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GNDU Question Paper-2024
B.Com 5
th
Semester
GROUP-I: ACCOUNTING AND FINANCE
CONTEMPORARY ACCOUNTING
Time Allowed: Three Hours Max. Marks: 50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. Write down the influence of other disciplines on accounting in detail.
2. What is the use of Human Resource Accounting in Managerial Decisions?
SECTION-B
3. What is Price Level Accounting? Explain its utility and corporate practices.
4. Write a brief note on Corporate Reporting and explain its conceptual framework.
SECTION-C
5. Write a brief note on Value Added Reporting in detail.
6. Explain the concept of Basel Norm III in detail.
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SECTION-D
7. Write down the significance and formulation of Accounting Standards in detail.
GNDU Answer Paper-2024
B.Com 5
th
Semester
GROUP-I: ACCOUNTING AND FINANCE
CONTEMPORARY ACCOUNTING
Time Allowed: Three Hours Max. Marks: 50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. Write down the influence of other disciplines on accounting in detail.
Ans: Imagine accounting as a young student sitting in a classroom, trying to understand the
world of numbers, transactions, and financial statements. Initially, it was like learning to
read and write—basic, straightforward, and mostly focused on keeping records. But as the
world grew more complex, this student realized that to truly excel, it couldn’t live in
isolation. Accounting needed help from other “subjects” in the school of knowledge. And
just like a curious student learning from friends, accounting borrowed ideas, techniques,
and perspectives from various disciplines. Let’s take a journey to see how these disciplines
have shaped accounting into the sophisticated field it is today.
1. Influence of Economics
Let’s start with economics—the wise elder in our story. Economics deals with scarcity,
choices, and the allocation of resources. Accounting couldn’t ignore these concepts because
businesses constantly face decisions about limited resources.
For instance, accounting uses economic principles to measure cost, profit, and value. The
concepts of demand and supply help accountants understand pricing and inventory
valuation. Economic theories, like the time value of money, have led to the development of
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present and future value calculations, which are crucial for investment decisions, loans, and
long-term financial planning. Without economics, accounting would merely record numbers
without understanding the financial implications of business decisions.
In simple words, economics taught accounting why numbers matter, not just how to record
them.
2. Influence of Law
Next comes law—the strict disciplinarian who ensures that everyone follows rules.
Businesses operate within legal frameworks, and accounting must align with these
regulations. Legal principles have influenced accounting in several ways:
• Regulatory Compliance: Accounting standards often reflect legal requirements. For
example, taxation rules guide how income and expenses are reported.
• Corporate Governance: Laws around company formation, shareholder rights, and
contracts influence how financial statements are prepared and presented.
• Fraud Prevention: Legal frameworks guide audits and internal controls, ensuring
honesty and transparency in financial reporting.
Without law, accounting would be like a game without rules—numbers could be
manipulated, and financial statements would lose credibility. Law gives accounting its
backbone, making sure it serves society and businesses ethically and legally.
3. Influence of Mathematics
Mathematics is like the friendly mathematician who makes sure accounting speaks the
language of logic and precision. Numbers are at the heart of accounting, but mathematics
provides the tools to analyze and interpret them accurately.
• Arithmetic and Algebra: Basic calculations, ledger balancing, and cost allocation rely
heavily on these.
• Statistics: Helps accountants understand trends, forecast sales, and analyze risks. For
instance, variance analysis in budgeting uses statistical tools to compare expected
and actual results.
• Financial Mathematics: Concepts like compound interest, annuities, depreciation,
and amortization are rooted in mathematics.
Without mathematics, accounting would be chaotic—a pile of numbers with no order, no
insight, and no ability to plan for the future. Math helps accountants turn raw data into
meaningful information.
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4. Influence of Sociology and Psychology
Now, let’s meet sociology and psychology—the social scientists who remind accounting that
businesses are run by humans, not just machines.
• Sociology: Helps accountants understand organizational behavior, work culture, and
social responsibility. For example, social norms and expectations can influence how
companies report environmental costs or community initiatives. Accounting also
adapts to different societal contexts; the same business practice may be acceptable
in one country and frowned upon in another.
• Psychology: Introduces insights into human behavior and decision-making.
Behavioral accounting considers how managers, employees, and investors react to
financial information. For example, presenting financial data in a certain way can
influence managerial decisions or investor confidence. Understanding biases,
motivation, and perception helps accountants provide better, more actionable
reports.
These disciplines remind accounting that numbers reflect people, their decisions, and their
values.
5. Influence of Information Technology (IT)
In today’s world, IT is like the magical wizard who transformed accounting from a laborious,
paper-heavy task into a swift, efficient, and insightful discipline.
• Automation: Software like Tally, SAP, and QuickBooks reduce manual bookkeeping
errors and speed up processes.
• Data Analysis: IT tools help accountants analyze massive datasets, detect anomalies,
and generate reports instantly.
• Communication: Cloud-based systems allow real-time collaboration between
accountants, management, and auditors across the globe.
Without IT, accounting would still be scribbling in ledgers and manually calculating totals—
slow, error-prone, and unable to cope with modern business complexity.
6. Influence of Finance
Finance is the strategist in this story, focusing on the management of money and
investments. Accounting and finance are closely linked:
• Budgeting and Planning: Financial management relies on accounting data for making
forecasts, evaluating projects, and controlling costs.
• Investment Analysis: Accounting provides the historical data that finance
professionals use to assess risks and returns.
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• Performance Measurement: Ratios, profitability analysis, and liquidity assessment
help managers make strategic decisions.
In essence, finance gives accounting a purpose: turning numbers into meaningful insights
for decision-making.
7. Influence of Management
Management is like the coach guiding a team. Accounting provides the players (data), but
management decides the game plan.
• Decision-making: Accounting reports inform managerial decisions about production,
sales, pricing, and expansion.
• Control: Cost accounting, budgetary control, and performance evaluation systems
are borrowed from management principles.
• Strategy: Management accounting combines accounting techniques with strategic
thinking, helping organizations achieve long-term goals.
Without management, accounting would be a passive observer. Management makes
accounting actionable.
8. Influence of Ethics
Ethics is the moral compass in our story. While numbers can be manipulated, ethical
principles ensure honesty, transparency, and integrity.
• Professional Conduct: Accounting standards include ethical guidelines for reporting
and auditing.
• Corporate Responsibility: Ethical accounting helps businesses maintain trust with
investors, customers, and society.
