour and relationship behaviour, four leadership styles (S) emerge:
telling (S1), selling (S2), participating (S3) and delegating (S4).
S1 – telling – emphasises high amounts of guidance (task behaviour) but limited supportive (relationship) behaviour. This
leader provides clear instructions and specific direction. This style is most appropriate for low follower readiness (R1).
S2 – selling – emphasises high amounts of both directive (task) and relationship behaviours. The leader encourages two-way
communication and helps build confidence and motivation in followers. The leader retains responsibility and controls
decision-making. This style is most appropriate for low to moderate follower readiness (R2).
S3 – participating – emphasises a high amount of two-way communication and supportive (relationship) behaviour but low
amounts of guidance (task behaviour). The leader and the followers share decision making and no longer need or expect the
relationship to be directive. This style is most appropriate for moderate to high follower readiness (R3).
S4 – delegating – emphasises little direction or support with low levels of both task and relationship behaviours. This style
is appropriate for leaders whose followers are ready to accomplish a particular task and are both competent and motivated to
take full responsibility. This style is most appropriate for high follower readiness.
Hersey and Blanchard suggest that the key to using situational leadership is that any leader behaviour may be more or less
effective according to the readiness of the person the leader is attempting to influence. The model draws attention to the

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 importance of developing the ability, confidence and commitment of subordinates. The leader should help followers to develop
in readiness to the extent that they are able and willing to successfully accomplish the task. This development should take
place by adjusting leadership behaviour through the four styles of telling, selling, participating and delegating.

This can be summed up as follows:

(high)

Share ideas G Explain decisions

IN SE and provide
and facilitate AT opportunity
in decision-
IP

LL
making TIC for clarification

IN
RELATIONSHIP BEHAVIOUR

G
PAR
(Supportive behaviour)

S3 S2

S4 S1
Provide
Turn over
ING

specific
responsibility instructions
AT

for decisions TE
and closely
EG

and
LL
supervise
implementation
IN
L

performance
DE

(low) TASK BEHAVIOUR (high)

(Directive behaviour)

4 (a) A job description specifies and describes the role and responsibilities of a particular job. It is a statement of the tasks,
responsibilities and relationships involved in a given job. All employees should have a job description that specifies tasks,
details responsibilities, sets authority limits, distinguishes accountability and outlines the organisational relationships that the
job entails. The following sections should be included in a job description (four only required):
(i) The identification of the job, including the job title, the department structure and the number of people doing the job.
(ii) The purpose of the job – identifying its objectives in relationship to the overall objectives, e.g. to manage the purchasing
section responsible for buying raw materials.
(iii) The position in the organisation – indicating the relationships with other jobs and the lines of responsibility. Often an
organisation chart is included here.
(iv) The principal duties to be performed, with emphasis on key tasks and limits to the jobholder’s authority. A more detailed
breakdown might be included which identifies specific tasks in terms of precisely what is to be done, with some
explanation, both in terms of quantity and quality.
(v) Responsibilities – a statement outlining any responsibilities for the resources e.g. staff and budgets.
(vi) Job requirements and physical conditions – including details of noisy, dirty, dangerous conditions or pleasant office
conditions and also hours of work, overtime, unsocial hours.
(vii) Grade and salary range – details of the rate for the grade, incremental scales, piecework, bonuses and commissions.
Additional benefits such as pension schemes and the provision of a company car would also be included in this section.
(viii) Reporting structure – to whom the job holder reports and at what level, with possible indications about future
succession, prospects of promotion or transfer.

(b) The work methods and practices of your department and organisation arise from a number of factors (five only required):
(i) The nature of the specific task: i.e. what needs to be done, in what order and in what manner, in order for the purpose
of the task to be fulfilled.
(ii) The requirements of the relevant laws (e.g. Data Protection Acts, Companies Acts), regulations and Codes of Practice
established to ensure that tasks are completed safely, fairly and in accordance with the rights of individuals and society.
(iii) The requirements of organisational policy, formulated to reflect the organisation’s values, culture and intentions.
(iv) The requirements of the organisation’s systems, procedures and rules developed so that standard, safe, predictable and
dependable methods are used to encourage everyone to work together towards achieving the objectives of the
organisation.
(v) Formal instructions from people in positions of authority. Where there is no set policy, procedure or legal constraint, a
manager can largely determine how things are done.
(vi) Informal ground rules or customs, developed over time by the work group or the organisational culture.
(vii) Methods of communication and coordination in place within the structure of the organisation – designed to ensure that
all sections of the organisation are pursuing common objectives and that duplication of effort is avoided.

