Knowledge check

Multiple choice
CONTEMPORARY BUSINESS ISSUES

VERSION 15A

CONTEMPORARY BUSINESS ISSUES

CONTENTS |

Contents
QUESTIONS
Question 1.1
Question 1.2
Question 1.3
Question 1.4
Question 1.5
Question 1.6
Question 1.7
Question 1.8
Question 1.9
Question 1.10
Question 1.11
Question 2.1
Question 2.2
Question 2.3
Question 2.4
Question 2.5
Question 2.6
Question 2.7
Question 2.8
Question 2.9
Question 2.10
Question 3.1
Question 3.2
Question 3.3
Question 3.4
Question 3.5
Question 3.6
Question 3.7
Question 4.1
Question 4.2
Question 4.3
Question 4.4
Question 4.5
Question 4.6
Question 5.1
Question 5.2
Question 5.3
Question 5.4
Question 5.5
Question 5.6
Question 6.1
Question 6.2
Question 6.3
Question 6.4
Question 6.5
Question 6.6
Question 6.7

4
4
4
4
5
5
5
5
6
6
6
7
7
7
8
8
8
9
9
9
9
10
10
10
10
11
11
11
12
12
12
13
13
13
14
14
14
14
15
15
15
15
16
16
16
16
17
17

CONTEMPORARY BUSINESS ISSUES

ANSWERS
Question 1.1
Question 1.2
Question 1.3
Question 1.4
Question 1.5
Question 1.6
Question 1.7
Question 1.8
Question 1.9
Question 1.10
Question 1.11
Question 2.1
Question 2.2
Question 2.3
Question 2.4
Question 2.5
Question 2.6
Question 2.7
Question 2.8
Question 2.9
Question 2.10
Question 3.1
Question 3.2
Question 3.3
Question 3.4
Question 3.5
Question 3.6
Question 3.7
Question 4.1
Question 4.2
Question 4.3
Question 4.4
Question 4.5
Question 4.6
Question 5.1
Question 5.2
Question 5.3
Question 5.4
Question 5.5
Question 5.6
Question 6.1
Question 6.2
Question 6.3
Question 6.4
Question 6.5
Question 6.6
Question 6.7

CONTENTS |

18
18
18
18
19
19
20
20
21
21
22
22
23
23
24
24
25
25
26
26
27
27
28
28
29
29
30
30
31
31
31
32
32
33
33
34
34
35
35
35
36
36
36
37
37
38
38
39

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

QUESTIONS
Question 1.1

ZigZag is a company that has been operating for over five years. A year ago, ZigZag set up an advisory board
to help it improve its performance. ZigZag is currently seeking external funding to help it grow, and has
recently implemented a disaster recovery program as part of its risk management. What category is most
likely to describe this company?
a) A small enterprise.
b) A small-to-medium enterprise.
c) A mid-sized enterprise.
d) A large enterprise.

Question 1.2

Which one of the following is least likely to cause a problem in a family-owned business?
a) Increasing requirements for non-family members as the organisation grows.
b) Losing control when external financiers become involved in the organisation.
c) Handing over control between generations.
d) The agency problem of the separation of ownership and control.

Question 1.3

You are asked to provide strategic advice and services in an area that you know is beyond the capacity of
yourself or your organisation. Accepting this assignment will impact most heavily on which one of the
following fundamental principles?
a) Professional competence and due care.
b) Independence.
c) Objectivity.
d) Confidentiality.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.4

How can corporate social capital be defined?

a) A component of intellectual capital, relating in particular to the skill, training and education,
and experience and value characteristics of an organisations workforce.
b) A means by which an organisation can measure and monitor the employeecustomer encounter,
particularly for organisations with decentralised customer transactions.
c) A combination of intellectual capital, financial soundness and an organisations ability to operate in
alliances with external partners.
d) A combination of three main components: vision, values and leadership branding.

Question 1.5

According to Xiao & Fu (2009), what are the main factors influencing the need for advice?
I.

The size of the organisation.

II.

The geographic location of customers.

III.

The availability of professional staff.

IV.

The growth strategy of the firm.

a) I and II only.
b) III and IV only.
c) I, II and IV only.
d) I, III, and IV only.

Question 1.6

Which one of the following is an example of a strategic role undertaken by a professional accountant?
a) Allocating resources to increase efficiency and productivity.
b) Identifying policies and processes and monitoring adherence.
c) Identifying likely future issues and assessing plans to address them.
d) Enabling good cost control practices and cash flow management.

Question 1.7

Which one of the following is the most common issue that a family-owned business is likely to encounter?
a) Limited access to traditional means of funding.
b) Failure to demonstrate a strong identity and a clear long-term vision.
c) Conflict due to family members being both shareholders and employees.
d) The business concentrating on innovation, which results in uncertainty and risk.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.8

ABC Ltd (ABC) is an oil extraction company. It recently acquired the rights to extract oil from a piece of land
near the small community of Happy Town. ABC has asked its senior accountant to consider the costs and
benefits of a new technique for extracting oil, which would also require approval from the local council.
The senior accountant is aware that this new technique for extracting oil would likely result in the
contamination of drinking water, but significant cost savings and other economic benefits would also
arise from using this technique.
Which one of the following is least likely to be a consideration for the senior accountant in assessing
the costs and benefits of the new oil extraction technique?
a) The total cost savings from the new oil extraction technique versus any provisions for future
environmental rehabilitations.
b) The cost of good faith payments or donations to the local council versus the economic benefits
of receiving council support.
c) The negative effect on ABCs reputation if it proceeds with the controversial oil extracting technique
versus the cost savings to be gained.
d) The potential sacrifice of the health and safety of the Happy Town inhabitants versus the benefits of
increased jobs and financial security.

Question 1.9

ZX Ltd (ZX) produces plastics, detergents and fertilisers. ZX produces a large amount of toxic waste as a
by-product from the manufacture of the different products. ZX has recently received extensive criticism in
the media for its excessive amount of environmental waste by-products. The board has asked the companys
management accountant to assess some different proposals outlining ways to reduce the amount of toxic
waste.
If the management accountant employs monetary environmental management accounting (MEMA), which one
of the following is most likely to be included in the assessment submitted to the board?
a) Analysing the production process to identify the causes of the toxic waste.
b) Determining the amount of toxic waste produced during the manufacture of the different products.
c) Performing detailed costing analysis to determine the toxic waste costs and how they affect each product.
d) Separating toxic waste to enable increased recycling of inputs and reduced wastage.

