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CPA Contemporary Business Issues - independent subject foundations study materials
CPA Contemporary Business Issues - independent subject foundations study resources

CPA Contemporary Business Issues - independent subject foundations practice questions

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Question 1Business models, digital value and organizational change

How does Contemporary Business Issues define 'automation' as a contemporary technology issue affecting the accounting profession?

  1. Securing organisational data against privacy breaches
  2. Enabling computers to make decisions reflecting human judgement
  3. Capturing large volumes of internet-generated data
  4. Replacing repetitive, rules-based human labour with computer labour Correct answer.

Explanation

Automation is the replacement of repetitive, rules-based human labour with computer labour. It directly affects transactional accounting tasks, freeing accountants to focus on strategic, advisory and judgement-based work.

Question 2Business models, digital value and organizational change

In Contemporary Business Issues, artificial intelligence (AI) is best characterised as technology that:

  1. Enables computers to make decisions that reflect human judgement Correct answer.
  2. Automatically captures large volumes of connected-device data
  3. Provides a tamper-resistant shared ledger of transactions
  4. Replaces full-time roles with contingent labour

Explanation

CPA Australia describes artificial intelligence as technology that enables computers to make decisions that reflect human judgement. This is distinct from automation, which simply executes predefined, rules-based tasks.

Question 3Business models, digital value and organizational change

An accountant uses a machine-learning model whose recommendations cannot be readily explained. Which contemporary technology risk does this most directly raise?

  1. The risk of data security breaches during storage
  2. The risk of insufficient big-data volume
  3. The risk that automation eliminates rules-based tasks
  4. The lack of transparency and explainability in automated decision making Correct answer.

Explanation

When an AI or machine-learning model's outputs cannot be readily explained, the key concern is the lack of transparency and explainability, sometimes called the 'black box' problem. Accountants must apply professional skepticism and consider accountability for decisions driven by such models.

Question 4Business models, digital value and organizational change

Module 1 explains that leadership in contemporary organisations:

  1. Occurs at all levels of the organisation, not just in formal management roles Correct answer.
  2. Is exercised only by those holding formal management positions
  3. Has been replaced by automation and AI
  4. Is relevant only to the human resources function

Explanation

Part D of Module 1 examines leadership skills and attributes, recognising that while management carries formal leadership responsibilities, leadership also occurs at all levels of the organisation. Accountants can demonstrate leadership regardless of their formal title.

Question 5Business models, digital value and organizational change

CPA Australia states that future accountants will have 'an expanded focus well beyond financial measures'. This expanded focus specifically includes:

  1. Only short-term shareholder returns
  2. Physical and social outcomes in addition to financial measures Correct answer.
  3. Tax minimisation as the primary objective
  4. Eliminating non-financial reporting entirely

Explanation

CPA Australia states that the accountants of today and tomorrow will act as business advisers, carry significant ethical responsibilities, and have an expanded focus well beyond financial measures to consider physical and social outcomes as well. This reflects the rise of sustainability and integrated reporting.

Question 6Business models, digital value and organizational change

An accountant transitioning to a strategic adviser role identifies that their team spends most of its time on manual data entry and reconciliations. Which technology response best frees capacity for advisory work?

  1. Removing all data-security controls to speed processing
  2. Increasing the volume of manual reconciliations
  3. Implementing robotic process automation for the rules-based tasks Correct answer.
  4. Discontinuing financial reporting altogether

Explanation

Robotic process automation (RPA) replaces repetitive, rules-based human labour with computer labour, freeing accountants to focus on higher-value strategic and advisory tasks. This directly supports the shift toward the strategic adviser role.

Question 7Business models, digital value and organizational change

CPA Australia identifies digital disruption as a driver of change. Which statement best captures 'digital disruption' in the accounting context?

  1. A temporary outage of accounting software
  2. A reduction in demand for any accounting services
  3. A regulatory ban on cloud computing
  4. Digital technologies transforming business models and displacing established ways of working Correct answer.