• Fraud Prevention: Ethics guides whistleblowing, internal controls, and compliance
measures.
Ethics ensures that accounting doesn’t just tell the story of business but tells it truthfully.
Conclusion: Accounting as a Symphony of Disciplines
If we visualize accounting today, it’s not just a solitary student—it’s a symphony, where
each discipline contributes a unique note. Economics teaches it the “why,” law provides the
“rules,” mathematics gives it the “precision,” sociology and psychology add the “human
element,” IT brings “speed and efficiency,” finance offers “purpose,” management provides
“direction,” and ethics ensures “trust and integrity.”
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By learning from these diverse disciplines, accounting has evolved from simple bookkeeping
into a dynamic, multi-faceted field that not only records financial data but also analyzes,
interprets, and communicates it to guide decisions, shape policies, and support sustainable
growth.
So, next time you see a financial report, remember: behind those crisp numbers lies the
wisdom of economics, the discipline of law, the rigor of mathematics, the insight of social
sciences, the magic of IT, the strategy of finance, the guidance of management, and the
conscience of ethics. Accounting isn’t just numbers—it’s the story of business, told by many
teachers at once.
2. What is the use of Human Resource Accounting in Managerial Decisions?
Ans: The Story of Human Resource Accounting in Managerial Decisions
In the heart of a bustling city stood two companies. Both had tall glass buildings, modern
machines, and impressive balance sheets. Yet, one company thrived year after year, while
the other struggled despite having the same physical resources.
What was the difference?
The thriving company valued its people—not just as employees, but as assets. It measured
their skills, knowledge, creativity, and loyalty, and treated them as part of its wealth. The
struggling company, on the other hand, only counted machines, buildings, and money in its
accounts, ignoring the most important resource: its human beings.
This is where the concept of Human Resource Accounting (HRA) comes in. It is the science
and art of measuring the value of human resources and using that information for
managerial decisions.
What is Human Resource Accounting?
In simple words: Human Resource Accounting is the process of identifying, measuring, and
reporting the value of human resources in an organization.
Just as we account for machines, land, and money, HRA tries to account for employees—
their skills, training, experience, and potential.
It answers questions like:
• How much has the company invested in training employees?
• What is the value of employee knowledge and loyalty?
• How do employees contribute to profits?
Why is HRA Needed?
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Traditional accounting treats salaries and training costs as expenses, not investments. But in
reality, employees are assets that appreciate with training and experience.
Without HRA, managers may:
• Underestimate the importance of training.
• Fail to see the cost of employee turnover.
• Ignore the long-term value of skilled staff.
With HRA, managers can make better, evidence-based decisions.
Uses of Human Resource Accounting in Managerial Decisions
Now let’s explore how HRA helps managers in different areas. I’ll explain each use with a
story-like example so it feels natural and memorable.
1. Recruitment and Selection Decisions
Managers often face a dilemma: Should they hire fresh graduates at lower salaries or
experienced professionals at higher salaries?
• With HRA: Managers can compare the long-term value of each option. For example,
experienced professionals may bring higher productivity and reduce training costs,
making them more valuable despite higher salaries.
• Without HRA: Decisions may be based only on immediate costs, ignoring long-term
benefits.
Thus, HRA helps managers choose the right people by evaluating their potential as
assets.
2. Training and Development Decisions
Training is often seen as an expense. But HRA shows it as an investment.
• Example: A company spends ₹10 lakh on training its sales team. HRA measures the
increase in sales performance and shows that the training added ₹50 lakh in value.
• Managers can then justify training budgets and design better programs.
HRA helps managers decide how much to invest in training and where.
3. Performance Evaluation and Promotion
Managers need to decide who deserves promotion or higher responsibilities.
• With HRA: They can measure not just output, but also the value an employee adds
through leadership, innovation, and teamwork.
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• Example: Two employees generate the same sales, but one also trains juniors and
improves team morale. HRA highlights his greater value, guiding promotion
decisions.
HRA ensures fair and strategic promotions.
4. Retention and Turnover Decisions
Employee turnover is costly. Replacing skilled staff involves recruitment, training, and lost
productivity.
• HRA quantifies this cost.
• Example: If losing a software engineer costs ₹15 lakh in replacement and lost
projects, managers realize the importance of retention strategies like better pay or
career growth.
HRA helps managers decide how much to invest in retaining employees.
5. Compensation and Reward Decisions
How much should employees be paid? Should bonuses be given?
• With HRA: Compensation is linked to the value employees create.
• Example: If a marketing manager’s strategies add ₹1 crore in brand value, HRA
justifies higher rewards.
• This motivates employees and aligns pay with performance.
HRA helps managers design fair and motivating compensation systems.
6. Strategic Planning and Expansion
When planning new projects or expansions, managers must know if they have the right
human resources.
• Example: A company wants to expand into AI-based products. HRA shows whether
current employees have the skills or whether new hiring/training is needed.
• This prevents failure due to lack of talent.
HRA helps managers align human resources with long-term strategy.
7. Mergers and Acquisitions
In mergers, companies often focus on physical assets and market share. But the real success
depends on people.
• Example: When a tech company acquires a startup, the real value lies in the startup’s
engineers and innovators.
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• HRA helps managers evaluate this human capital and make better acquisition
decisions.
HRA ensures people are valued in mergers, not just machines.
8. Measuring Organizational Health
Just as doctors check blood pressure and heartbeat, managers need indicators of
organizational health.
• HRA provides measures like employee satisfaction, skill levels, and loyalty.
• These indicators help managers detect problems early—like high turnover risk or skill
gaps.
HRA acts as a health check-up for the organization.
Diagram: HRA in Managerial Decisions
Here’s a simple diagram to visualize how HRA supports decisions:
This shows how HRA flows into every major managerial decision.
Advantages of Using HRA in Decisions
• Better resource allocation: Managers know where to invest in people.
• Improved motivation: Employees feel valued when treated as assets.
• Long-term planning: Helps align human resources with strategy.
• Transparency: Shows shareholders the value of human capital.
• Reduced turnover: By highlighting the cost of losing employees.
Limitations of HRA
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But like every tool, HRA has challenges:
• Valuation difficulties: Human skills and loyalty are hard to measure in money.
• Lack of standard methods: Different companies use different models.
• Resistance: Some managers see it as extra work.
• Uncertainty: Human behavior is unpredictable.