Question 1.10

ARI Ltd (ARI) is a medium-sized company experiencing high staff turnover. The board of directors are
concerned because of the high cost of turnover and loss of internal knowledge. The board recently appointed
A-2-Z, an external accounting firm, to help resolve this problem.
Which one of the following is the most effective way for A-2-Z to assist the board in addressing the high
staff turnover?
a) Evaluate the financial impact of the high staff turnover and its effect on the sustainability of the company.
b) Propose a retention bonus scheme to be paid to employees who stay with the company for more than
five years.
c) Compile a list of issues experienced by employees, including detailed explanations and examples.
d) Identify any underlying problems with the culture of the organisation and suggest practical changes to
improve the working environment.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.11

TOP Ltd is experiencing cash flow problems and has asked their senior accountant to help resolve the problem.
After much research, the senior accountant believes that the cash flow problems relate to poor credit policies
which permitted credit to be extended to customers who could not afford to pay.
In terms of the Weick model, the senior accountant is at what stage of making sense of the problem?
a) Labelling.
b) Bracketing.
c) Presumption.
d) Communication.

Question 2.1

Which one of the following is an impact of dwindling resources?

a) Consumption of resources will increase.
b) Resources will become more expensive.
c) Recycling and reuse activities will reduce.
d) An increased focus on the cost of externalities.

Question 2.2

Which one of the following best describes how the use of Key Performance Indicators (KPIs) can assist
organisations operating in a carbon-constrained economy?
a) KPIs identify the audience and reporting medium.
b) KPIs mitigate the risk of exposure to carbon price increases.
c) KPIs help manage the links between environmental and financial performance.
d) KPIs address the increased demand to report on key impacts on the environment.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.3

Which one of the following lists the steps for reporting environmental key performance indicators (KPIs)
for a service business in the correct order?
1. Determine the relevant KPIs.
2. Review data needs and sources.
3. Identify audience.
4. Report on relevant KPIs.
5. Collect further data.
a) 1, 2, 3, 4, 5.
b) 3, 1, 2, 5, 4.
c) 1, 3, 2, 5, 4.
d) 3, 1, 5, 2, 4.

Question 2.4

Assume that you have just starting working as a graduate accountant in a small company. The company has
three senior managers who are all baby boomers.
Which one of the following is most likely to be the biggest concern for the company?
a) The lack of soft skills in the senior managers.
b) The senior managers are not very good at using technology.
c) Business sustainability due to loss of knowledge as the senior managers retire.
d) Reduction in profitability when senior managers retire due to paying large leave balances.

Question 2.5

As part of a strategic restructure, EZ Ltd is considering moving its accounts payable and receivable functions
from Australia to its new office in India. This is expected to yield considerable cost savings in terms of labour
costs and office rent. A senior manager will also relocate to manage the business unit in India.
What type of business model is this an example of?
a) Outsourcing, because the function is moving to another country.
b) Outsourcing, because the function will be performed by a third-party.
c) Outsource offshoring, because it will yield cost savings to the company.
d) Captive offshoring, because the function is remaining within the company.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.6

Which one of the following accurately reflects findings from the Workplace Gender Equality Agency (2014)
about the workforce?
a) Fewer women than men undertake tertiary education.
b) Female workers are now paid the same as male workers.
c) Female workers are paid less than male workers.
d) Women now comprise 40 per cent of members in the Australian Parliaments House of Representatives.

Question 2.7

What response has characterised the reaction to the global financial crisis by a large proportion of mature-age
workers in Australia?
a) They changed positions to secure a greater retirement income.
b) They retired to take up superannuation or the old age pension while it is available.
c) They deferred retirement in the hope of replenishing superannuation funds.
d) They deferred retirement to transfer knowledge to younger employees.

Question 2.8

Which one of the following finance and accounting activities is generally considered to have the least added
value to business and therefore most likely to be offshored?
a) Financial accounting.
b) Internal audit.
c) Payroll.
d) Tax.

Question 2.9

Which one of the following corporate activities would most likely be offshored according to a survey of
CPA Australia members?
a) Call centre.
b) Finance and accounting.
c) Information technology.
d) Manufacturing.

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.10

Which of the following best describes the offshore model benefits of doing the same things in the same way?
a) Wage arbitrage.
b) Labour consolidation efficiencies.
c) Process harmonisation efficiencies.
d) Tax saving.

Question 3.1

Which one of the following does not provide a valid description of forensic accounting?
a) It involves the identification and investigation of business crime.
b) It involves assisting in dispute resolutions and court proceedings, as well as providing forensic reports.
c) It is broad and encompasses all relevant areas to do with detecting, investigating and preventing fraud.
d) It focuses on detection, scrutinising documents, establishing chains of custody and investigating a case.

Question 3.2

Which one of the following is an example of a proactive forensic accounting role in business crime
investigation?
a) Tracing funds.
b) Penetration testing.
c) Assisting in mediation.
d) Integrity benchmarking.

Question 3.3

Which one of the following examples would be unlikely to raise an alert as to the possibility of workplace
fraud being committed?
a) A junior employee begins leading a very extravagant lifestyle.
b) A quiet and reserved treasury accountant has recently been promoted.
c) Higher than average numbers of end of period accounting adjusting journals.
d) Recent high staff turnover has led to interim measures being adopted for the approval of invoices.

10

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.4

Assume the office manager in your organisation has been contacted by CartRefill, a company selling printer
cartridges. The office manager has been offered free tickets to football games and a shopping gift card if your
organisation purchases 10 cartridges from CartRefill at prices that are higher than the normal retail price.
The office manager accepts this offer and enjoys a day at the football and a Saturday morning shopping trip.
This is an example of which category of business crime?
a) Workplace fraud.
b) Misuse of position.
c) Bribery and corruption.
d) Externally instigated fraud.

Question 3.5

It is nearing the end of the financial year and sales revenue for MNO Ltd (MNO) is lower than budget.
However, a large order for delivery in the next financial year has just been received. The Chief Executive
Officer of MNO has demanded that the order be recorded as a sales invoice in the current financial year,
so that the revenue budget will be met.
Assuming the sales invoice is recorded in the current financial year, which one of the following methods of
financial statement fraud best describes this action?
a) Fictitious revenues.
b) Timing differences.
c) Improper disclosures.
d) Concealed liabilities.

Question 3.6

When providing expert witness services in accordance with APES 215 Forensic Accounting Services, what is
the forensic accountants paramount duty?
a) To assist the Court above any duty to the client.
b) To adhere to the rules of evidence during the investigation.
c) To prepare a report that includes the significant facts on which opinions are based.
d) To prepare a report that is clearly expressed and includes the instructions received.

