Series: NOV 2015

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CSME – Nov 2015 – L2 – Q7 – Corporate Strategy Formulation

Analyzes reasons for slow growth in DAB phone sales, uses the S-shaped growth curve to evaluate market stages, and suggests sales improvement strategies.

Question

Ade John is a graduate of XYZ University. For his final project work in the Department of
Electronics and Electrical Engineering, he designed a cell-phone that is rugged, cheap,
handy and not sophisticated.
During his national service year, he kept toying with the idea of manufacturing the cellphone. To ascertain that there is a market for the phone, he carried out a series of market surveys among rural farmers, artisans, market women, etc. Each time, he was convinced that a market actually exists for his design. He also made contact with some manufacturers of cell-phone components. He entered
into an agreement with CKT Japan to import cell-phone accessories to enable him
assemble them in Nigeria. DAB phone is the first of its kind in the Nigerian market and
production and assembly commenced in a small room in his uncle‟s house at Ikare.
The first batch of phones manufactured by DAB Company was supplied to cell-phone
vendors in cities on „sale or return‟ basis. To encourage distributors to accept the
phones, a 15% margin was allowed. In addition, independent sales persons (hawkers)
were given between 10 -12% margin to sell the product. In spite of the low price of DAB
phones, demand was disappointing at the end of the first year. Nevertheless, Ade John is
still optimistic about the commercial viability of the phone if only he could develop an
effective strategy to market the DAB phones

Required:
a. Identify and explain TWO reasons for the slow growth of sales of DAB phones. (4 Marks)
b. With the aid of an S-shaped growth curve, evaluate market development of DAB phones. (6 Marks)
c. Recommend the strategies that Ade John can use to improve sales. (5 Marks)

Answer

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Tags: Market Entry, Product Development, S-shaped Growth Curve, Sales Strategy
Level: Level 2

Topic: Corporate Strategy Formulation
Series: NOV 2015

CSME – Nov 2015 – L2 – Q6 – Corporate Governance

Evaluates how specific corporate governance issues impact the effectiveness of a company's governance.

Question

Explain briefly how the following key issues in corporate governance establish how well or badly a company is governed:

a. The role and responsibilities of the board of directors
b. The composition and balance of the board of directors
c. Financial reporting, narrative reporting, and auditing
d. Directors’ remuneration
e. Risk management and internal control

Answer

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Tags: Board Composition, Corporate Governance, Directors’ Remuneration, Financial Reporting, Risk Management
Level: Level 2

Topic: Corporate Governance
Series: NOV 2015

CSME – Nov 2015 – L2 – Q5 – Corporate Governance

Outlines key responsibilities and duties of the board in corporate governance, relevant for improving corporate structure and performance.

Question

The owner of ABC Company learned from a conference and a professional magazine that weak corporate governance accounted for recent corporate failures in Nigeria. Many board members were found lacking a clear understanding of board responsibilities and duties.

Required:
The Managing Director will soon address the board and has requested a paper detailing the board’s responsibilities and duties.

Answer

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Tags: Accountability, Board Duties, Board Structure, Corporate Governance, Strategic Oversight
Level: Level 2

Topic: Corporate Governance
Series: NOV 2015

CSME – Nov 2015 – L2 – Q4 – Risk Management and Corporate Strategy

Analyzes strengths and weaknesses of Toyin Trust Insurance Plc pre- and post-2000 ownership changes, and suggests strategies for sustaining the company.

Question

Toyin Trust Insurance Company is one of the duly registered insurance companies in Nigeria. Ten years after it started operations in 1990, the company had become a household name in the market. Its strengths included timely payment of claims and introduction of quality products that captured changing customers’ needs.

At inception, the company was 100% foreign-owned, with five of the seven directors being experienced expatriate insurance practitioners. However, by 2000, over 90% of the equity had been transferred to Nigerian investors. In 2009, following reorganization, many experienced senior managers resigned, and inexperienced staff took over key positions, leading to a decline in service quality and a 40% drop in premium collection.

Required:

a. Analyze the strengths of Toyin Trust Insurance Plc before 2000. (5 Marks)
b. Analyze the strengths and weaknesses of Toyin Trust Insurance Plc after 2000. (5 Marks)
c. Suggest essential strategies to sustain Toyin Trust Insurance Plc. (10 Marks)

Answer

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Tags: Business Growth, Organizational Challenges, Risk Mitigation, Strategic Management
Level: Level 2

Topic: Corporate Governance, Risk Management and Corporate Strategy
Series: NOV 2015

CSME – Nov 2015 – L2 – Q3 – Ethics in Business

Describes the nature of business and professional ethics, Kohlberg’s theory of moral development, and criticisms of the theory.