Despite these, the benefits outweigh the limitations, especially for long-term decisions.
The Narrative Angle
Think of a company as a garden. Machines and buildings are like soil and water, but
employees are the plants. Without valuing and nurturing them, the garden cannot flourish.
Human Resource Accounting is the gardener’s notebook—it records how much fertilizer
(training) was added, how much each plant has grown (performance), and which plants
need more care (retention).
Managers use this notebook to decide:
• Which plants to grow more of (recruitment).
• Which need pruning or support (performance evaluation).
• How much water and sunlight to give (compensation and training).
Without this notebook, the garden may wither despite having rich soil.
Conclusion
The use of Human Resource Accounting in managerial decisions is like giving managers a
new lens—one that sees beyond machines and money, into the true wealth of the
organization: its people.
• It guides recruitment, training, promotion, retention, compensation, and strategic
planning.
• It helps managers treat employees as assets, not expenses.
• It builds stronger, healthier, and more competitive organizations.
In the end, the story of HRA is simple: companies that value their people as assets make
better decisions and achieve greater success.
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SECTION-B
3. What is Price Level Accounting? Explain its utility and corporate practices.
Ans: Imagine you are a shop owner, running a small grocery store. You started your business
5 years ago, and back then, a kilogram of rice cost you ₹40. Today, due to inflation, the
same kilogram costs ₹80. Now, let’s say you’re looking at your old accounting books to
figure out how well your business has been doing over the years. If you only look at the old
numbers, you might see that your profit was ₹10 per kg of rice, but this was when ₹10 could
buy more than it can today. If you don’t adjust for the changing value of money, you might
think your business is less profitable than it actually is—or even make wrong financial
decisions.
This is exactly where Price Level Accounting (PLA) steps in—it’s like giving your accounting
books a “time machine” that adjusts past financial numbers to reflect the current
purchasing power of money. It ensures that the financial statements of a company reflect
true economic reality in times of inflation or deflation.
What is Price Level Accounting (PLA)?
Price Level Accounting is an accounting method that adjusts the historical cost of assets,
liabilities, revenues, and expenses according to changes in the general price level. In
simpler terms, it converts past financial numbers into present-day equivalents, taking
inflation or deflation into account.
Think of it this way: your ₹100 five years ago was worth more than ₹100 today. PLA ensures
that your profit, assets, and expenses are expressed in today’s terms, so decisions based on
these numbers are realistic.
PLA is also called Current Purchasing Power Accounting (CPPA) because it measures
financial data in terms of the current purchasing power of money.
Why PLA is Important?
1. Inflation Adjustment
Inflation slowly eats away at the value of money. Without adjusting for it, financial
statements can give a false picture. For example, profits may appear high in nominal
terms but are actually low in real terms. PLA corrects this by restating numbers in
today’s currency value.
2. Fair Representation of Assets
Assets recorded at historical cost may undervalue a company’s wealth. For instance,
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land bought 20 years ago might be worth 10 times its recorded cost. PLA updates
asset values to reflect current market reality.
3. Better Decision Making
Managers make decisions based on financial statements. If inflation is ignored, the
business might invest, borrow, or expand based on misleading numbers. PLA helps
managers plan accurately.
4. Investor Confidence
Investors rely on accurate financial information. PLA provides clarity and
transparency, helping investors make informed decisions.
5. Avoid Distorted Profit Measurement
Without PLA, profits may be overstated or understated during inflationary periods.
PLA ensures profits reflect true economic gain, not just the effect of changing prices.
How Price Level Accounting Works
PLA typically involves three main steps:
1. Determine a General Price Index:
Companies use a price index like the Consumer Price Index (CPI) to measure how
much prices have changed over time.
2. Adjust Historical Costs:
All assets, liabilities, income, and expenses are multiplied by a conversion factor
derived from the price index.
For example:
𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝐴 𝑚𝑜𝑢𝑛𝑡
= 𝐻𝑖𝑠𝑡𝑜𝑟𝑖𝑐𝑎𝑙 𝐴 𝑚𝑜𝑢𝑛𝑡
×
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑃 𝑟𝑖𝑐𝑒 𝐼 𝑛𝑑𝑒𝑥
𝑃𝑟𝑖𝑐𝑒 𝐼 𝑛𝑑𝑒𝑥 𝑖𝑛 𝐻 𝑖𝑠𝑡𝑜𝑟𝑖𝑐𝑎𝑙 𝑌 𝑒𝑎𝑟
3. Prepare Adjusted Financial Statements:
Using the adjusted values, companies create a Price Level Adjusted Balance Sheet
and Income Statement, which reflect the current value of money.
Utility of Price Level Accounting
Let’s illustrate this with a story. Imagine two friends, Asha and Ravi, each owning a
company. Both bought machinery 10 years ago for ₹1,00,000. Now the machinery can
produce double the output, but inflation has doubled the general price level.
Without PLA:
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• Balance sheet shows machinery = ₹1,00,000.
• Profit appears smaller because depreciation is calculated on ₹1,00,000.
With PLA:
• Machinery value adjusted to ₹2,00,000.
• Depreciation reflects true cost of using the asset in today’s terms.
• Profit is realistic, helping Asha and Ravi make investment or expansion decisions
confidently.
Key utilities include:
1. Accurate Profit Measurement: Reflects real economic gain.
2. Better Tax Planning: Taxes based on true profit, not nominal inflation-distorted
profit.
3. Improved Financial Analysis: Ratios like Return on Assets (ROA) are more
meaningful.
4. Fair Dividend Distribution: Shareholders get dividends based on real profits.
5. Consistency Across Years: Makes year-to-year comparisons valid during inflation.
Corporate Practices of Price Level Accounting
While PLA sounds perfect, in real-world corporate accounting, its adoption varies. Here’s
how companies apply it:
1. Current Purchasing Power Accounting (CPPA):
Many companies adjust all items using a general price index. Assets, liabilities,
revenue, and expenses are restated. This method is common in countries with high
inflation.
2. Current Cost Accounting (CCA):
Some companies focus only on assets. They restate assets at current replacement
cost rather than historical cost. Depreciation is based on current cost, giving a more
realistic profit.
3. Hybrid Approaches:
Companies often combine PLA with historical cost for some items and current cost
for others. For example:
o Cash and receivables: Adjusted for purchasing power.
o Fixed assets: Historical cost or market value used.