11

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.7

Assume you are developing a fraud risk management plan. You have been asked to provide a treatment
program for risks associated with the cash management function, which has a relatively high risk rating.
Which one of the following would be the most effective mitigation action to pursue?
a) Require bank statements to be sighted and reconciliations approved by the CFO.
b) Increase scrutiny of suppliers before they are used and payments made to them.
c) Analyse all bank transactions at the end of each financial year using data analytics.
d) Remove payment processing authorisation for staff members processing bank reconciliations.

Question 4.1

Which one of the measures below is Basel III not seeking to employ to address future liquidity risk?
a) Adherence to specific ratiosthe liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR).
b) Common equity requirement increase of up to 7 per cent for banks.
c) Additional loss absorbency capital for systemically important banks.
d) Installation of an integrated liquidity management module by every commercial bank.

Question 4.2

Which of the following are examples of the needs of users of General Purpose Water Accounting Reports
(GPWARs)?
I. The availability of water resources.
II. Whether management objectives for water resource management are being met.
III. The comparison over time of annual water allocations.
IV. The sea levels surrounding a major harbour.
a) I and II only.
b) III and IV only.
c) I, II and III only.
d) II, III and IV only.

12

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 4.3

Which one of the following arguments explains why the issue of international convergence of accounting
standards is related to the issue of protectionism?
a) International convergence requires countries to consider giving up at least some of their power over
the financial reporting standards that affect companies in their country.
b) World leaders are likely to seek to protect their economies from the effect of financial decisions
taken elsewhere.
c) If world leaders allow other countries to participate in accounting standard setting, they will also have
to allow other countries to influence decisions that affect their farmers.
d) Only the strong economies participate in the IASB, and those economies need the least protection from
other countries.

Question 4.4

The Rural-H agency of the government was established to deliver health services to the population of
a large rural area. Each year, Rural-H is required to report statistics to the government about the number
of patients it has serviced.
Rural-H also has to report on the money it obtained from the government, donors, and other sources,
and account for its expenditure of that money. This year, Rural-Hs board decides to adopt the new
integrated reporting framework and publish an integrated report.
Which one of the following statements best explains the reason for the boards decision to publish an
integrated report?
a) An integrated report includes details of Rural-Hs performance and outcomes together with a report of
their financial cost.
b) All stakeholders of Rural-H are likely to have the same information needs and will be satisfied with a simple
report of its finances.
c) Integrated reporting is designed to meet the needs of Rural-Hs largest stakeholders because it covers all
dimensions of sustainability.
d) The business approach to integrated reporting requires a focus on demonstrating a financial surplus whilst
embracing stakeholder inclusivity.

Question 4.5

Which one of the following is correct in relation to the role of the International Auditing and Assurance
Standards Board (IAASB) in sustainability reporting?
a) The IAASB issued AA1000AS to certify audits of sustainability reports.
b) The IAASB is responsible for standards governing auditing of financial reports and is not interested in the
issues arising in assurance of sustainability reports.
c) The IAASB and AUASB jointly issued the Australian Water Accounting Standard (AWAS) 2 in early 2014.
d) The IAASB has issued an international auditing standard for assurance of greenhouse gas statements.

13

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 4.6

Which one of the following correctly explains why the IASB is working on fair value accounting and asset
impairments as part of its response to the global financial crisis (GFC)?
a) Asset impairments are more likely in a financial crisis and to minimise risk, the IASB wants to make
standards that are likely to be used often.
b) The inconsistency between IFRS and US GAAP on impairment of financial assets was seen as a cause of
poor quality and non-comparative disclosures.
c) World trade imbalances, excess leverage and continuously low interest rates most likely caused the GFC.
d) Special purpose entities are more likely to need standards on asset impairment.

Question 5.1

Which one of the following is correct?

a) Trust can be rapidly developed in a new relationship.
b) Trust is based on the consistent display of predictable behaviour and the exchange of information, and has
no emotional element.
c) The purpose of seeking and interpreting information with relationship partners is to establish a sense of
security and trust in the relationship.
d) An organisation can operate effectively and demonstrate trustworthiness, even though it does not display
openness and transparency.

Question 5.2

Effective knowledge sharing can take place in an organisation when:

a) staff members are confident that the exchange of knowledge can take place with openness and in good
faith, and they feel that they can trust their peers and management.
b) management directs staff to share their knowledge and has becoming a learning organisation as one of
its strategic goals.
c) appropriate knowledge-sharing technology platforms are put in place.
d) the baby boomer generation reaches retirement age, making it imperative that organisational knowledge
is passed on.

Question 5.3

Intellectual property can be best described as:

a) the knowledge that resides within the employees of the organisation.
b) creations of the mind used in commerce and the information that is incorporated into physical or
tangible objects.
c) an asset that has no physical or tangible presence, but still provides future economic benefits to an
organisation.
d) the legal and equitable rights that are attached to property that is owned, controlled or created
by an organisation.

14

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 5.4

Which one of the following methods is least likely to be used when enforcing intellectual property rights?
a) Government protection.
b) Civil procedures.
c) Conservatory measures.
d) Border measures.

Question 5.5

Which one of the following best describes conservatory measures of intellectual property protection?
a) Having counterfeited or pirated products seized at the border to prevent them from entering a country.
b) Gaining permission to destroy not only the counterfeit or pirated item, but also to destroy the machinery
and equipment used to produce it.
c) Penalties that include jail time and significant fines for those who breach intellectual property rights.
d) Rapid action that captures the suspected infringement so it can be reviewed and analysed, and which
prevents offenders from destroying it.

Question 5.6

Which one of the following is most likely to be a breach of intellectual property rights?
a) Reproducing a competitors product 25 years after it was patented.
b) Reproducing an authors book 45 years after the author died.
c) Copying a product 18 years after it received utility model protection.
d) Re-recording a song which was the subject of a patent application 18 years ago.

Question 6.1

Which of the following steps should be part of a detailed communication plan?

I. Setting specific, measurable objectives and goals, and outlining the desired situation after the
communication has been distributed.
II. Developing a clear understanding of the context, needs and motivations of the main target audience.
III. Establishing strategies and tactics to reach the goals of the communication, and clarifying how the desired
results will be achieved.
IV. Ensuring that appropriate resources are made available to deliver the goals of the communication.
a) I and II only.
b) III and IV only.
c) I, III and IV only.
d) II, III and IV only.

