A publicly funded hospital has put various features in place in an attempt to improve strategic control and create an improved control environment.
Which TWO of the following features are most likely to meet this objective?

• A.A strict policy of capping the maximum salary payable to any employee at 110% of the average earned by that category of employee in the country in which the hospital is located.
• B.An Audit Committee consisting of five independent persons with expertise in finance, human resources, and medicine.
• C.Ensuring that all medical staff are aware that their first priority should be to discharge patients as quickly as possible at all times so as to minimise wasting hospital resources.
• D.The setting up of a Risk Management Committee to examine the strategic risks applicable to the entity and to formally report on a quarterly basis.
• E.Ensuring that the Head of Internal Audit examines and authorises all expense claims by hospital staff.

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The safety guard on a piece of equipment was broken. The factory manager suspended an operator who refused to operate the equipment until it was repaired. The factory manager paid another operator a bonus for operating the damaged equipment until the safety guard could be repaired.
What does this incident say about the control environment within that factory?

• A.Management is not particularly concerned with managing risks.
• B.This factory's safety record is likely to be poor.
• C.Employees are motivated to maintain productivity.
• D.Management has a proportionate and considered attitude towards risk.
• E.Employees will perceive that management does not care about health and safety risks.

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R is a manufacturer of biscuits. The market for biscuits is extremely competitive with many companies competing for contracts with large supermarkets. The intensity of the competition means that prices are kept low; and the buyers can demand higher levels of quality, and greater flexibility in supply arrangements.
Which of the following represent ways that the use of an Information System could help R to win and retain supermarket contracts in such a competitive market?

• A.It could facilitate product ordering and selection by the use of Electronic Data Interchange.
• B.If R's system is integrated to that of a particular supermarket then other supplier's systems cannot also be integrated to that supermarket system.
• C.It could be used to facilitate more timely and accurate delivery which would minimising waste.
• D.It would mean that R's products would be more prominently displayed on the supermarket shelves.
• E.If R's system is integrated with that of a particular supermarket, then this will make it more expensive for the supermarket to change to a different supplier.

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You are the Management Accountant for P, a food manufacturing company with an annual sales revenue of $5 million.
You discover that the Production Manager's records are inconsistent. Raw materials purchased do not agree to the total recorded for transfers to production plus wastage. There is an average shortfall of 2% of purchases.
You investigated and discovered that there are often mistakes made during manufacturing that results in food that is safe to eat, but cannot be sold because of visual flaws. The Production Manager is supposed to scrap all such damaged product and write all such losses off as waste, but you discovered that he has been giving the damaged food to a charity that assists homeless people. No records are made of such gifts in order to conceal the losses due to manufacturing errors.
What should you do?

• A.Instigate a process whereby edible but unsellable items can be given to the charity officially.
• B.Instigate a review of the production process to potentially reduce the amount of wastage.
• C.Instigate disciplinary action, this is both theft and poor management.
• D.Do nothing, this is a good cause and the amount is insignificant.
• E.Instigate a confidential, but documented, review with the Production Manager and tell him to stop.

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HWG is a large company which grows and processes coffee The coffee is sold to supermarkets, branded with their names for sale as "own brand" products HWG brands and packages the coffee using the supermarkets' own designs HWG's directors are considering a strategic proposal to develop a range of coffees to be sold under a brand that HWG will develop Which TWO of the following should the directors consider as part of their strategic analysis?

• A.Recruiting a marketing firm to advertise the new coffee
• B.The reaction of the supermarkets who currently buy coffee from HWG
• C.The sales volume forecast for the new coffee
• D.The choice of name for the new brand
• E.The design of packaging for the new brand

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