4. Regulatory Compliance:
Certain accounting standards allow PLA in inflationary economies. Companies follow
these standards to maintain transparency.
5. Internal Management Use:
Even if statutory reporting uses historical cost, management may internally use PLA
for strategic decisions like expansion, budgeting, or performance evaluation.
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Challenges in PLA
Like every solution, PLA has its challenges:
1. Complex Calculations: Adjusting every asset and liability according to price indices
can be time-consuming.
2. Choice of Price Index: Different indices give different results; choosing the right one
is crucial.
3. Not Universally Adopted: In many countries, PLA is optional and companies may
prefer traditional methods.
4. Impact on Taxation: Adjusted profits may affect taxable income differently,
requiring careful planning.
Diagrammatic Representation of PLA
Conclusion: Why PLA Matters
Price Level Accounting is like putting on special glasses that reveal the real value of money
over time. It protects businesses from being misled by nominal numbers and allows for
informed decision-making in an inflationary world.
Companies using PLA enjoy:
• Accurate profit measurement
• Proper valuation of assets and liabilities
• Realistic performance assessment
• Better investment and dividend decisions
• Enhanced transparency for shareholders and investors
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In today’s economy, where inflation can silently distort financial reality, PLA ensures that
companies see the world in today’s terms, not yesterday’s. It turns accounting from a
record-keeping tool into a strategic guide for growth, sustainability, and investor
confidence.
In short, PLA is not just accounting—it’s accounting that speaks the truth in today’s money.
4. Write a brief note on Corporate Reporting and explain its conceptual framework.
Ans: The Story of Corporate Reporting: Speaking the Language of Business
Imagine a huge theatre where thousands of actors perform daily. The actors are companies,
and their stage is the economy. But here’s the challenge: how do the audience—investors,
regulators, employees, and the public—know whether the actors are performing well or just
pretending?
The answer lies in Corporate Reporting. It is the language through which companies
communicate their performance, position, and prospects to the world. Just as a play has a
script and structure, corporate reporting too has a conceptual framework that guides what
should be reported, how it should be reported, and why it matters.
Let’s walk through this story step by step.
What is Corporate Reporting?
Corporate Reporting is the systematic communication of financial and non-financial
information by a company to its stakeholders.
• It includes financial statements (balance sheet, profit & loss, cash flow).
• It also includes non-financial disclosures like corporate governance, sustainability,
risk management, and social responsibility.
• Its purpose is to provide a true and fair view of the company’s performance and
position.
In short: Corporate Reporting is the voice of the company.
Objectives of Corporate Reporting
Why do companies report? The objectives are like the guiding stars:
1. Accountability – To show how management has used shareholders’ money.
2. Transparency – To provide clear, reliable, and comparable information.
3. Decision-making – To help investors, creditors, and regulators make informed
choices.
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4. Compliance – To meet legal and regulatory requirements.
5. Trust-building – To maintain confidence among stakeholders.
Types of Corporate Reporting
Corporate Reporting is not just about numbers. It has many dimensions:
1. Financial Reporting
o Balance sheet, income statement, cash flow, notes to accounts.
o Shows financial performance and position.
2. Management Discussion and Analysis (MD&A)
o Explains strategies, risks, opportunities, and future outlook.
3. Corporate Governance Reporting
o Disclosures about board structure, committees, ethics, and compliance.
4. Sustainability and CSR Reporting
o Environmental, social, and governance (ESG) aspects.
o Shows responsibility towards society and environment.
5. Integrated Reporting
o A modern approach combining financial and non-financial information into
one holistic report.
The Conceptual Framework of Corporate Reporting
Now comes the heart of the story—the conceptual framework. Think of it as the blueprint
or constitution of reporting. It provides the principles and guidelines that ensure reports are
consistent, comparable, and useful.
The framework is issued by standard-setting bodies like the International Accounting
Standards Board (IASB) and is also reflected in Indian Accounting Standards (Ind AS).
1. Objectives of Financial Reporting
The primary objective is:
• To provide information useful to investors, lenders, and other stakeholders in
making decisions about providing resources to the company.
This includes:
• Assessing the company’s ability to generate cash flows.
• Evaluating management’s stewardship of resources.
2. Qualitative Characteristics of Information
For information to be useful, it must have certain qualities:
• Fundamental Qualities:
o Relevance: Information should influence decisions (e.g., profit trends).
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o Faithful Representation: Information should be complete, neutral, and free
from error.
• Enhancing Qualities:
o Comparability: Across time and companies.
o Verifiability: Others can check and confirm it.
o Timeliness: Provided quickly enough to influence decisions.
o Understandability: Clear and simple for users.
Example: If a company delays publishing results for 2 years, the information loses
timeliness and relevance.
3. Elements of Financial Statements
The framework defines the building blocks:
• Assets: Resources controlled by the company.
• Liabilities: Obligations to outsiders.
• Equity: Residual interest of owners.
• Income: Increases in economic benefits.
• Expenses: Decreases in economic benefits.
4. Recognition and Measurement
Not everything can be reported. The framework guides:
• Recognition: When should an item be included in financial statements?
o Example: Revenue is recognized when earned, not when cash is received.
• Measurement: At what value should items be reported?
o Historical cost, fair value, present value, etc.
5. Presentation and Disclosure
The framework emphasizes:
• Clear classification of items.
• Adequate notes and explanations.
• Fair presentation of financial position and performance.
6. Capital Maintenance Concepts
Two approaches:
• Financial Capital Maintenance: Profit is earned only if net assets increase.
• Physical Capital Maintenance: Profit is earned only if physical productive capacity
increases.
Diagram: Conceptual Framework of Corporate Reporting
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Importance of Conceptual Framework
Why is this framework so important?
• Consistency: Ensures uniformity across companies and countries.
• Guidance: Helps in developing new accounting standards.
• Clarity: Provides a common language for preparers, auditors, and users.
• Trust: Enhances credibility of corporate reports.
• Decision-making: Ensures stakeholders get reliable information.
Limitations of Conceptual Framework
But like every system, it has limitations:
• It provides broad principles, not detailed rules.
• Different interpretations may arise.
• Human judgment still plays a role, leading to subjectivity.
• Rapid changes in business (like digital assets, sustainability) may outpace the
framework.
The Narrative Angle
Think of Corporate Reporting as a bridge between the company and its stakeholders. The
conceptual framework is the architecture of that bridge.