15

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 6.2

Which one of the following is a major benefit provided by Twitter?

a) Wide networks between people, based more on common interests than on personal friendships.
b) Hosting of business applications and support for marketing activities.
c) A platform for building up a knowledge base or reference work over a period of time.
d) The ability for members of the audience to establish their own priorities for content.

Question 6.3

Which one of the following is an important aspect for effective communication?

a) The parties to the communication having similar cultural backgrounds.
b) The message consumer being in close proximity to the message creator.
c) The message creator considering how cultural differences may impact the message being communicated.
d) The message consumer providing feedback to the message creator that they understand the message
being communicated.

Question 6.4

Which one of the following is accepted etiquette when using the Bcc field on an email?
a) Bcc should not be used as it implies the recipient is untrustworthy.
b) Bcc is best used when you want to share copies of an email with other recipients.
c) Bcc can be used sparingly where the identity of other recipients does not warrant disclosure.
d) A Bcc recipient understands that they should not reply back to the sender in case their identity
is uncovered.

Question 6.5

Which one of the following is a key reason that organisations should proactively support and foster a
knowledge-sharing environment?
a) The growth in teleworking.
b) The issue of an ageing workforce.
c) Increased business transparency.
d) Its absence can lead to tension and conflict in the workplace.

16

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 6.6

Which one of the following would most likely result in an organisation realising the benefits of social media?
a) Reducing control over communication channels.
b) Ensuring suitable network protections are in place.
c) Restricting staff access to the internet during work time.
d) Engaging a popular spokesperson to present their public image.

Question 6.7

Hodette Ltd (Hodette) is an Australian organisation with offices across Australia and South-east Asia.
Hodettes management has decided to offshore a range of finance and administration roles to India.
This decision will affect finance and administration staff in all of its offices. Management wants this change
to be communicated quickly and sensitively to its staff.
Which one of the following forms of business communication should Hodettes management select to
effectively communicate this change to staff in a timely and sensitive manner?
a) Conduct one-on-one discussions with affected employees and later formally announce the decision to
other staff in the organisation.
b) Record and broadcast an organisation-wide video message that will be delivered simultaneously to all
staff in the organisation.
c) Publish an organisation-wide communication (in a variety of languages) on the intranet and email a copy
of the communication to the affected staff.
d) Invite the affected staff to a group meeting where a two-way discussion about the decision will be
encouraged before formally announcing the decision across the organisation.

17

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

ANSWERS
Question 1.1
Correct Answer: c
Table 1.1 is adapted from an IFAC publication and identifies the characteristics of different-sized organisations.
A mid-sized organisation has the following characteristics.
Governanceadvisory board may be set upmostly insiders.
Financialexternal funding sought.
IT processeslikely to have a disaster recovery program.
A, B and D are incorrect as the characteristics in Table 1.1 do not align with small, SME or large enterprises.
Location in materials: The need for advice, Table 1.1

Question 1.2
Correct Answer: d
Family firms normally have both ownership and control, and so the traditional agency issue is the least likely
problem to arise.
Location in materials: Family-owned business

Question 1.3
Correct Answer: a
It is unlikely that you will be able to perform your role adequately or take appropriate care in ensuring the
work is at a competent level. Despite your lack of ability, you may still be able to retain your independence
and objectivity, and maintain confidentiality.
Location in materials: Ethical interaction

18

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.4
Correct Answer: c
The study guide defines Corporate social capital as a combination of intellectual capital, financial
soundness and an organisations ability to operate in alliances with, and absorb knowledge and capabilities
from, a network of external partners.
A is incorrect, as this is a definition of human capital.
B is incorrect, as this is a definition of human sigma.
D is incorrect, as this is a definition of corporate culture.
Location in materials: Part B: Human resource issues and complexityManaging peopleMaking business
sense of people-management issues

Question 1.5
Correct Answer: c
Option III refers to the supply side capability of providing advice, according to Xiao & Fu (2009).
Items I, II and IV are identified as demand factors influencing the need for advice.
A is incorrect as it excludes Option IV.
B is incorrect as it excludes Options I and II and includes Option III.
D is incorrect as it excludes Option II and includes Option III.
Location in materials: Part A: The need for advice, specifically Factors leading to demand for advice

19

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.6
Correct Answer: c
Activities that require predictions of future issues, challenges and opportunities are strategic in nature.
Such activities require the professional accountant to understand current trends and identify future issues.
It also requires the accountant to assess plans to address those issues or to take advantage of opportunities.
A is incorrect because this is a typical role that professional accountants perform and is an operational
task (i.e. it relates to activities that occur on a daily basis which are required for the organisation to
continue functioning).
B is incorrect because it is operational in nature (it relates to activities that occur on a daily basis which are
required for the organisation to continue functioning).
D is incorrect because it is operational in nature (it relates to activities that occur on a daily basis and which
required for the organisation to continue functioning).
Location in materials: Requests for advice: Operationalstrategicglobal

Question 1.7
Correct Answer: c
Family-owned businesses often include the family members who are the owners and shareholders of the
company and they also work in the organisation as employees. Dissention between family members is noted
as a major risk, especially where they occupy such dual roles.
A is incorrect because access to funding would depend on many factors and this issue is not specifically
identified as an issue experienced by family-owned businesses.
B is incorrect because research by Cadbury (2000) identified that family businesses often demonstrated strong
identity and clear, longer-term vision.
D is incorrect because this is not specifically identified as an issue for family-owned businesses. Innovation
brings with it an element of risk and uncertainty which is experienced by all types of organisations.
Location in materials: Providing strategic advice, specifically Family-owned business

20

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.8
Correct Answer: b
Paying council members good faith payments is effectively a bribe. This is unethical and would breach the
fundamental principles of ethics. Further, donations should be made without the expectation of consideration
(i.e. an item of value) in return. The cost and benefit analysis of such payments should not form part of the
accountants consideration.
A is incorrect because any cost savings should be realistic and take into account other costs that may
potentially reduce the cost savings over time. Thus, this should form part of the accountants consideration.
C is incorrect because the new oil extraction technique it is likely to contaminate the drinking water.
Accordingly, the decision to proceed with the new technique may have serious negative effects on ABCs
reputation and so this should form part of the accountants consideration.
D is incorrect because the new oil extraction technique has both positive and negative effects on the local
community that should be considered. The accountant should be unbiased and should compare all
perspectives. Thus, this should be part of the accountants consideration.
Location in materials: Addressing conflicts between organisational stakeholders

