AAT L2 Work Effectively in Finance 3 — Questions and Answers
Question 1: Which of the following is an internal stakeholder of a business?
- HMRC
- A bank that has lent the business money
- An employee of the business (Correct answer)
- A customer
Correct answer: An employee of the business
Internal stakeholders are people within the organisation, such as employees, managers, and directors. External stakeholders include HMRC, banks, customers, suppliers, and shareholders (though shareholders can be considered internal in some classifications).
Question 2: The ethical principle of objectivity requires a finance professional to:
- Always support the views of their employer regardless of accuracy
- Not allow bias, conflict of interest, or undue influence to override professional judgement (Correct answer)
- Object to all management decisions
- Only present positive financial information
Correct answer: Not allow bias, conflict of interest, or undue influence to override professional judgement
Objectivity means a finance professional must exercise independent judgement without bias. They should not let personal relationships, financial interests, or pressure from others compromise the accuracy and fairness of their work.
Question 3: Which of the following documents would a new employee in a finance team be expected to read and understand?
- The company's marketing plan
- The company's policies on data protection, anti-money laundering, and health and safety (Correct answer)
- The minutes of every board meeting since the company was formed
- The personal tax returns of all directors
Correct answer: The company's policies on data protection, anti-money laundering, and health and safety
New finance employees should familiarise themselves with key policies including data protection (handling of personal data), anti-money laundering procedures (recognising and reporting suspicious activities), health and safety, and the organisation's code of conduct.
Question 4: Money laundering is best described as:
- A legitimate method of saving money
- The process of making money obtained from criminal activity appear legitimate (Correct answer)
- An accounting adjustment to correct errors
- A type of bank charge
Correct answer: The process of making money obtained from criminal activity appear legitimate
Money laundering is the criminal process of disguising the illegal origin of money obtained through criminal activities, making it appear to come from legitimate sources. All finance professionals have a legal duty to report suspected money laundering.
Question 5: If a finance professional suspects money laundering, they must:
- Ignore it as it is not their responsibility
- Report it to the Money Laundering Reporting Officer (MLRO) or the National Crime Agency (NCA) (Correct answer)
- Confront the person involved directly
- Post about it on social media
Correct answer: Report it to the Money Laundering Reporting Officer (MLRO) or the National Crime Agency (NCA)
Under the Proceeds of Crime Act 2002 and Money Laundering Regulations, finance professionals must report suspicions to their organisation's MLRO or directly to the NCA. Failing to report (or tipping off the suspect) is itself a criminal offence.
Question 6: The accounting profession's fundamental principles include all of the following EXCEPT:
- Integrity
- Professional competence and due care
- Maximisation of employer profits (Correct answer)
- Professional behaviour
Correct answer: Maximisation of employer profits
The five fundamental principles are: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Maximising employer profits is not an ethical principle — in fact, pursuing profit through unethical means would violate these principles.
AAT L2 Work Effectively in Finance 3
Which of the following is an internal stakeholder of a business?