• If the framework is strong, the bridge is safe, and information flows smoothly.
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• If the framework is weak, the bridge may collapse, leading to mistrust and financial
scandals.
Just as an architect designs a building with rules of strength, balance, and beauty, the
conceptual framework designs corporate reporting with rules of relevance, reliability, and
transparency.
Conclusion
Corporate Reporting is not just about publishing numbers—it is about telling the story of a
company’s performance, position, and prospects. Its conceptual framework ensures that
this story is told with clarity, consistency, and credibility.
• It defines the objectives of reporting.
• It lays down the qualitative characteristics of useful information.
• It identifies the elements of financial statements.
• It guides recognition, measurement, presentation, and disclosure.
• It ensures that stakeholders can make informed decisions.
In the grand theatre of business, Corporate Reporting is the script, and the conceptual
framework is the grammar that makes the script meaningful. Without it, the play would be
confusing; with it, the performance becomes clear, trustworthy, and impactful.
SECTION-C
5. Write a brief note on Value Added Reporting in detail.
Ans: Value Added Reporting: Turning Numbers into a Story of Progress
Imagine a company as a busy bakery. Every day, this bakery purchases raw materials like
flour, sugar, and eggs, transforms them into delicious cakes and pastries, and sells them to
eager customers. But how do we know if the bakery is really creating value for its
customers, employees, and shareholders? This is where Value Added Reporting (VAR)
comes into play. Unlike ordinary financial reports that simply show revenue and costs, VAR
paints a richer picture, telling a story about how much real value the business is adding
through its operations.
What is Value Added Reporting?
At its core, Value Added Reporting is a type of financial reporting that measures the wealth
a company generates from its resources. The "value added" is essentially the difference
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between what the company produces (output) and the costs of raw materials and services it
purchased from outside (input). It’s like saying:
"We bought these ingredients, we put in our skills, and voilà, here’s the cake. How much
extra value did we create for the people who contributed to this bakery?"
More formally, value added can be defined as:
Value Added = Sales Revenue – Cost of Bought-in Materials and Services
This simple formula may look small, but it tells a huge story: how efficiently a company is
using its resources to create wealth.
Why is Value Added Reporting Important?
To understand its importance, let’s step into the shoes of different stakeholders:
1. For Management: VAR helps managers see where the business is actually generating
wealth. They can identify which departments or processes are adding more value
and which are lagging. It’s like the bakery manager noticing that their chocolate
pastries sell faster than plain bread and deciding to invest more in chocolate recipes.
2. For Employees: VAR can show employees the tangible impact of their work. If the
bakery reports that employees contributed significantly to increasing value, it
creates a sense of ownership and motivates them.
3. For Investors: Investors aren’t just interested in profits; they want to see if the
company is effectively turning resources into value. VAR provides insights beyond
the usual profit figures.
4. For Governments and Economists: It helps understand contributions to the
economy. For example, in national accounts, a similar concept is used to calculate
GDP (Gross Domestic Product).
Components of Value Added Reporting
Think of VAR like a layered cake. Each layer tells a different part of the story:
1. Sales Revenue: This is the top layer, representing the total income earned from
selling products or services. It’s the starting point of the story.
2. Cost of Bought-in Materials and Services: These are the ingredients purchased from
external suppliers. In the bakery analogy, this includes flour, sugar, and eggs.
Subtracting these costs leaves us with the wealth the bakery itself created.
3. Value Added (Gross): This is the golden layer—the wealth generated by the
company’s own labor, technology, and creativity. It’s the difference between sales
and purchased inputs.
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4. Distribution of Value Added: Now comes the most human part—how this value is
shared:
o Employees: Wages, salaries, and benefits.
o Government: Taxes.
o Shareholders: Dividends.
o Reinvestment: Retained earnings for future growth.
By reporting this, a company shows not only that it is profitable but also how it contributes
to society and its own growth.
How Value Added Reporting Differs from Profit Reporting
Many people confuse profit with value added. Let’s clear the confusion:
• Profit focuses on the bottom line: Revenue – Total Expenses = Profit.
• Value Added focuses on wealth created internally: Revenue – Cost of External Inputs
= Value Added.
Think of it this way: A company may have high sales but also spend huge amounts on raw
materials from outside. Its profit could be small, but its value added—the wealth it truly
created internally—might be impressive. VAR highlights the internal contribution rather
than just external transactions.
Objectives of Value Added Reporting
Value Added Reporting serves multiple purposes:
1. Measure True Economic Contribution: Shows how much wealth the company itself
is generating.
2. Encourage Employee Participation: Employees see their direct contribution to
wealth, fostering motivation.
3. Facilitate Better Decision-Making: Helps managers allocate resources efficiently.
4. Promote Transparency: Investors and regulators get a clear picture of the company’s
value creation process.
5. Highlight Social Responsibility: By showing value distribution to employees,
government, and shareholders, it emphasizes fairness and accountability.
Steps in Preparing a Value Added Statement
Creating a value added report is straightforward if you follow these steps:
1. Start with Revenue: Total sales or turnover of the company.
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2. Deduct Bought-in Inputs: Include raw materials, utilities, outsourced services.
3. Calculate Value Added: Subtract step 2 from step 1.
4. Distribute Value Added: Show how the wealth is shared among employees, taxes,
shareholders, and retained earnings.
5. Analyze: Compare with previous years or industry benchmarks to evaluate efficiency
and growth.
Advantages of Value Added Reporting
1. Focus on Internal Efficiency: Shows which parts of the organization are truly
productive.
2. Motivation for Employees: Employees feel recognized when their contribution to
value is visible.
3. Investor Confidence: Investors get a better idea of the company’s sustainability.
4. Management Insight: Helps in strategic decision-making and resource allocation.
5. Holistic View: Unlike traditional profit reports, VAR shows the company’s economic
and social impact.
Limitations of Value Added Reporting
1. Non-Financial Contributions Ignored: Creativity, brand value, or goodwill may not be
fully captured.
2. Requires Accurate Data: Mistakes in recording purchased inputs or sales can
misrepresent value.
3. Comparability Issues: Different companies may follow different methods, making
comparisons tricky.
4. Focus on Short-Term Metrics: VAR shows the current wealth created, but not future
potential.