Question 1.9
Correct Answer: c
Performing a detailed costing analysis will identify the costs related to the toxic waste and allocate them to
each product. This then enables the management accountant and board to focus their attention on those
products with high toxic waste costs and consider ways to reduce these costs and associated toxic waste
by-products. This is an element of monetary environmental management accounting (MEMA).
A is incorrect because identifying the causes of the toxic waste would enable the management accountant
and the board to know what the drivers of the toxic waste are and they would then be able to look for ways
to reduce these drivers or look for possible substitutes which would then result in a reduction of waste
by-products. This is more an element of physical environmental accounting (PEMA).
B is incorrect because determining the amount of waste produced during the manufacture of each product
would enable the management accountant to identify those products that are the significant contributors to
the toxic waste by-products. This would then enable the board to focus their attention on the production
process for those products and determine possible alternative methods of production. This is an element
of physical environmental accounting (PEMA).
D is incorrect because separating the recyclable inputs from the toxic waste will lead to lower pollution and
waste recyclable inputs. This is an element of physical environmental accounting (PEMA).
Location in materials: Management accounting and the environment

21

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 1.10
Correct Answer: d
It is likely that the culture of the organisation is a problem. If the employees are not satisfied with the culture
and their treatment by managers, this may explain why they are leaving. Practical changes to improve the
working environment, such as higher salaries, training opportunities and career planning, are likely to help
address these problems.
A is incorrect because the board already realises that there is a problem. Evaluating the financial impact and
the effect on sustainability does not address or solve the problem.
B is incorrect because while a retention bonus may persuade some people to stay on with the company,
there are likely to be other underlying cultural or workplace environment issues that need to be addressed.
C is incorrect because compiling a list of issues and explanations does not address the problem of high
turnover. It simply highlights the problems but does not offer solutions or approaches to address them.
Location in materials: Role of the accountant in people management issues

Question 1.11
Correct Answer: a
The accountant has actually given a name to the problem (i.e. poor credit policies). There is no longer
uncertainty about the cause of the cash flow problem and it is now known. This would enable the organisation
to focus its attention on resolving the problem.
B is incorrect because bracketing is the stage where issues are grouped together based on common
characteristics with each other or similar past issues.
C is incorrect because presumption is the stage where concrete action is acknowledged. It would entail
linking the idea of a poor credit policy to other metrics such as bad debt and debtors turnover ratio.
D is incorrect because communication requires the senior accountant to communicate the problem formally,
including a detailed explanation of the fundamental causes.
Location in materials: Weick model

22

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.1
Correct Answer: b
A is incorrect as this is not an impact of dwindling resources, because it may or may not occur. It is often the
case that consumption rises (e.g. food consumption with a growing population), which causes dwindling
resources. As resources become scarce or depleted, consumption would likely fall.
B is correct as raw materials become scarce, they will become more expensivethe underlying theory related
to supply and demand.
C is incorrect as this is not an impact of dwindling resources, and recycling and reuse should increase to
mitigate the impacts of dwindling resources.
D is incorrect as this is not an impact of dwindling resources, but rather a shift in the role for accountants
and reporting.
Location in materials: Impact of dwindling resources

Question 2.2
Correct Answer: c
A is incorrect as this is a step in the reporting process for KPIs, not a way that they assist organisations in a
carbon-constrained economy.
B is incorrect as this is a benefit of taking action to implement energy-efficient or renewable-energy solutions.
C is correct as this is a key benefit of the use of KPIs for organisations operating in a carbon-constrained
economy.
D is incorrect as this is a result of operating in a carbon-constrained economy, but not a benefit of using KPIs.
Location in materials: Operating in a carbon-constrained economy, specifically UK: Environmental
performance reporting

23

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.3
Correct Answer: c
A is incorrect because after determining relevant KPIs, the audience needs to be identified. Also the final step
is to report on the relevant KPIs.
B is incorrect as the first step is to determine the relevant KPIs.
C is correct as, according to DEFRA (2011), this is the correct order in which the steps need to be followed
when reporting environmental KPIs for a typical service industry business.
D is incorrect as the first step is to determine the relevant KPIs.
Location in materials: Operating in a carbon-constrained economy and UK: Environmental performance
reporting, specifically Figure 2.11

Question 2.4
Correct Answer: c
A is incorrect because a lack of soft skills is often attributed to Generations Y and Z rather than baby boomers.
B is incorrect as baby boomers may not be as technologically savvy as their younger counterparts, but this is
not the biggest concern for the company.
C is correct as the company faces significant issues with loss of knowledge gained over many years by the
baby boomer managers when they retire. The process of transferring their knowledge needs to be managed
carefully to ensure it is passed on to the next generation of employees.
D is incorrect because paying large leave balances does not affect profitability because it is already recorded
as an expense when it is incurred.
Location in materials: The effect of different generations in the workforce and Succession planning and
business exit

24

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.5
Correct Answer: d
A is incorrect as outsourcing occurs when management of a business function is provided by a third-party.
B is incorrect as the function will not be provided by a third-party but will remain in-house (although performed
by employees in India).
C is incorrect as outsource offshoring occurs when the function is moved overseas and is provided by a
third-party.
D is correct as the business function is moving overseas, but control remains with the company.
Location in materials: Part D: Offshoring, specifically Types of offshoring

Question 2.6
Correct Answer: c
Despite the introduction of gender equality legislation and a changing attitude about the role of women in
the labour force, data from the Workplace Gender Equality Agency (2014) highlights that female workers
continue to be paid, on average, 17.5 per cent less than male workers.
A is incorrect because there is no mention in the data from the Workplace Gender Equality Agency (2014)
of fewer women than men undertaking tertiary education.
B is incorrect. The data from the Workplace Gender Equality Agency (2014) does not indicate that women are
getting paid the same as men. In fact, the report highlights that the national gender pay gap has hovered
between 15 per cent and 18 per cent for the past two decades.
D is incorrect because there is no mention in the data from the Workplace Gender Equality Agency (2014)
of women comprising 40 per cent of members in the Australian Parliaments House of Representatives.
Location in materials: Part C: The changing population, specifically Gender diversity in the workplace

25

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.7
Correct Answer: c
An effect of the GFC has been the increased number of mature-age workers, most of them baby boomers,
who have chosen to stay in the workforce longer to rebuild their diminishing superannuation funds (ABS 2012).
A is incorrect. While mature-age workers are seeking greater retirement income, there is no mention in the
ABS 2012 research of them changing positions.
B is incorrect as the opposite is the case, because mature-age workers are not retiring but are instead
deferring retirement (ABS 2012).
D is incorrect. While mature-age workers are deferring retirement, the reason is because they hope that they
can rebuild their diminished superannuation funds (ABS 2012).
Location in materials: International demographic trends, specifically The effect of different generations in
the workforce