Question

Kalu, a competent consultant and accountant, works in Bosun and Company Limited. The company realized that almost all of its newly employed entry-level staff are deficient in business and professional ethics. Consequently, the Human Resources Manager recommended to the CEO that a training program on business and professional ethics should be organized. Kalu is nominated as a resource person to speak at the training program.

Required:
a. How should Kalu explain the nature and importance of business ethics and professional ethics? (6 Marks)
b. Advise Kalu on how he should analyze Kohlberg’s theory of moral development in an attempt to explain to the trainee participants how people generally develop a sense of morality both in personal and professional life. (10 Marks)
c. Discuss any TWO of the criticisms of Kohlberg’s theory. (4 Marks)

Answer

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Tags: Business Ethics, Ethical Training, Kohlberg’s Theory, Moral Development, Professional Ethics
Level: Level 2

Topic: Ethics in Business
Series: NOV 2015

CSME – Nov 2015 – L2 – Q2 – Risk Management and Corporate Strategy

Develops a risk management program for theft, diversion, and safety issues; includes risk reduction and financing techniques.

Question

Dolly Homes Plc is a real estate firm based in Abuja. The firm builds residential apartments and office blocks in five states of the federation. The objective of Dolly Homes Plc is to deliver high-quality, aesthetically designed, and professionally built homes/offices to its customers at competitive prices. It employs several skilled and casual workers, construction supervisors, construction engineers, architects, and quantity surveyors.

The company maintains a store at each of its building sites, each manned by a storekeeper and an assistant. Building materials are purchased centrally and delivered to sites per material schedules prepared by the quantity surveyor.

Patronage from middle and high-income brackets has been impressive; however, recently, the company has been receiving complaints about poor quality. The most alarming complaint involved a legal threat for injuries sustained when a kitchen cabinet collapsed in a client’s home.

Management’s investigation revealed theft of materials, diversion, and re-work waste due to poor finishing. There were also job site accidents, leading to employee injuries, lost hours, and increased medical claims.

Management decided to establish a risk management program to address theft, diversion, and health/safety issues.

Required:
a. As an Accountant, develop a risk management program to address Dolly Homes Plc’s problems. (8 Marks)
b. Advise management on techniques to reduce the frequency of risk exposures in the future. (6 Marks)
c. Suggest risk financing techniques to protect the company’s staff from injuries and accidents. (6 Marks)

Answer

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Tags: Construction Industry Risks, Risk Financing, Risk Management, Safety Measures, Theft Prevention
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2015

CSME – Nov 2015 – L2 – Q1c – Corporate Governance

Discusses the difference between rules-based and principles-based professional ethics in accountancy.

Question

What is the main difference between a rules-based and a principles-based code of professional ethics for accountants?

Answer

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Tags: Accountancy Ethics, Principles-Based Ethics, Professional Conduct, Rules-Based Ethics
Level: Level 2

Topic: Corporate Governance
Series: NOV 2015

CSME – Nov 2015 – L2 – Q1b – Risk Management and Corporate Strategy

Discusses various methods for managing and controlling risks in an organization, illustrating different risk management techniques.

Question

There are different methods of managing and controlling risks. Explain and illustrate any THREE of the following approaches to risk management:
i. Risk Diversification
ii. Risk Transfer
iii. Risk Sharing
iv. Risk Hedging (15 Marks)

Answer

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Tags: Credit risk, Risk Diversification, Risk Hedging, Risk Sharing, Risk Transfer
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2015

CSME – Nov 2015 – L2 – Q1a – Risk Management and Corporate Strategy

Explains credit risk management concepts, including exposure, losses, residual risk, and appetite.

Question

The finance director of Basket Company is preparing a proposal to present to the board of directors. He believes that the company is much too cautious in its policy of giving credit to customers. At the moment all customers are given 30 days’ credit. He believes that by increasing its exposure to credit risk, and increasing credit terms to 60 days, the company will achieve an increase in annual sales of up to 20%. He also thinks that some improvements in debt collection procedures will reduce the level of bad debts, although some bad debts cannot be avoided. He thinks that the value of sales where there is a default will fall each year from 2% of sales to 1.8% of sales. He proposes that in order to increase annual sales and profits, the company should be willing to increase its risk appetite and accept the risk of higher bad debts.

Required:

Using this example of managing credit risk, explain and illustrate the meaning of:
i. Exposure to risk
ii. Risk of losses
iii. Residual risk
iv. Risk appetite

Answer

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Tags: Credit Period, Credit risk, Exposure to Risk, Residual Risk, Risk Appetite, Risk of Losses
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2015

PSAF – Nov 2015 – L2 – Q7 – Public Sector Reforms

Distinguish between basic infrastructure and development projects with examples and identify funding sources and characteristics.