Example of Value Added Reporting
Here’s a simplified illustration of a bakery’s Value Added Statement:
Particulars
Amount (₹)
Sales Revenue
1,00,000
Less: Cost of Bought-in Materials
40,000
Value Added
60,000
Distribution of Value Added:
Employees (Wages & Benefits)
30,000
Government (Taxes)
10,000
Shareholders (Dividends)
5,000
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Retained for Growth
15,000
Total Distribution
60,000
This table tells a story at a glance: out of ₹1,00,000 sales, the bakery generated ₹60,000
wealth through its own efforts, which was then distributed among employees, government,
shareholders, and retained earnings.
Visualizing Value Added Reporting
Here’s a simple diagram that explains the concept:
This visual helps anyone see where the value flows—from sales to inputs to creation, and
finally, distribution.
Conclusion
Value Added Reporting transforms raw numbers into a narrative of creation, effort, and
fairness. It goes beyond profits, showcasing the real wealth generated by an organization
and how it benefits everyone involved—employees, shareholders, the government, and the
company itself. Think of it as a mirror reflecting not just what the company earned, but how
it earned it and how it shared that success.
In today’s competitive and socially conscious world, VAR is not just a reporting tool—it’s a
story of purpose, efficiency, and transparency. For a student, understanding VAR is like
reading the heart of a business: it tells us where the blood flows, how strong the pulse is,
and who keeps the body alive.
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6. Explain the concept of Basel Norm III in detail.
Ans: The Story of Basel Norm III: Building Stronger Banks After the Storm
Once upon a time, the global financial world was shaken by a massive storm—the 2008
Global Financial Crisis. Banks collapsed, economies shrank, and millions lost jobs. The storm
revealed a bitter truth: many banks were sailing with weak ships. They had thin capital, risky
loans, and little preparation for rough seas.
The world’s financial guardians gathered in Basel, Switzerland, under the Bank for
International Settlements (BIS). They asked: “How can we make banks safer, stronger, and
more resilient so that another storm doesn’t sink the global economy?”
The answer was Basel Norm III—a set of international banking regulations designed to
strengthen the global banking system.
What are Basel Norms?
Before diving into Basel III, let’s understand the basics.
• Basel Norms are international standards issued by the Basel Committee on Banking
Supervision (BCBS).
• Their purpose: to ensure banks across the world maintain adequate capital, manage
risks, and remain stable.
• They are not laws but guidelines. Countries adopt them into their own regulations.
Think of Basel Norms as the safety rules for banks, just like traffic rules for drivers.
• Basel I (1988): Focused on minimum capital requirements.
• Basel II (2004): Added risk management and supervisory review.
• Basel III (2010, post-crisis): Strengthened capital, introduced liquidity rules, and
reduced systemic risks.
Why Basel III Was Needed
The 2008 crisis showed that:
• Banks had too little capital compared to their risks.
• They relied heavily on short-term borrowing.
• They lacked liquidity (cash to meet sudden withdrawals).
• Some banks were “too big to fail,” creating systemic risks.
Basel III was introduced to fix these weaknesses and make banks shock-proof.
Key Features of Basel III
Let’s break down Basel III into its main pillars, with simple examples.
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1. Higher Capital Requirements
Capital is the cushion that protects banks when loans go bad.
• Under Basel III, banks must hold more and better-quality capital.
• Focus is on Common Equity Tier 1 (CET1)—the purest form of capital (shareholder
equity, retained earnings).
Minimum Requirements:
• CET1: 4.5% of risk-weighted assets (RWAs).
• Tier 1 Capital: 6% of RWAs.
• Total Capital: 8% of RWAs.
Example: If a bank has risky loans worth ₹100 crore, it must hold at least ₹8 crore as
capital, with a large portion in CET1.
2. Capital Buffers
To make banks even safer, Basel III introduced buffers:
• Capital Conservation Buffer (CCB): Extra 2.5% of CET1 to absorb losses in tough
times.
• Countercyclical Buffer: 0–2.5% to be built during economic booms, so banks have
reserves during downturns.
Like squirrels storing nuts in summer for winter.
3. Leverage Ratio
Some banks looked strong on paper but were actually over-borrowed. To prevent this, Basel
III introduced a leverage ratio.
• Minimum leverage ratio = 3%.
• It compares Tier 1 capital to total assets (not risk-weighted).
This ensures banks don’t borrow excessively, even if their assets look “safe.”
4. Liquidity Standards
The crisis showed that banks ran out of cash quickly. Basel III introduced two liquidity ratios:
• Liquidity Coverage Ratio (LCR):
o Banks must hold enough High-Quality Liquid Assets (HQLA) to survive a 30-
day stress scenario.
o Example: If ₹100 crore could flow out in 30 days, the bank must hold ₹100
crore in liquid assets like government bonds.
• Net Stable Funding Ratio (NSFR):
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o Ensures banks fund their activities with stable sources (like long-term
deposits) rather than short-term borrowing.
o Promotes long-term stability.
5. Systemically Important Banks (SIBs)
Some banks are so big that their failure could collapse the entire system. Basel III requires
such banks to hold extra capital.
Like giving stronger lifeboats to the biggest ships.
6. Risk Coverage
Basel III expanded risk coverage:
• Better treatment of derivatives and off-balance-sheet exposures.
• Stricter rules for counterparty credit risk.
Impact of Basel III
Positive Impacts
• Stronger banks: More capital and liquidity.
• Reduced risk of collapse: Better buffers.
• Global stability: Common standards across countries.
• Investor confidence: Safer banking system.
Challenges
• Higher costs: Banks need more capital, reducing profitability.
• Slower lending: Stricter rules may reduce credit growth.
• Implementation issues: Developing countries may struggle to adopt fully.
Basel III in India
The Reserve Bank of India (RBI) has implemented Basel III in phases.
• Indian banks must maintain CET1, CCB, and leverage ratios as per Basel III.
• Full implementation was targeted by 2019, but timelines were extended due to
COVID-19.
• RBI also applies stricter norms in some areas, making Indian banks relatively safer.
Basel III vs Basel II
Aspect
Basel II
Basel III
Capital
8% minimum
Higher CET1, buffers
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Risk Coverage
Credit, market, operational
risk
Expanded to derivatives, counterparty risk
Leverage
Ratio
Not emphasized
Introduced (3%)
Liquidity
Not covered
LCR & NSFR introduced
Buffers
None
Capital conservation & countercyclical
buffers
The Narrative Angle
Think of Basel III as the new architecture of banking safety.
• Basel I built the foundation.