Question 2.8
Correct Answer: c
Payroll is generally considered to be a low value-add activity that can be easily mechanised and undertaken
by a third party, including offshore providers.
A is incorrect because financial accounting is considered to be a more strategic activity that can be used to
create business wealth. Therefore, managers are more likely to keep it in-house rather than payroll activities.
B is incorrect because internal audit is considered to be an activity that adds greater value to the business
than payroll activities, and is considered more difficult to automate.
D is incorrect because activities relating to tax are considered to be higher value add activities to the
business than payroll, and are considered more difficult to automate.
Location in materials: Offshoring, specifically Figure 2.16: Offshoring evolution of finance activities
over time

26

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 2.9
Correct Answer: c
The most likely activity to be offshored according to a June 2009 survey of 227 CPA Australia members is
IT (14.6%).
A is incorrect because the June 2009 survey of CPA Australia members rates call centre activities as the fourth
most popular activity to offshore (7.2%).
B is incorrect because the June 2009 survey of CPA Australia members ranks finance and accounting activities
behind IT in terms of popular items to offshore (11.7%).
D is incorrect because the June 2009 survey of CPA Australia members ranks manufacturing third most
popular behind IT and finance and accounting as a popular activity to offshore (9.7%).
Location in materials: Offshoring, specifically Australia in depth: Offshoring as a business strategy
in Human resource issues and complexity

Question 2.10
Correct Answer: c
Process harmonisation is associated with doing the same things in the same way; it creates labour
consolidation efficiencies by adding process, streamlining to build further scale benefits, and providing
increased service quality and cost through having fewer process exceptions.
A is incorrect because this describes the benefits associated with differences in salaries across locations.
B is incorrect as this describes the benefits associated with doing the same things in the same place as
distinct from doing the same things in the same way.
D is incorrect because this describes the benefits associated with the establishment of new trading
relationships and environments.
Location in materials: Offshoring, specifically Implementing a Successful Offshore Outsourcing Program
and Business Partnering

27

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.1
Correct Answer: d
This is a role of forensic auditing, which focuses on detection and involves scrutinising documents,
establishing chains of custody and investigating the particulars of a case.
A is incorrect because one of the increasingly important roles of forensic accountants is the investigation
of business crime.
B is incorrect because forensic accounting tasks are broad and encompass all relevant areas to do with
detecting, investigating and preventing fraud. In addition, forensic accounting involves assisting in dispute
resolutions and court proceedings, as well as providing forensic reports.
C is incorrect because while a forensic audit focuses on detection and involves scrutinising documents,
establishing chains of custody and investigating the particulars of a case, forensic accounting tasks are
broader and encompass all relevant areas to do with detecting, investigating and preventing fraud.
In addition, forensic accounting involves assisting in dispute resolutions and court proceedings, as well
as providing forensic reports.
Location in materials: An overview of forensic accounting

Question 3.2
Correct Answer: d
Integrity benchmarking is a proactive role in business crime investigation.
A is incorrect as tracing funds is a reactive role in business crime investigation.
B is incorrect as penetration testing is a proactive forensic technology role, not a role in business
crime investigation.
C is incorrect as assisting benchmarking is a proactive dispute advisory role, not a role in business
crime investigation.
Location in materials: An overview of forensic accounting and Forensic accounting roles,
specifically Table 3.1

28

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.3
Correct Answer: b
Unusual employee behaviour is a fraud indicator; however, a normally shy, quiet and reserved employee
receiving a promotion does not, in itself, raise alerts as to the possibility of workplace fraud being committed.
A is incorrect as this is a possible indicator of fraud. A junior employee would not usually receive a salary that
would support a very extravagant lifestyle.
C is incorrect as this is a possible indicator of fraud. This could mean accounting anomalies are being
processed in the financial statements to hide or manipulate transactions.
D is incorrect as this is a possible indicator of fraud. Staff changes and interim approval measures may indicate
weaknesses in internal controls.
Location in materials: Detecting business crime, specifically Recognising typical symptoms of fraud

Question 3.4
Correct Answer: c
CartRefill has offered a bribe to the office manager to entice them to purchase the cartridges, which are
above standard price and would not be purchased otherwise.
A is incorrect as workplace fraud is internally instigated and relates to misappropriation of company property.
B is incorrect as misuse of position relates to using information associated with the organisation that is not
known generally to gain an advantage.
D is incorrect as externally instigated fraud occurs when a party external to the company uses false details or
documentation to obtain the companys property.
Location in materials: Business crime, specifically Bribery and corruption (local) and Bribery and corruption
(international)

29

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.5
Correct Answer: b
Timing differences relate to recording revenues in the incorrect financial period in order to alter the reported
financial results.
A is incorrect as fictitious revenues have not occurred and are unlikely to occur. In this case the sale will occur
but in the next financial year.
C is incorrect as improper disclosures relate to the failure to disclose material financial information or
disclosing false information. In this case, timing differences is a more appropriate response.
D is incorrect as concealed liabilities is the failure to record liabilities incurred by the entity.
Location in materials: Business crime, specifically Financial statement fraud

Question 3.6
Correct Answer: a
When providing expert witness services in accordance with APES 215, the primary duty of the expert witness
is to the Court, which overrides any duty to the client or employer (APES 215.5.4).
B is incorrect as, while these are requirements of the forensic accountant, when providing expert witness
services, the paramount duty is to the Court.
C is incorrect as this is a requirement of the report, not the paramount duty of the forensic accountant when
providing expert witness services.
D is incorrect as these are requirements for the report style, not the paramount duty of the forensic
accountant when providing expert witness services.
Location in materials: The forensic accountants role in investigating business crime, specifically
Phase 6: Reporting

30

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 3.7
Correct Answer: d
Segregation of duties is an effective internal control measure. It would reduce the risk of false transactions
being approved on the bank reconciliation.
A is incorrect as transactions could still be falsified even if they are on the bank statement and approval by
the CFO would fail to control this.
B is incorrect as this is a control related to minimising risk related to false invoicing by suppliers, but a more
relevant mitigation strategy for cash management would be to check invoices against purchase orders and
delivery receipts before payment is made.
C is incorrect as it is important to implement controls to reduce the risk of business crime before it occurs,
analysis of transactions at the end of the year would only identify fraud that had already occurred.
Location in materials: Preventing business crime, specifically The importance of a robust internal
control environment.