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5 (a) Emergency procedures are particularly important to ensure that people are aware of the scope and limits of their responsibility.
Health emergencies may include any form of workplace injury (e.g. fractures, burns, eye injuries etc), electric shock, fainting
or collapse, allergic reactions to toxic substances or manifestations of illness such as heart attacks or epileptic fits. Procedures
need to be in place so that these can be dealt with as quickly and effectively as possible. Employers also need to plan for
emergency situations such as fire and bomb alerts, chemical spillage etc. The plan should be written down and
communicated to all employees and others who may be affected by it. Specific employees with allocated duties within the
plan should be given appropriate, regular training in the correct procedures to follow. The purpose of emergency procedures
is to ensure that everyone is clear about what to do and where to go in the event of an emergency. The following areas should
be included in an organisation’s emergency procedures (four only required):
(i) How to raise the alarm – this includes ensuring that employees are aware of the location of fire alarms and that the
alarms are regularly tested so that employees are able to recognise the sound.
(ii) What to do – i.e. how to call the emergency services and how to respond to a fire or evacuation alarm. This is achieved
by carrying out fire and evacuation drills throughout the year.
(iii) Where to go to reach safety – this includes ensuring that employees are aware of fire and emergency exits, that they are
clearly marked and lead as quickly as possible to a designated safe area and are kept clear at all times. This may also
include evacuation procedures.
(iv) Names of nominated first aiders in each department or area – with full contact details.
(v) Essential actions such as emergency factory shutdown – locations of adequate protective equipment (such as sprinklers
and fire extinguishers) should be in hand and regularly maintained.

(b) Accident reporting procedures are important to ensure that the circumstances and facts are recorded accurately as soon as
possible after an accident. It may be necessary to refer to accident reports at a later date if complications emerge some time
later. An accident reporting procedure would require the person reporting the accident to do the following:
(i) Report the accident to someone in authority as soon as possible. This can be done informally, but in addition it is usual
practice to complete an accident report form.
(ii) Record the details of the accident in an accident book.
(iii) Get signed statements from any witnesses to the accident, including names and addresses.

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ACCA Certified Accounting Technician Examination – Paper T5
Managing People and Systems June 2008 Marking Scheme

1 (a) 2 marks for each aim explained up to a maximum of 8 marks. 8 marks

(b) 1 mark for each area identified up to a maximum of 4 marks. 1 further mark for each area explained
up to a maximum of 4 marks and 1 further mark for each example used up to a maximum of 4 marks. 12 marks

Total 20 marks

2 (a) 2 marks for each objective outlined up to a maximum of 6 marks. Marks could also be awarded for other
relevant points. 6 marks

(b) 1 mark for each type of cash system identified up to a maximum of 2 marks. Up to 2 marks for each
form of control recommended within each system up to a maximum of 6 marks in each area. 14 marks

Total 20 marks

3 (a) 3 marks for each classification or ‘school’ outlined, up to a maximum of 9 marks. 9 marks

(b) 3 marks for a general overview of the model. 1 mark for each style identified up to a maximum of
4 marks and 1 further mark for each style explained up to a maximum of 4 marks. 11 marks

Total 20 marks

4 (a) 2 marks for an explanation of the purpose. 2 marks for each section outlined up to a maximum of 8 marks. 10 marks

(b) 1 mark for each factor identified up to a maximum of 5 marks, 1 further mark for each factor explained
up to a maximum of 5 marks. 10 marks

Total 20 marks

5 (a) 2 marks for an explanation of the importance. 2 marks for each area outlined up to a maximum of 8 marks. 10 marks

(b) 4 marks for an explanation of the importance. 2 marks for each step outlined up to a maximum of 6 marks. 10 marks

Total 20 marks

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