• Basel II added walls and windows.
• Basel III reinforced the structure with steel beams, fire exits, and emergency supplies
after the earthquake of 2008.
It ensures that banks are not just profitable in good times but also resilient in crises.
Conclusion
Basel Norm III is more than just a regulation—it is a global shield against financial instability.
• It strengthens capital adequacy.
• It introduces buffers for tough times.
• It controls leverage to prevent over-borrowing.
• It ensures liquidity so banks can survive sudden shocks.
• It protects the system from the collapse of big banks.
In essence, Basel III transforms banks from fragile ships into sturdy vessels, ready to face the
storms of global finance.
SECTION-D
7. Write down the significance and formulation of Accounting Standards in detail.
Ans: Accounting Standards: Significance and Formulation Explained
Imagine you are at a bustling marketplace, filled with countless shops selling similar goods.
Each shop has its own way of displaying prices, measuring quantities, and giving receipts. As
a customer, wouldn’t it be confusing if every shop used a different method? How would you
know if you were paying fairly or comparing apples to apples?
The world of business works in much the same way. Companies all over the world earn,
spend, borrow, and invest money, but if each company keeps its financial records
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differently, investors, lenders, and even government authorities would struggle to
understand them. This is where Accounting Standards come into play.
Accounting standards are like the rules of the marketplace. They ensure that every “shop”
(or company) presents its financial information in a consistent, transparent, and
understandable way, making comparisons and decisions easier for everyone.
What Are Accounting Standards?
In simple terms, Accounting Standards are authoritative guidelines or rules that specify
how various financial transactions and events should be recognized, measured, presented,
and disclosed in financial statements.
Think of them as a cookbook. Without a recipe, every chef cooks differently, leading to
inconsistent results. Similarly, without accounting standards, financial statements could be
misleading or confusing. Accounting standards standardize the “recipe” for preparing
financial statements.
Significance of Accounting Standards
Accounting standards play a critical role in the financial world. Let’s explore their
significance in a story-like manner:
1. Ensuring Uniformity
Imagine a classroom where every student uses a different scale to measure ingredients for a
science experiment. The results would be impossible to compare. Similarly, accounting
standards ensure uniformity in financial reporting.
• Companies in the same industry follow the same rules, making it easier for
stakeholders to compare their performance.
2. Enhancing Transparency
Transparency is like clean glass—it allows stakeholders to see clearly what is happening
inside a business.
• Without standards, a company could hide losses or inflate profits. Accounting
standards ensure that financial statements give a true and fair view, so
stakeholders can make informed decisions.
3. Improving Credibility
A company that follows recognized accounting standards gains trust.
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• Investors, banks, and regulatory authorities are more likely to rely on financial
statements prepared according to established standards because they know the
numbers are reliable and consistent.
4. Facilitating Comparisons
Imagine trying to compare the weight of apples measured in kilograms with oranges
measured in pounds. Confusing, right?
• Accounting standards allow financial statements to be comparable across
companies and time periods, helping investors, managers, and analysts make better
decisions.
5. Guiding Accounting Practice
For accountants, accounting standards serve as a roadmap or compass. They provide clear
instructions on how to record and present financial transactions, reducing confusion and
subjective judgment.
6. Legal and Regulatory Compliance
Most countries mandate the adoption of accounting standards. Compliance ensures that
companies avoid penalties, legal disputes, and issues with regulatory authorities.
Formulation of Accounting Standards
Formulating accounting standards is like writing a fair and precise rulebook for a game. It
involves careful planning, consultation, and approval to ensure it serves all stakeholders.
Here’s the step-by-step story of how standards are formulated:
Step 1: Identifying the Need
Imagine a company struggling with how to report revenue from digital services. Accounting
standard setters identify the need for guidance in such areas.
• The problem is studied in detail: What is confusing? Who is affected?
Step 2: Research and Consultation
Once the need is identified, the standard-setting body (like the Institute of Chartered
Accountants of India – ICAI or the International Accounting Standards Board – IASB) begins
research.
• They consult stakeholders: companies, auditors, investors, academicians, and
regulators.
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• They examine existing practices, international standards, and the impact on financial
reporting.
Step 3: Drafting the Exposure Draft
After research, a preliminary version called an Exposure Draft is prepared. Think of it as a
first draft of a story.
• The draft explains the proposed rules in detail.
• Stakeholders are invited to give feedback, suggestions, or concerns.
Step 4: Public Comments and Revisions
The draft is circulated widely to collect opinions.
• Comments may lead to revisions, additions, or simplifications.
• This ensures that the standard is practical, understandable, and widely acceptable.
Step 5: Finalization and Approval
After careful consideration of feedback, the accounting standard is finalized.
• It is then officially issued and published for companies to adopt.
• Once issued, the standard is mandatory and becomes part of the accounting
framework.
Step 6: Continuous Review
The world of business constantly evolves. New transactions, technology, and business
models emerge.
• Accounting standards are periodically reviewed and updated to remain relevant.
Real-Life Analogy
Think of accounting standards like traffic rules.
• Without traffic rules, everyone would drive randomly, causing confusion and
accidents.
• With rules, traffic flows smoothly, accidents decrease, and everyone reaches their
destination safely.
Similarly, accounting standards regulate financial reporting, ensuring clarity, comparability,
and reliability in the business “traffic” of numbers.
Key Accounting Standard Examples
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To make this even more relatable, let’s see some examples:
1. Revenue Recognition Standard – Dictates when a company should recognize
revenue. Imagine a bookstore: should revenue be recorded when a book is ordered
or when it is delivered? Standards give a clear answer.
2. Inventory Valuation Standard – Guides how to value stock of goods. Without it,
companies could inflate profits by overvaluing inventory.
3. Depreciation Standard – Explains how to allocate the cost of assets over time. This
prevents companies from showing unrealistic profits by avoiding asset wear-and-tear
costs.
Conclusion
Accounting standards are more than just technical rules; they are the heartbeat of
transparent and trustworthy financial reporting. They:
• Create uniformity across businesses
• Enhance transparency and credibility
• Guide accountants in practical decision-making
• Help stakeholders compare and analyze financial information
• Ensure legal and regulatory compliance
Formulating these standards is a careful, consultative, and dynamic process, ensuring they
meet the evolving needs of businesses and society.
In short, accounting standards are the invisible backbone of financial communication. They
make the complex world of business understandable, fair, and trustworthy, just like rules
make a game fair and enjoyable for everyone.