Question 4.1
Correct Answer: d
A, B and C are specifically mentioned in the proposed Basel III reforms.
D is a market-based tool which some companies may employ to help them manage liquidity, but it is not
required by Basel III reforms.
Location in materials: Basel III reforms

Question 4.2
Correct Answer: c
GPWARs are issued by bodies responsible for water storages, not bodies responsible for coastal
harbours. This eliminates option IV. Examples in options I, II and III are all taken from the introduction
to the Water Accounting Conceptual Framework (paragraph 20), as examples of the needs of users and
the types of decisions they could make based on the water information.
A is incorrect because it does not contain all the relevant examples.
B and D are incorrect because they both include option IV.
Location in materials: Part D: Water reporting

31

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 4.3
Correct Answer: a
Problems with progress on convergence, especially between the IASB and FASB, relate to the problem of
giving ground on setting rules that affect domestic companies.
B is incorrect because, although it reflects the likely view of world leaders, it is not specifically related to
setting accounting standards.
C is incorrect because it does not necessarily follow that international agreement on setting accounting
standards will lead to influence over decisions relating to other sections of the economy, such as farmers.
D is incorrect because the IASB has a broad membership, not just the United States, Japan, Australia and
members of the European Union.
Location in materials: Progress on the global adoption of IFRS to International Financial Reporting
Standards

Question 4.4
Correct Answer: a
Public sector organisations are required to deliver a service, while being under increasing pressure to
demonstrate high performance and achieve outcomes for a reasonable financial cost. An integrated report
will include details of performance and financial cost.
B: Not correct because all stakeholders are unlikely to have the same information needs. In addition,
they are unlikely to be satisfied with a simple report of finances because stakeholders are interested in the
organisations ability to deliver services.
C: Not correct because integrated reports are not designed to meet the needs of a public sector
organisations largest stakeholders only. They are designed to meet a range of needs of a variety of users,
and are premised on the principle of stakeholder inclusivity, not exclusivity.
D: Not correct because a business case for integrated reporting does not require a public sector entity
to demonstrate a financial surplus. It may be acceptable to make no surplus, or a loss, if services are
delivered for a reasonable cost and other objectives are met.
Location in materials: Part C: Integrated reportingIntegrated reporting framework, particularly
Example 4.6. Part B: Integrated Reporting

32

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 4.5
Correct Answer: d
It is an accurate statement that the International Auditing and Assurance Standards Board (IAASB) has
issued ISAE 3410 Assurance Engagements on Greenhouse Gas Statements. This standard details an
assurance practitioners responsibilities when providing reasonable or limited assurance on a greenhouse
gas statement issued by an organisation.
A is incorrect. AA1000AS was issued by AccountAbility and not the IAASB. Also, assurance practitioners
applying AA1000AS are less likely to certify or provide an opinion and are more likely to consider an
organisations sustainability performance and make recommendations on improvements.
B is incorrect because the IAASB has done substantial work in recent years on sustainability reporting,
including issuing ISAE 3410 Assurance Engagements on Greenhouse Gas Statements in 2012.
C is incorrect as the Australian Water Accounting Standard (AWAS) 2 was issued by Water Accounting
Standards Board and the Bureau of Meteorology.
Location in materials: Part D: Verification and assurance of non-financial reporting disclosures

Question 4.6
Correct Answer: b
The IASB is working on fair value accounting as part of its response to the GFC because there are
differences between IFRS and US GAAP on fair value accounting standards. This is because there are
multiple and different impairment models that relate to different financial asset types in different ways.
In the initial period of the GFC, fair value accounting (mark-to-market) was viewed as an important factor
in causing and spreading the GFC.
A is incorrect because the IASB does not necessarily want standards that are likely to be used often, but rather
wants to make standards on issues that are relevant and important.
C is incorrect because while it is true that excess leverage, low interest rates and trade imbalances caused the
GFC, this is not the reason why the IASB is working on fair value accounting and asset impairments as part
of its response.
D is incorrect because SPEs are not more likely than other entities to need standards on asset impairment.
The primary issue with SPEs during the GFC was related to the lack of transparency of off-balance sheet
transactions.
Location in materials: Part A: Developments in financial reporting and banking regulationsImpact of the
Global Financial Crisis on accounting standards

33

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 5.1
Correct Answer: c
This answer is a direct quote from the study guide. Trust is built up over a period of time throughout the
development of a relationship. The exchanging of information as part of this relationship enhances trust,
and builds the relationship.
A is incorrect, as trust takes time to build.
B is incorrect, as trust does have an emotional element.
D is incorrect, as trustworthiness can only be developed in an open and transparent environment.
Location in materials: Trust, openness and transparency

Question 5.2
Correct Answer: a
As stated in the study guide, the nature of knowledge is such that it cannot be elicited on demand.
The correct environment must be in place for knowledge to be volunteered. In order for employees to
volunteer their knowledge, trust must be established. This requires an environment of openness and
good faith.
B is incorrect, as knowledge cannot be conscripted.
C is incorrect, as technology (while a useful tool to publish or broadcast information once recorded)
cannot by itself create the sharing of knowledge.
D is incorrect as the need to share knowledge in an organisation is not solely driven by baby boomers
nearing retirement age.
Location in materials: Trust, openness and transparency

34

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 5.3
Correct Answer: b
Intellectual property (IP) is defined in the study guide as creations of the mind, such as inventions, names,
images and designs, used in commerce. IP relates to items of information or knowledge, which can be
incorporated in tangible objects at the same time in an unlimited number of copies at different locations
anywhere in the world. The property is not in those copies but in the information or knowledge reflected
in them.
A is incorrect, as this describes what is usually described as human capital.
C is incorrect, as this broadly describes intangible assets, rather than IP.
D is incorrect, as this describes property rights in general, rather than IP.
Location in materials: Part B: Protecting intellectual propertyWhat is intellectual property?