Explanation

Digital disruption refers to the way digital technologies such as AI, automation, big data and cloud computing transform business models and displace established ways of working. For accountants this reshapes the skills required and the value they provide.

Question 8Business models, digital value and organizational change

Which of the following is most clearly a 'data security and privacy' issue rather than an automation or AI issue?

  1. Protecting customer personal information from unauthorised access Correct answer.
  2. Designing a bot to process supplier invoices
  3. Training a model to detect fraud patterns
  4. Capturing sensor data from connected devices

Explanation

Protecting customer personal information from unauthorised access is a data security and privacy issue. CPA Australia lists data security and privacy as a distinct contemporary technology concern alongside big data, automation and AI.

Question 9Business models, digital value and organizational change

Why does CPA Australia emphasise lifelong learning for accountants facing technological change?

  1. Because professional bodies require no continuing education
  2. Because the skills, attitudes and values required of accountants continually evolve with technology and business change Correct answer.
  3. Because financial reporting standards never change
  4. Because automation makes all upskilling unnecessary

Explanation

The subject values lifelong learning to continually develop and improve technical, business, behavioural and leadership skills. As technology and business issues reshape the profession, accountants must keep updating the skills, attitudes and values required of them.

Question 10Business models, digital value and organizational change

A blockchain is best described to a CBI candidate as:

  1. A centralised database controlled by one administrator
  2. A machine-learning algorithm for prediction
  3. A distributed, tamper-resistant ledger shared across a network of participants Correct answer.
  4. A type of contingent workforce arrangement

Explanation

Blockchain is a distributed ledger technology in which transaction records are shared across a network and made tamper-resistant through cryptographic linking. Its relevance to accounting includes the potential for more transparent and verifiable record keeping.

Question 11Business models, digital value and organizational change

According to Module 2, a 'business model' is best understood as:

  1. The legal structure under which a company is incorporated
  2. A government tax-incentive scheme
  3. A statutory financial statement template
  4. The rationale of how an organisation creates, delivers and captures value Correct answer.

Explanation

A business model describes how an organisation creates, delivers and captures value. Module 2 examines the concept of a business model and then explores innovations based on new business systems, products and services, and customer experiences.

Question 12Business models, digital value and organizational change

How does Contemporary Business Issues describe 'social entrepreneurship'?

  1. A marketing strategy to increase shareholder dividends
  2. A government welfare programme
  3. The process of developing new businesses intended specifically to meet social needs rather than primarily generating profit Correct answer.
  4. The outsourcing of corporate social responsibility to charities

Explanation

Part D of Module 2 defines social entrepreneurship as the process of developing new businesses intended specifically to meet social needs rather than focusing primarily on generating profits. Methods to measure the outcomes of social ventures can inform broader reporting by traditional businesses.

Question 13Business models, digital value and organizational change

A start-up raises small amounts of capital from a large number of individuals through an online platform in exchange for early product access. This financing approach is best classified as:

  1. Reward-based crowd-source funding Correct answer.
  2. Marketplace lending
  3. A traditional syndicated bank loan
  4. A government innovation grant

Explanation

Raising small amounts from many individuals via an online platform, with non-financial rewards such as early product access, is reward-based crowd-source funding. CPA Australia highlights crowd-source funding as an innovative entrepreneurial financing approach.

Question 14Business models, digital value and organizational change

Module 2 notes that methods developed to measure the outcomes of social ventures 'may be useful to inform the wider scope of reporting' by traditional businesses. This statement most directly supports the rise of:

  1. Cash-only accounting
  2. Broader non-financial and impact reporting Correct answer.
  3. Reducing disclosure to financial statements alone
  4. Abolishing external audit

Explanation

Social ventures pioneered ways to measure social outcomes, and CPA Australia notes these methods can inform a wider scope of reporting by traditional businesses. This connects to the growth of broader non-financial, sustainability and impact reporting.