Question

In order to achieve some development objectives, nations place emphasis on priority programmes like the provision of basic infrastructure and development projects, all of which require appropriate funding.

Required:

a. By means of specific relevant examples, distinguish between “basic infrastructure” and “development projects”. (3 Marks)

b. Discuss TWO development objectives which the priority programmes you refer to in (a) above are planned to achieve. (4 Marks)

c. Identify TWO sources of funding for these priority projects stating TWO distinct characteristics of each source identified and TWO factors that facilitate the commercial viability of the projects. (8 Marks)

Answer

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Tags: Basic Infrastructure, Development Projects, Funding, Public Finance, Viability
Level: Level 2

Topic: Public Sector Reforms
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q4c – Business Ethics and Corporate Governance

List three items that may constitute fraudulent false accounting under Nigerian laws.

Question

statement prepared by him and should not engage in any fraudulent false accounting.

Required:

Enumerate THREE items that may constitute fraudulent false accounting under Nigerian laws.
(6 Marks)

Answer

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Tags: Corporate Ethics, False Accounting, Fraud, Nigerian Law
Level: Level 1

Topic: Business Ethics and Corporate Governance
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q4b – The Nigerian Legal System

State three conditions for the admissibility of computer and electronically generated evidence in Nigerian courts.

Question

Computer and electronically generated evidence are admissible in Nigerian courts by virtue of the provisions of the Evidence Act, 2011.

Required:

State THREE conditions for the admissibility of computer and electronically generated evidence under Nigerian laws.
(6 Marks)

Answer

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Tags: Computer Evidence, Electronic Evidence, Evidence Act 2011, Nigerian Laws
Level: Level 1

Topic: The Nigerian Legal System
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q4a – Law of Tort

Define negligence in tort law and outline the elements a plaintiff must establish to succeed in an action for negligence.

Question

. Law of tort deals with civil wrongs, a breach of which attracts damages.

i. What is negligence in the law of tort?
(2 Marks)

ii. What must a plaintiff establish for him to succeed in an action for negligence?
(6 Marks)

Answer

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Tags: Breach of Duty, Causation, Civil Wrongs, Duty of Care, Negligence, Tort Law
Level: Level 1

Topic: Law of Tort
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q3b – Business Ethics and Corporate Governance

State the limitations on cash payments under the Money Laundering (Prohibition) Act 2004.

Question

The Money Laundering (Prohibition) Act 2004 contains important provisions aimed at preventing money laundering, one of which is the limitation on the amount of cash payment.

Required:

State the limitation on the amount of cash payment under the Act.
(5 Marks)

Answer

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Tags: Cash Payment Limitation, Corporate Governance, Financial Crimes, Money laundering
Level: Level 1

Topic: Business Ethics and Corporate Governance
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q3a – Law of Contract

Explain three types of fraud-related offences under the Criminal Code.

Question

The Criminal Code does not create a single general offence of fraud, instead, there are a number of offences that are fraud related.

Required:

Explain briefly THREE offences of fraud.
(15 Marks)

Answer

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Tags: Criminal Code, Fraud, Fraudulent Acts, Offenses of Fraud
Level: Level 1

Topic: Law of Contract
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q2b – Company Law

Explain two ways shareholders can influence the composition of the board and decisions in a company.

Question

In a Limited Liability Company, there could be no membership of the Board of Directors except by the actions of shareholders.

Required:

Explain TWO ways by which shareholders could influence the composition of the Board and decisions of the company.
(5 Marks)

Answer

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Tags: Board of Directors, Company Law, Corporate Governance, Shareholders
Level: Level 1

Topic: Company Law
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

Question

Any two or more persons may form and incorporate a company by complying with the requirements of the Companies and Allied Matters Act.

Required:

Briefly explain FOUR documents required to be filed with the Corporate Affairs Commission for the incorporation of a company.
(10 Marks)

Answer

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Tags: CAMA, Company Documents, Company Incorporation, Corporate Affairs Commission
Level: Level 1

Topic: Company Law
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q1c – Company Law

Describe two consequences of a company's winding-up on its shareholders.

Question

When a company is wound-up, there are consequences that affect the shareholders of the company.

Required:

Explain briefly TWO consequences of the winding-up of a company on the shareholders.
(4 Marks)

Answer

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Tags: Company Liquidation, Shareholders’ Rights, Winding-up
Level: Level 1

Topic: Company Law
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q1b – Company Law

Describe four circumstances in which a director must vacate office in a company.