Question 5.4
Correct Answer: a
The study guide states that owners of intellectual property (IP) must police and protect their own IP. It is not
the role of government to actively supervise this area.
Options B, C and D are all valid methods for enforcing IP rights and are listed in the study guide.
Location in materials: Part B: Protecting intellectual propertyEnforcing rights over intellectual property

Question 5.5
Correct Answer: d
Rapid action to conserve the situation is identified in the study guide as a conservatory or provisional measure.
A is incorrect, as this describes border measures.
B is incorrect, as this describes additional action that can arise from both civil and criminal procedures.
C is incorrect, as this describes criminal procedures and sanctions.
Location in materials: Part B: Protecting intellectual propertyEnforcing rights over intellectual property

35

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 5.6
Correct Answer: b
Copyright usually lasts at least 50 years after the death of the author, and up to 70 years.
A is incorrect, as patents usually last a maximum of 20 years.
C is incorrect, as a utility model usually lasts for seven to 15 years.
D is incorrect, as sound recordings come under the realm of related rights rather than patents. Further,
submission of a patent application does not necessarily mean a patent was granted.
Location in materials: Part B: Protecting intellectual propertyTypes of intellectual property

Question 6.1
Correct Answer: c
Step II is not one of the steps, as the description in the study guide of the third step in the plan quite
clearly states that there will be multiple target audiences for communications, and that an understanding of
the different contexts, needs and motivations of each is critical. Steps I, III and IV are all correct steps of a
detailed communication plan as described in the content.
Location in materials: Communicating with an audience

Question 6.2
Correct Answer: a
Twitter is described in the study guide as a microblogging service, providing short text messages to be
communicated online. It allows networks to be formed by individuals choosing to follow others on
the platform.
B is incorrect, as this describes Facebook. Twitter cannot host applications, although it can be used for
marketing activities.
C is incorrect, as this describes Wikis. Twitter does provide a searchable record of messages, but does not
provide any structure to these, and thus cannot act as a true knowledge base or reference
work. Twitter messages also tend to be more about current activities and updates than historical content.
D is incorrect, as this describes RSS (i.e. Really Simple Syndication). Twitter users can choose who they follow,
but Twitter provides no priorities for viewing messages.
Location in materials: Social Media

36

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 6.3
Correct Answer: c
For communication to be effective, the cultural context of any communication initiative should be considered.
This is particularly important in international business, where it is most likely that cultural differences will exist.
A is incorrect because having similar cultural backgrounds is not a requirement for effective communication.
Communication can still occur between individuals even if language or cultural barriers exist. Instead, it is far
more important to consider the cultural context of the communication initiative so the message is decoded by
the consumer in the way it was intended from the message creator.
B is incorrect because communication comes in many different forms and does not require the parties to the
communication to be nearby to each other for the communication to be considered effective.
D is incorrect because encouraging a feedback loop does not necessarily mean that the initial message was
effective or that the desired outcome was achieved. For example, where the culture is respectful and seeks to
avoid confrontation, the consumer may just agree with whatever is being said to them.
Location in materials: Part A: Communication in business, specifically Cross-cultural communication

Question 6.4
Correct Answer: c
While in most cases using the Bcc field should be avoided, it can be used sparingly. People who are on
the Bcc list will have their names and email addresses hidden from all the other recipients of the email.
For example, when sending emails, particularly to people outside an organisation, it may be important not
to disclose personal email addresses to the other recipients (for privacy reasons). This is one example of
where the Bcc field can be used.
A is incorrect because Bcc can be used in email messages. However, in most cases, this field should be
avoided, as it can imply secrecy or collusion on the part of the email sender, rather than that the
recipient/consumer is untrustworthy.
B is incorrect because Cc is the accepted etiquette where there is a reason for other recipients to receive a
copy of the email.
D is incorrect because it is acceptable for a Bcc recipient to reply to the sender of the email. However,
the Bcc recipient should exercise caution and not inadvertently Reply all - unless they believe that all the
other recipients of the email actually need to see their reply.
Location in materials: Part A: Communication in business and Communication etiquette and risks,
specifically Example 6.3

37

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 6.5
Correct Answer: b
It is becoming critical to ensure that employees who are reaching retirement age are given the appropriate
opportunity and encouragement to share their tacit knowledge of key business matters before leaving the
organisation. This is particularly the case with staff who have significant expertise that has not been developed
elsewhere in the organisation.
A is incorrect because the growth in teleworking does not necessarily create communication or knowledgesharing problems. Teleworking provides an alternative for staff to work in places other than a fixed office
location. This should not present any additional knowledge-sharing issues that are not already evident in a
centralised work environment.
C is incorrect. While this is an important outcome, it is not a key reason. In some workplaces, there may be
evidence of people who horde and guard their knowledge rather than transferring it to others. This is not
usually a widespread problem for organisations.
D is incorrect. Although this is an important issue, it is not a key reason. In some workplaces, the absence of
knowledge sharing can have negative implications, although this situation is not usually a widespread
problem for organisations.
Location in materials: Part B: How businesses use ICT, specifically Knowledge sharing and Why businesses
use knowledge sharing

Question 6.6
Correct Answer: a
Businesses use social media to engage with their target audiences. To facilitate this, social media must have
two-way communication to build and retain the trust and confidence of stakeholders. To gain the benefits
of social media, organisational leaders need to reduce the level of control traditionally exerted over
communications channels. With social media, employees, customers and other stakeholders can become
equal partners in a conversation, rather than just passive consumers of information.
B is incorrect. Although suitable networks are required to prevent hacking and viruses, they should not be
used to block or restrict access. This can result in negative implications for the organisation.
C is incorrect. Research by the University of Melbourne has shown that productivity actually increases where
staff are able to access the internet during work time (Holtz 2010). Restricting staff access to the internet will
not result in benefits to the organisation.
D is incorrect because it is more important that the person engaged as the spokesperson for the organisation
always behaves appropriately and is aware that what they present can affect the organisations public image.
The engagement of a popular public person (such as a celebrity or sportsperson) may not always result in the
intended benefits.
Location in materials: Part B: How businesses use ICT, specifically Risks and challenges

38

CONTEMPORARY BUSINESS ISSUES

SUGGESTED ANSWERS |

Question 6.7
Correct Answer: d
This method meets the timeliness and sensitivity criteria set by management. Face-to-face presentations
are useful for a group in a single location, where the timing of communication is more critical. Also, the
communication would be delivered in the local language. The two way nature of this meeting considers the
needs of the target audience as equal partners in the conversation, rather than just passive consumers
of information.
A is incorrect. While this is the most sensitive option, it is not the most timely or efficient. The individual
communication of managements decision to affected employees may involve a very lengthy process.
Hodette would run the risk of the message being shared prematurely or incorrectly with other affected
staff members.
B is incorrect because this method is an insensitive and somewhat impersonal way to deliver unfavourable
news to the target audience (the affected staff members). A video is more suitable for making material
available over longer time frames and across time zones. Hodette has also not advised if the communication
would be produced in a number of different languages, which may present further issues.
C is incorrect. Although a targeted email is a suitable choice for the general distribution of information
to many recipients in a short time frame, given the type of communication Hodette has to deliver to its
staff, this method is highly impersonal.
Location in materials: Part A: Communication in business, specifically Forms of business communication

39