Question 15Business models, digital value and organizational change

Which of the following is the clearest example of business-model innovation based on 'customer experience' as discussed in Module 2?

  1. A company changing its statutory auditor
  2. A factory replacing one supplier with another at lower cost
  3. A retailer redesigning its end-to-end app journey to make purchasing seamless and personalised Correct answer.
  4. A firm relocating its head office to reduce rent

Explanation

Module 2 examines innovations based on new business systems, products and services, and customer experiences. Redesigning an end-to-end customer journey to make purchasing seamless and personalised is a clear customer-experience innovation.

Question 16Business models, digital value and organizational change

A platform business charges a commission each time it matches a rider with a driver, owning no vehicles itself. This is characteristic of which Module 2 concept?

  1. Microfinance
  2. Crowd-source funding
  3. Social entrepreneurship
  4. The sharing economy and digital-platform business models Correct answer.

Explanation

A commission-charging platform that matches buyers and sellers (riders and drivers) without owning the underlying assets is a hallmark of the sharing economy and digital-platform business models, which have substantially disrupted long-established industries.

Question 17Business models, digital value and organizational change

Globalisation increases competition and the spread of new business models. For accountants, a key implication highlighted in CBI is the need to:

  1. Understand diverse markets, cross-border operations and globally distributed value chains Correct answer.
  2. Ignore international developments and focus only on domestic rules
  3. Avoid adopting any emerging technology
  4. Restrict advisory work to a single industry

Explanation

Globalisation drives competition, cross-border operations and globally distributed workforces and value chains. Accountants acting as strategic advisers must understand these diverse markets and international developments to add value in a connected business environment.

Question 18Business models, digital value and organizational change

An accountant acting as a strategic adviser is asked to evaluate a proposed AI-driven credit-scoring tool. Applying CBI's ethical themes, the accountant should especially consider:

  1. Only the cost savings from automation
  2. How to avoid all human oversight
  3. Whether the tool increases data volume
  4. Fairness, bias, transparency and accountability of the AI's decisions Correct answer.

Explanation

CBI emphasises ethics, professional skepticism and the responsible use of emerging technologies. Evaluating an AI credit-scoring tool should especially consider fairness, potential bias, transparency and accountability of its decisions, not just cost savings.

Question 19Business models, digital value and organizational change

Which of the following best demonstrates an accountant adding value as a 'business adviser' rather than a record keeper, as envisaged in CBI?

  1. Advising the board on the financial and strategic implications of adopting a new sustainable business model Correct answer.
  2. Posting routine journal entries
  3. Filing the prior-year tax return
  4. Reconciling a bank statement

Explanation

CBI envisages accountants adding value as business advisers with a focus beyond financial measures. Advising the board on the financial and strategic implications of adopting a sustainable business model is a clear advisory, value-adding activity, unlike routine record keeping.

Question 20Business models, digital value and organizational change

An accountant notices that data feeding an automated sustainability report appears incomplete and potentially overstated. Applying professional skepticism, the appropriate action is to:

  1. Investigate, corroborate the data and challenge the figures before the report is relied upon Correct answer.
  2. Accept the figures because the system generated them
  3. Delete the report without comment
  4. Publish the figures and add a disclaimer instead of checking

Explanation

Professional skepticism requires a questioning mind and critical assessment of evidence. Where automated data appears incomplete or overstated, the accountant should investigate, corroborate the data and challenge the figures before they are relied upon, helping prevent greenwashing or misstatement.

Question 21Business models, digital value and organizational change

Module 1 emphasises a 'future-focused perspective' that responds positively to change. For an accountant, responding positively to digital disruption most appropriately means:

  1. Resisting new technologies to protect existing tasks
  2. Waiting for competitors to act first in all cases
  3. Adapting, upskilling and using new technologies to add greater strategic value Correct answer.
  4. Delegating all judgement to automated systems

Explanation

Module 1 promotes a future-focused perspective that responds positively to change and values lifelong learning. Responding positively to digital disruption means adapting, upskilling and using new technologies to add greater strategic value, rather than resisting change.