Question

Directors of a company are the executives that direct the affairs of the company. Thus, such an important position must have certain attributes and be guided by prescribed rules.

Required:

Explain briefly FOUR circumstances under which a person must vacate office as director of a company.
(8 Marks)

Answer

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Tags: Company Law, Corporate Governance, Directors, Removal of Directors
Level: Level 1

Topic: Company Law
Series: NOV 2015

BL – Nov 2015 – L1 – SA – Q20 – Law Relating to Banking

Identifying non-functions of the Central Bank of Nigeria.

Question

Which of the following is NOT a function of the Central Bank of Nigeria?
A. Issuing and distribution of Nigerian currency
B. Issuing and dealing in shares and debentures
C. Management of Nigeria’s external reserves
D. Promotion of monetary stability
E. Banker and financial adviser to government

Answer

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Tags: Banking Law, Central Bank, Financial Functions, Multiple Choice
Level: Level 1

Topic: Law Relating to Banking
Series: NOV 2015

Series: NOV 2015

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CSME – Nov 2015 – L2 – Q7 – Corporate Strategy Formulation

Analyzes reasons for slow growth in DAB phone sales, uses the S-shaped growth curve to evaluate market stages, and suggests sales improvement strategies.

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CSME – Nov 2015 – L2 – Q6 – Corporate Governance

Evaluates how specific corporate governance issues impact the effectiveness of a company's governance.

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CSME – Nov 2015 – L2 – Q5 – Corporate Governance

Outlines key responsibilities and duties of the board in corporate governance, relevant for improving corporate structure and performance.

You're reporting an error for "CSME – Nov 2015 – L2 – Q5 – Corporate Governance"

CSME – Nov 2015 – L2 – Q4 – Risk Management and Corporate Strategy

Analyzes strengths and weaknesses of Toyin Trust Insurance Plc pre- and post-2000 ownership changes, and suggests strategies for sustaining the company.

You're reporting an error for "CSME – Nov 2015 – L2 – Q4 – Risk Management and Corporate Strategy"

CSME – Nov 2015 – L2 – Q3 – Ethics in Business

Describes the nature of business and professional ethics, Kohlberg’s theory of moral development, and criticisms of the theory.

You're reporting an error for "CSME – Nov 2015 – L2 – Q3 – Ethics in Business"

CSME – Nov 2015 – L2 – Q2 – Risk Management and Corporate Strategy

Develops a risk management program for theft, diversion, and safety issues; includes risk reduction and financing techniques.

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CSME – Nov 2015 – L2 – Q1c – Corporate Governance

Discusses the difference between rules-based and principles-based professional ethics in accountancy.

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CSME – Nov 2015 – L2 – Q1b – Risk Management and Corporate Strategy

Discusses various methods for managing and controlling risks in an organization, illustrating different risk management techniques.

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CSME – Nov 2015 – L2 – Q1a – Risk Management and Corporate Strategy

Explains credit risk management concepts, including exposure, losses, residual risk, and appetite.

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PSAF – Nov 2015 – L2 – Q7 – Public Sector Reforms

Distinguish between basic infrastructure and development projects with examples and identify funding sources and characteristics.

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BL – Nov 2015 – L2 – SB – Q4c – Business Ethics and Corporate Governance

List three items that may constitute fraudulent false accounting under Nigerian laws.

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BL – Nov 2015 – L2 – SB – Q4b – The Nigerian Legal System

State three conditions for the admissibility of computer and electronically generated evidence in Nigerian courts.

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BL – Nov 2015 – L2 – SB – Q4a – Law of Tort

Define negligence in tort law and outline the elements a plaintiff must establish to succeed in an action for negligence.

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BL – Nov 2015 – L2 – SB – Q3b – Business Ethics and Corporate Governance

State the limitations on cash payments under the Money Laundering (Prohibition) Act 2004.

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BL – Nov 2015 – L2 – SB – Q3a – Law of Contract

Explain three types of fraud-related offences under the Criminal Code.

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BL – Nov 2015 – L2 – SB – Q2b – Company Law

Explain two ways shareholders can influence the composition of the board and decisions in a company.

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BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

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BL – Nov 2015 – L2 – SB – Q1c – Company Law

Describe two consequences of a company's winding-up on its shareholders.

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BL – Nov 2015 – L2 – SB – Q1b – Company Law

Describe four circumstances in which a director must vacate office in a company.

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BL – Nov 2015 – L1 – SA – Q20 – Law Relating to Banking

Identifying non-functions of the Central Bank of Nigeria.

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