8. Write a brief note on contemporary issues in Management Accounting.
Ans: The Story of Contemporary Issues in Management Accounting
On a rainy evening, a group of managers sat around a boardroom table. The company had
the latest machines, a global supply chain, and a strong workforce. Yet, the managers
looked worried.
One asked, “Our financial statements show profits, but why are we losing market share?”
Another added, “We cut costs last year, but customer satisfaction dropped. Did we make the
right decision?” A third sighed, “We have so much data, but how do we turn it into
meaningful insights?”
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This scene captures the modern dilemma of management accounting. Once upon a time,
management accounting was about preparing budgets, calculating costs, and analyzing
variances. But today’s business world is far more complex. Globalization, technology,
sustainability, and competition have created new challenges and issues that management
accountants must address.
Let’s explore these contemporary issues in management accounting step by step, like
chapters in a story.
What is Management Accounting?
Before diving into the issues, let’s recall the basics.
Management Accounting is the process of preparing and analyzing financial and non-
financial information to help managers make better decisions.
• It focuses on internal use (unlike financial accounting, which is for external
reporting).
• It helps in planning, controlling, decision-making, and performance evaluation.
But as the business environment changes, so do the challenges faced by management
accountants.
Contemporary Issues in Management Accounting
Here are the major issues shaping the field today.
1. Globalization and Competition
Businesses no longer compete only locally—they face global rivals.
• Management accountants must compare costs, prices, and productivity across
countries.
• Exchange rate fluctuations, global supply chains, and international tax rules
complicate decision-making.
• Example: A company deciding whether to manufacture in India or Vietnam must
analyze labor costs, tariffs, logistics, and risks.
Issue: Management accounting must adapt to global cost structures and competitive
pressures.
2. Technological Advancements and Big Data
The digital age has flooded companies with data.
• ERP systems, AI, and analytics generate massive amounts of information.
• The challenge is not collecting data, but turning it into actionable insights.
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• Management accountants must learn data analytics, predictive modeling, and
visualization tools.
Issue: Moving from “number crunchers” to strategic data analysts.
3. Sustainability and Environmental Accounting
Today, success is not just measured in profits but also in planet and people.
• Companies must account for carbon emissions, waste, and social responsibility.
• Management accountants must develop systems for environmental cost accounting
and sustainability reporting.
• Example: A factory may show profits, but if it pollutes heavily, the long-term costs
(fines, reputation loss) must be considered.
Issue: Integrating sustainability and CSR into management accounting.
4. Ethics and Corporate Governance
Scandals like Enron and Satyam showed how unethical practices can destroy companies.
• Management accountants face pressure to manipulate numbers for short-term
gains.
• Strong ethical standards and transparent reporting are essential.
• They must balance loyalty to management with responsibility to stakeholders.
Issue: Ensuring ethical decision-making and governance.
5. Customer-Centric and Value-Based Approaches
Traditional accounting focused on costs and profits. Modern management accounting must
also focus on customer value.
• Tools like Activity-Based Costing (ABC) and Target Costing help identify which
products or customers add real value.
• Example: A product may have high sales but low margins after considering service
costs.
Issue: Shifting from cost control to value creation.
6. Performance Measurement Beyond Finance
Earlier, performance was judged by profit and ROI. Today, companies use Balanced
Scorecards and Key Performance Indicators (KPIs).
• These include financial, customer, internal process, and learning & growth
perspectives.
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• Example: A company may be profitable today but losing innovation capacity—
management accounting must highlight this risk.
Issue: Measuring non-financial performance alongside financial results.
7. Risk Management and Uncertainty
The world is full of uncertainties—pandemics, wars, inflation, cyberattacks.
• Management accountants must assess risks and prepare scenarios.
• Tools like sensitivity analysis, stress testing, and risk-adjusted return measures are
used.
Issue: Integrating risk management into decision-making.
8. Short-Term vs Long-Term Focus
Managers often focus on quarterly profits, but long-term sustainability may suffer.
• Example: Cutting R&D boosts short-term profit but harms future innovation.
• Management accountants must highlight the trade-offs between short-term gains
and long-term growth.
Issue: Balancing immediate results with future strategy.
9. Changing Role of Management Accountants
Traditionally, they were “scorekeepers.” Today, they are expected to be business partners.
• They must advise on strategy, innovation, and competitiveness.
• They need communication, leadership, and analytical skills.
Issue: Redefining the role from accountant to strategic advisor.
10. Integration with Technology (AI, Blockchain, Automation)
• AI can automate routine accounting tasks.
• Blockchain can provide transparent, tamper-proof records.
• Management accountants must adapt to these technologies, focusing on
interpretation and strategy rather than manual work.
Issue: Embracing digital transformation.
Diagram: Contemporary Issues in Management Accounting
Here’s a simple diagram to visualize the issues:
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This shows how multiple issues branch out and interconnect.
Advantages of Addressing These Issues
• Better decisions: Data-driven and holistic.
• Sustainability: Long-term survival and reputation.
• Global competitiveness: Adapting to international standards.
• Stakeholder trust: Through ethics and transparency.
• Innovation: By focusing on value creation.
Challenges in Addressing These Issues
• Requires new skills (analytics, IT, strategy).
• Resistance to change from traditional managers.
• High cost of implementing new systems.
• Difficulty in measuring intangible factors like brand value or employee morale.
The Narrative Angle
Think of management accounting as a navigator on a ship. In the past, the navigator only
needed a compass and a map. Today, the seas are stormier, with global competition, digital
waves, and environmental icebergs. The navigator now needs satellites, weather forecasts,
and risk models.
Contemporary issues are like these new challenges. If management accountants adapt, they
guide the ship safely. If not, the ship risks sinking despite having strong sails.
Conclusion
Contemporary issues in management accounting reflect the changing world of business.
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• From globalization to technology, from sustainability to ethics, from customer
value to risk management—management accountants must evolve.
• Their role is no longer limited to cost control; they are now strategic partners
shaping the future of organizations.
• By addressing these issues, management accounting becomes not just a tool of
numbers, but a compass for sustainable success.
So, the story of management accounting today is not about keeping books—it is about
keeping businesses alive, competitive, and responsible in a complex world.
“This paper has been carefully prepared for educational purposes. If you notice any mistakes or
have suggestions, feel free to share your feedback.”