Question 22Human resource management

Module 3 introduces human resource management (HRM). According to CPA Australia, HRM is best understood as a function that:

  1. Operates only within the HR department
  2. Manages people throughout the organisation to effectively contribute to strategic goals Correct answer.
  3. Is concerned solely with payroll processing
  4. Replaces line managers' responsibility for their teams

Explanation

Module 3 frames HRM as a function intended to manage people across the organisation so they effectively contribute to the organisation's strategic goals. CPA Australia stresses that HRM occurs throughout the organisation, not just from the HR department.

Question 23Human resource management

Module 3 emphasises the importance of 'human capital' to the organisation. Human capital refers to:

  1. The cash reserves available for hiring
  2. Physical assets such as machinery and buildings
  3. The skills, knowledge and capabilities embodied in an organisation's people Correct answer.
  4. The amount of debt funding employee programmes

Explanation

Human capital refers to the skills, knowledge, experience and capabilities embodied in an organisation's people. Module 3 explores the importance of human capital and treats people as one of the fundamental resources of the business.

Question 24Human resource management

Module 3 Part B focuses on workforce trends, including increasing diversity. CPA Australia notes that workforce diversity:

  1. Is relevant only to multinational corporations
  2. Should be minimised to keep teams homogeneous
  3. Has no measurable effect on organisational performance
  4. Brings advantages but can present challenges when not managed effectively Correct answer.

Explanation

Module 3 examines a number of workforce trends including increasing diversity, noting the advantages this can bring and the challenges it may present when not managed effectively. Effective diversity management is therefore a contemporary HRM priority.

Question 25Human resource management

Module 3 Part C describes a 'new era of employee engagement'. Which development is part of this new era?

  1. Flexible and hybrid working arrangements following pandemic disruption Correct answer.
  2. A mandated return to fully office-based, fixed-hour work
  3. The elimination of all remote work
  4. A reduction in the contingent workforce

Explanation

CPA Australia describes a new era of employee engagement that includes flexible and hybrid working arrangements resulting from pandemic lockdowns and their disruption to traditional workplaces. Employees may now work from home or remotely some or all of the time.

Question 26Human resource management

Module 3 highlights the rise of the 'contingent workforce'. This refers to people who:

  1. Hold permanent full-time positions
  2. Work on a temporary, short-term or contract basis rather than conventional full- or part-time employment Correct answer.
  3. Are unpaid volunteers
  4. Work exclusively in the HR department

Explanation

The contingent workforce comprises those who work on a temporary, short-term or contract basis rather than in conventional full-time or part-time employment. CPA Australia identifies its increase as a major change in the workforce in recent decades.

Question 27Human resource management

Module 3 states that the workforce is 'increasingly distributed across different sites, often across national borders'. A key HRM challenge this creates is:

  1. Reduced need for any communication tools
  2. Eliminating the need for knowledge sharing
  3. Coordinating, engaging and managing geographically dispersed teams across time zones and cultures Correct answer.
  4. Removing all flexible working options

Explanation

A geographically distributed workforce, often spanning national borders, creates the challenge of coordinating, engaging and managing dispersed teams across time zones and cultures. Technology and cloud-based computing enable this distribution but raise new management demands.

Question 28Human resource management

Module 3 Part D addresses 'knowledge sharing'. Why has knowledge sharing become a higher strategic priority in recent years?

  1. Because regulators now prohibit retaining knowledge
  2. Because corporate knowledge has become irrelevant
  3. Because automation has removed the need for human knowledge
  4. Because knowledge plays an increasingly central role in obtaining competitive advantage Correct answer.

Explanation

Knowledge sharing has long ensured corporate knowledge is not lost, but Module 3 notes it has become a higher strategic priority due to changes in work and the workforce and the increasingly central role knowledge plays in obtaining competitive advantage.

