CICPA Corporate Strategy & Risk Management - independent subject foundations flashcards

30 cards. Read the term and the definition here. The deck at the top of this page is optional.

Ansoff matrix

A framework classifying growth options by existing or new products and markets. It supports comparison of strategic changes, but the actual risk depends on capabilities, commitment and the particular situation.

Business strategy

The long-term plan of action a firm adopts to achieve its objectives and gain advantage over rivals, given its resources and environment. It involves choices about markets, products and methods of competing.

SWOT analysis

A review of a firm's internal strengths and weaknesses and external opportunities and threats. It informs strategy by matching capabilities to the environment, though it can become a static list if not updated.

PEST analysis

An examination of political, economic, social and technological influences on a business. It helps anticipate external change and shape strategy, but it is descriptive and does not by itself prescribe action.

Takeover

Acquiring control of another business by buying enough of its shares, often as a faster route to growth than internal expansion. It brings immediate capacity but risks overpaying and clashing cultures.

Merger

The joining of two businesses into a single organisation, usually presented as a partnership of equals. It can create synergies and market power, but integration problems often erode the expected benefits.

Span of control

The number of employees reporting directly to one manager. Its width can affect workload, communication and supervision, but does not alone determine every layer or the degree of delegation.

Hierarchical structure

An organisational design with several layers of management and a clear chain of command from senior to junior staff. It offers clear authority and promotion paths but can slow communication and raise costs.

Delayering

Removing one or more levels of management from an organisation's hierarchy to cut costs and shorten communication channels. It widens spans of control and may reduce promotion opportunities, affecting morale.

Delegation

Passing authority to a subordinate to carry out a task while the manager keeps overall accountability. It develops staff and frees managers' time but risks poor decisions if training and control are inadequate.

Recruitment

The process of identifying a vacancy and attracting suitable applicants, through internal promotion or external methods such as advertising and agencies. The chosen method affects cost, speed and the quality of candidates.

Job description

A document stating the duties, responsibilities and reporting relationships of a post. It is used to advertise a vacancy and to set expectations, and it supports later appraisal and training decisions.

Person specification

A profile of the qualifications, skills, experience and personal qualities required for a job. It helps shortlist applicants objectively and reduces bias, though poorly written criteria can exclude suitable candidates.

Selection

Choosing the best applicant for a vacancy using tools such as interviews, tests, references and assessment centres. Reliable selection reduces costly staff turnover but methods vary in validity and expense.

Induction training

Introductory training given to new employees covering the organisation, its rules, health and safety and their role. It helps newcomers settle quickly and reduces early resignation, but takes time away from work.

On-the-job training

Teaching skills while the employee performs real tasks at the workplace, often under supervision. It is relatively cheap and job-relevant but can pass on poor habits and disrupt normal output.

Economies of scale

Falls in long-run average cost as the scale of the enterprise expands, potentially through specialization, purchasing or technical advantages. This differs from merely spreading fixed cost by raising utilization of an unchanged plant.

Diseconomies of scale

Rises in average cost per unit as output grows beyond an optimal level, caused by communication problems, poor coordination and lower staff motivation. They limit the benefits of very large-scale operations.

Capacity utilisation

Actual output expressed as a percentage of maximum possible output. High utilisation spreads fixed costs but leaves little slack for unexpected orders; low utilisation wastes resources.

Inventory management

Controlling the amount of raw materials, work in progress and finished goods held. Too much stock ties up cash and risks obsolescence; too little risks stockouts and lost sales.

Just-in-time

A stock system in which materials arrive shortly before they are needed and finished goods are made to order, minimising stock held. It cuts storage costs but leaves little protection against supply disruption.

Assurance

A supported engagement conclusion about defined subject matter against suitable criteria, whose scope and level depend on the identified framework.

Audit criterion

The benchmark used to evaluate subject matter, which must be suitable for the engagement and not invented after seeing the result.

Professional skepticism

A questioning and evidence-responsive approach that considers possible error and contradiction without assuming that every person or record is dishonest.

Materiality

The significance of an omission or misstatement for the relevant users and context, involving nature as well as amount.

Assertion

A representation about a transaction, balance or disclosure that can be addressed through a specifically designed evidence procedure.

Completeness

The question whether all relevant items that should be included have been recorded or presented within the defined population and period.

Existence

The question whether a recorded asset, liability or other item exists as claimed, distinct from ownership, completeness or appropriate value.

Cut-off

The allocation of transactions to the appropriate reporting period under the applicable model, requiring attention to timing and recognition conditions.

Audit evidence

Information used to support an engagement conclusion, evaluated for relevance, reliability and adequacy in relation to its purpose.