Exam Sample on AC7020 MSc Professional Accounting

Question 1

1. First of all, the term conflict of interest must be understood. In many cases, the corporate houses get them in some clashes due to the mis-conduction of their ideas to others. Sometimes, one side of the clashing parties demand their method to be authentic and on the other hand, the other part of the clashing parties tag them as unreliable. This type of situation is known as the conflict of interest (Sah, 2019).

From the given question, the term can be understood. First of all, it is seen that Pamsy run the forecast which was reported to Sami. In this case, Sami did not give her opinion true values due to his idea of work and their preferences which is also an example of conflict of interest. Though after getting the proper data and result, he conducted the meeting where Banias, one of the executive directors advised the board not to hire new employees in Christmas. This statement was not accepted by a non-executive director, Badges where he claims that the store might need to hire temporary employees during the season to attract more customers.  These all are the cases of conflict of interest.

1. b) In this case, both approaches must be understood. The principle based approach for corporate governance is based on the interpretation. It states that a single bucket of rules and regulations are not necessary and suitable for every company employees. The guidelines, that are provided to the employees must be understood and obeyed by. The above case must be presented with a decision making of principle based corporate governance. On the other hand, the rule based approach is totally related to the regulations that are applied to all. In the company , it should be noted that all employees are not suitable to bear every regulation which can keep problem in the profit making and customer satisfying mechanism. From this discussion, the case of Vimbai departmental stores must be handled with the principle based corporate governance approach.

Question 2

The porters five force model for the DEWEY to enter the market of NDOUMBE can be discussed in the following manner.

1. Threat of remaining rivals- Though the country has three significant dollar shops that run the dollar chain market, they often face financial hardship to compete each other. From this view, the country is quite free from competitive rivalry as the large firms compete with each other and do not give more concentration on the dollar shops. The threat of competitive rivals are moderate.
2. Bargaining power of suppliers- there are large number of suppliers in case of the dollar houses or dollar stores. DEWEY itself is the biggest supplier of its commodities as it is a dollar store. DEWEY has a revenue of $120,000 million which can help it in effective supplier selection and management, supported by effective procurement systems. The bargaining power of suppliers is lower in this case.
3. Bargaining power of buyers- the bargaining power of the buyers in the country is not high because, the stores that provide the dollar commodities do not work properly with their financial management. In this case if DEWEY enters the market, it can grab the customers to it. The bargaining power of the customers are lower.
4. Threat of substitutes- The dollar store chains which can give them threat to the substitutes are in financial hardship themselves. In this case the threat of substitute is lower for DEWEY.
5. Threat of new entrants- The country NDOUMBE is not attractive in case of dollar shop due to its financial hardship i9n the store management. This is the main barrier of the new entrants which is opportunity for DEWEY to grab the market towards it. The threat to new entrants is higher.

From the above discussion, it can be stated that DEWEY can easily expand their dollar store chain to NDOUMBE for better market capturing.

Question 3

Reference List

Sah, S., 2019. Conflict of interest disclosure as a reminder of professional norms: Clients first!. Organizational Behavior and Human Decision Processes, 154, pp.62-79.

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