Question 29Human resource management

Module 3 Part E examines the role of the accountant in people management. The subject suggests accountants contribute to people management:

  1. Both directly and in supporting others and the organisation generally Correct answer.
  2. Only when they hold the title of HR manager
  3. Exclusively through processing payroll
  4. By avoiding any involvement in people matters

Explanation

Part E looks specifically at the role of the accountant in people management, both directly and in supporting others and the organisation generally. This reflects the view that HRM occurs throughout the organisation, including through accountants.

Question 30Human resource management

A firm wants to retain critical expertise as several senior employees approach retirement. Which Module 3 practice most directly addresses this risk?

  1. Increasing the use of contingent labour
  2. Establishing knowledge-sharing processes to capture and transfer corporate knowledge Correct answer.
  3. Reducing workforce diversity
  4. Eliminating flexible working

Explanation

Knowledge sharing ensures corporate knowledge is not lost. Capturing and transferring the expertise of retiring employees through knowledge-sharing processes directly mitigates the risk of losing critical organisational knowledge.

Question 31Human resource management

An organisation adopts strategic HRM. Which action best reflects a strategic (rather than purely administrative) HRM approach?

  1. Processing leave requests on time
  2. Filing employment contracts accurately
  3. Aligning workforce capability planning with the organisation's strategic goals Correct answer.
  4. Scheduling annual fire drills

Explanation

Strategic HRM aligns the management of people with the organisation's strategic goals. Workforce capability planning that ensures the right skills are available to achieve strategy reflects this strategic orientation, as opposed to routine administrative tasks.

Question 32Human resource management

CPA Australia notes that technology has 'enabled many human tasks to be replaced with computers through automation technologies and cloud-based computing'. For HRM, a balanced response to this is to:

  1. Ignore reskilling because jobs will not change
  2. Replace the entire workforce immediately
  3. Cease all cloud adoption
  4. Reskill and redeploy affected employees toward higher-value work Correct answer.

Explanation

As automation and cloud computing replace some human tasks, a balanced HRM response is to reskill and redeploy affected employees toward higher-value work. This supports both organisational capability and the future-of-work themes in the subject.

Question 33Human resource management

Treating people as 'one of the fundamental resources of the business' implies that effective HRM should be:

  1. Strategic, recognising people as a source of value and competitive advantage Correct answer.
  2. Reactive and purely cost-focused
  3. Outsourced entirely to remove accountability
  4. Limited to legal compliance only

Explanation

Module 3 treats people as one of the fundamental resources of the business and explains how a business can approach HRM strategically. This implies HRM should be strategic, recognising people as a source of value and competitive advantage rather than just a cost.

Question 34Human resource management

Which scenario best illustrates the 'new era of work' described in Module 3?

  1. All staff must be physically present in one office every day
  2. A team works partly from home, partly in the office, with several members on short-term contracts across different countries Correct answer.
  3. The company refuses to use any cloud-based tools
  4. Employees are prohibited from working remotely

Explanation

The new era of work features flexible and hybrid arrangements, an increasing contingent workforce, and geographically distributed teams enabled by technology. A team blending home and office work, short-term contracts, and cross-border members captures all of these features.

Question 35Human resource management

Why might a poorly managed increase in workforce diversity become a challenge rather than an advantage?

  1. Because diverse perspectives always reduce performance
  2. Because diversity is illegal in most jurisdictions
  3. Because without inclusive management, communication, conflict and engagement issues can undermine the potential benefits Correct answer.
  4. Because diverse teams cannot use technology

Explanation

Module 3 notes diversity brings advantages but can present challenges when not managed effectively. Without inclusive management, issues such as communication barriers, conflict and disengagement can undermine the performance benefits that diversity can otherwise deliver.

Question 36Human resource management

An accountant supports the organisation's people strategy by analysing the cost and productivity impact of a new hybrid working policy. This reflects which Module 3 idea?

  1. That accountants should avoid HR matters
  2. That HRM is irrelevant to financial professionals
  3. That payroll is the only HR role for accountants
  4. That accountants contribute to people management indirectly by supporting others and the organisation Correct answer.

Explanation

Part E recognises that accountants contribute to people management both directly and by supporting others and the organisation generally. Analysing the cost and productivity impact of a hybrid policy is an example of an accountant supporting the people strategy.

Question 37Human resource management

Knowledge that is difficult to document and is held in employees' experience and intuition is best described as:

  1. Tacit knowledge Correct answer.
  2. Explicit knowledge
  3. Public knowledge
  4. Financial capital

Explanation

Tacit knowledge is personal, experience-based and difficult to articulate or document, residing in employees' intuition and skill. Capturing and sharing tacit knowledge is a central challenge in the knowledge-sharing discussion of Module 3.

Question 38Human resource management

An organisation increasingly relies on gig and freelance workers sourced through digital platforms. From an HRM perspective in Module 3, a key consideration is:

  1. Treating them identically to permanent staff for all engagement purposes is always sufficient
  2. Adapting engagement, knowledge-sharing and management practices to a contingent, distributed workforce Correct answer.
  3. Refusing to use any platform-based labour
  4. Ignoring knowledge transfer because contractors are temporary

Explanation

Growth in the contingent and platform-sourced workforce requires HRM to adapt engagement, knowledge-sharing and management practices for workers who are temporary and often distributed. Ignoring these workers' integration risks lost knowledge and weak engagement.

Question 39Human resource management

Which statement best reflects CPA Australia's view that HRM 'occurs throughout the organisation, not just emanates from the HR department'?

  1. Only HR specialists are responsible for managing and developing people
  2. People management should be fully automated
  3. Line managers and professionals such as accountants also play important roles in managing and developing people Correct answer.
  4. HRM should be removed from operational areas

Explanation

CPA Australia stresses that HRM occurs throughout the organisation, not just from the HR department. Line managers and professionals, including accountants, play important roles in managing, motivating and developing people in their areas.

Question 40Human resource management

A company measures employee engagement and links it to retention and productivity. This practice supports which contemporary HRM objective?

  1. Reducing the workforce to the smallest possible size
  2. Avoiding any use of workforce data
  3. Eliminating the contingent workforce
  4. Improving how effectively people contribute to the organisation's performance Correct answer.

Explanation

Module 3 examines approaches to effectively managing people to contribute to organisational performance. Measuring engagement and linking it to retention and productivity helps improve how effectively people contribute, a core contemporary HRM objective.

Question 41Human resource management

In the context of Module 3, 'employee engagement' most directly refers to:

  1. The level of commitment, motivation and connection employees have to their work and organisation Correct answer.
  2. The legal contract signed at hiring
  3. The number of hours worked per week
  4. The size of the payroll budget

Explanation

Employee engagement refers to the level of commitment, motivation and emotional connection employees have to their work and organisation. The new era of engagement, including flexible and hybrid work, shapes how organisations build and sustain it.

Question 42Human resource management

An organisation builds a searchable internal repository where staff document procedures, lessons learned and best practices. This primarily converts:

  1. Explicit knowledge into financial capital
  2. Tacit knowledge into explicit, shareable knowledge Correct answer.
  3. Physical assets into human capital
  4. Contingent workers into permanent staff

Explanation

Documenting procedures, lessons learned and best practices captures personal, experience-based (tacit) knowledge and codifies it into explicit, shareable form. This supports the knowledge-sharing goal of preserving corporate knowledge and competitive advantage.

Question 43Human resource management

Which of the following is the strongest argument that managing people strategically can create competitive advantage?

  1. People are easily replicated by competitors
  2. Human capital is recorded as a liability on the balance sheet
  3. Skilled, engaged and knowledgeable people are difficult for competitors to imitate Correct answer.
  4. Workforce capabilities are irrelevant to strategy

Explanation

Skilled, engaged and knowledgeable people, and the tacit knowledge they hold, are difficult for competitors to imitate, making human capital a potential source of sustainable competitive advantage. This underpins the strategic view of HRM in Module 3.

Question 44Human resource management

A manager designs roles so that automated tools handle routine processing while staff focus on analysis and client advice. From a future-of-work HRM view, this is an example of:

  1. Eliminating human roles entirely
  2. Removing the contingent workforce
  3. Reducing the need for any HRM
  4. Job redesign that shifts human effort toward higher-value, judgement-based tasks Correct answer.

Explanation

Allocating routine processing to automation while staff focus on analysis and advice is job redesign that shifts human effort toward higher-value, judgement-based work. This response aligns with the future-of-work and reskilling themes of Module 3.

Question 45Human resource management

Which workforce change does CPA Australia attribute most directly to pandemic lockdowns and their disruption to traditional workplaces?

  1. The growth of flexible and hybrid working arrangements Correct answer.
  2. The decline of cloud-based computing
  3. A reduction in workforce diversity
  4. The end of the contingent workforce

Explanation

CPA Australia attributes the growth of flexible and hybrid working arrangements to pandemic lockdowns and their disruption to traditional workplaces. Employees may now work from home or remotely some or all of the time as part of the new era of engagement.

Question 46Human resource management

An organisation finds that remote and hybrid working has weakened informal knowledge transfer between colleagues. A suitable HRM response is to:

  1. Ban remote work permanently
  2. Introduce structured knowledge-sharing channels and collaboration tools to replace lost informal exchange Correct answer.
  3. Stop measuring engagement
  4. Increase manual data entry

Explanation

When hybrid working reduces spontaneous, informal knowledge exchange, introducing structured knowledge-sharing channels and collaboration tools helps preserve corporate knowledge. This connects the future-of-work and knowledge-sharing themes of Module 3.

Question 47Natural resources, sustainability and business evidence

Module 4 opens by raising a central question about resource use. This question concerns whether:

  1. All resources should be nationalised
  2. Accounting standards should be abolished
  3. Current use of resources is sustainable, so future generations can meet their needs Correct answer.
  4. Renewable resources should be banned

Explanation

Module 4 begins by examining systems critical to humans meeting their needs and raises whether current resource use is sustainable, that is, whether future generations will be able to meet their needs. This reflects the intergenerational definition of sustainability.

Question 48Natural resources, sustainability and business evidence

Module 4 notes that many fundamental aspects of humans' quality of life currently rely on the use of:

  1. Only renewable resources
  2. Imported resources only
  3. Recycled materials exclusively
  4. Non-renewable resources Correct answer.

Explanation

Module 4 explains that, at present, many of the fundamental aspects of humans' quality of life rely on the use of non-renewable resources. Growing appreciation of the need to use resources sustainably, along with rising costs and changing preferences, is driving change in how resources are used.

Question 49Natural resources, sustainability and business evidence

Module 4 Part B discusses the increasing regulation of carbon dioxide emissions. Carbon taxes and emissions trading schemes work primarily by:

  1. Subsidising fossil fuel use
  2. Increasing the cost of business processes that result in carbon emissions, creating incentives to reduce them Correct answer.
  3. Banning all industrial activity
  4. Eliminating the need for alternative energy

Explanation

Carbon taxes and emissions trading schemes increase the cost of business processes that result in carbon emissions, thus driving incentives to reduce emissions and find alternative processes and energy sources. They put a price on carbon to internalise its environmental cost.

Question 50Natural resources, sustainability and business evidence

Why does Module 4 link the burning of fossil fuels to the regulation of carbon emissions?

  1. Because fossil fuels are renewable
  2. Because fossil fuels reduce business costs
  3. Because human activities, particularly burning fossil fuels, are seen as creating accelerated climate change Correct answer.
  4. Because emissions have no measurable impact

Explanation

Module 4 explains that increasing regulation of carbon dioxide emissions responds to the concern that human activities, particularly the burning of fossil fuels, are creating accelerated climate change. This drives carbon taxes and emissions trading schemes.