ICAEW BST EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026

ICAEW BST EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026 Situational Ethics Q Approach - Answers 1) what is the issue, do i have all the facts? 2) legal or regulatory issues? 3) codes of conduct? 4) stakeholders involved and how they are impacted? 5) ethical principles or threats? 6) recommended course of action? 7) sustainability / corporate governance / corporate social responsibility issues? Sustainability - Answers Meeting the needs of the present without compromising the ability of future generations to meet their own needs Social (ESG) - Answers Labour standards Diversity and inclusion Health and safety Human rights etc Environmental (ESG) - Answers Waste Air quality Resource use Governance (ESG) - Answers Board accountability Shareholder engagement Anti-bribery and corruption Impact of ethics on strategy - Answers Revenue streams Pressure groups Fairness of labour contracts Privacy of customers and employees Trade terms with suppliers Prices to customers Cross cultural business Sustainability factors - Answers Social Economic Environmental Social (SEE) - Answers The way an organisation considers workers rights in supply and customer chains Economic (SEE) - Answers Organisational survival and onward benefits of job provision, local economic development, compliance and investment Environmental (SEE) - Answers Impact that the organisation has on the environment in terms of pollution, waste, onward impact of products etc Corporate Social Responsibility (CSR) - Answers Strategic actions, activities and obligations of business in achieving sustainability Proactive Strategy - Answers Full responsibility for corporate actions and situations are managed before coming to attention Reactive Strategy - Answers Action is prompted by a pressure group, otherwise no action is taken Defence Strategy - Answers Obligations arising from problems are minimised, avoided, or passed on to others Accommodating Strategy - Answers Responsibility for some corporate matters is taken - done more when encouraged to do so or to avoid government intervention Ethical issues in manufacturing - Answers Pollution, carbon emissions etc Cost reduction - automation of processes Defective, addictive and dangerous products Living wages, child labour, working conditions New technologies End of life products New Information Systems - Benefits - Answers Increased revenue - data mining Enhanced service - fast solving Improved decision making - forecasting, market analysis etc Risks with IT and IS - Answers Inadequacy - not used effectively and loses it's competitive advantage Breakdown - threat of not being able to operate if broken down Excess expense Cyber Risks on IT systems - Answers Human threats - hackers Fraud Deliberate sabotage Viruses and other corruption Denial of Service attack General Risks on IT systems - Answers Natural threats - fire, flood Integrity - loss of data, incorrect entry Non-compliance - data protection Accidents - human error Security controls for IT systems - Answers Prevention Detection Deterrence Recovery Correction Avoidance Big Data 4 V's - Answers Volume, Velocity, Variety, Veracity (how truthful it is) Criticisms of Big Data - Answers Latest buzzword - does it tell anything that the company didn't already know Correlation and causation - trends but no why Data overload - not necessarily valuable Sustainable competitive advantage - if everyone is doing it, no advantage Representative data - only data captured is useful Knowledge technologies - Answers Digital assets Knowledge management systems - somewhere to allow everyone's knowledge to be collated Financial technologies - Answers Distributed ledger - companies record its own transactions in a way that can be verified Blockchain - can't go back and change transactions Cryptocurrency Contribution per unit - Answers Selling price - variable cost per unit Break even output - Answers Total fixed costs / contribution per unit Margin of Safety - Answers (Planned sales - break even sales) / planned sales Output to hit a higher target - Answers (Total fixed costs + target profit) / contribution per unit Issues with Breakeven Analysis - Answers Assumes revenue and variable costs change proportionally with volume Some fixed costs are stepped fixed costs Hard to identify which costs are attributable to products Probability - Multiplication rules - Answers "AND" Independent events - events that have no impact on each other Dependent events - events impact each other Probability - Addition rules - Answers "OR" Mutually exclusive events - both events happening at the same time Non-mutually exclusive events - chance of both events happening at the same time Expected value - Answers Sum of (probability of the outcome occurring x outcome) EV in decision making - Answers +ve EV = project should be accepted -ve EV = project should be rejected highest EV of PROFIT should be selected (lowest EV of COST) EV limitations - Answers Probabilities may be unreliable or inaccurate Long term averages Attitude to risk is not considered Time value of money is not considered Limitations of decision trees - Answers Estimate values and so subjective and unreliable Only consider financial outcomes being assessed Standard deviation - Answers Amount of variability in a data set - how far on average each result lies from the mean Projects with higher STDEV will exhibit more variation in their cash flow Coefficient of Variation - Answers Ratio of the standard deviation to the mean (STDEV / mean) x 100% Problems with Data - Answers Professional scepticism Comparability issues Outliers Data bias - Answers Selection - not selected randomly enough Self-selection - individuals select themselves Observer - researcher allows their assumptions to influence Omitted variable - omits key variables that results in incorrect findings Cognitive - human perception and how data is presented Confirmation - accepts data that confirms beliefs only Survivorship - contains data that has previously survived some other event Risk - Answers Ability to quantify the chance of something happening Uncertainty - Answers Inability to predict the outcome of an activity due to lack of information Risk management strategy - Answers Selection, implementation, monitoring and review of suitable risk treatments for each risk identified Risk management process - Answers identify risk areas - understand and assess scale of risk - develop response strategy - implement strategy and allocate resources - implement and monitor controls - review and refine process Risk register - Answers Records: description of the risk nature of the risk parties affected likelihood and impact tolerance or appetite for risk risk treatment and control potential action Risk appetites - orientations - Answers Defenders - low rise, secure markets Prospectors - results, entrepreneurial, pro-active Analysers - stable products and markets and follow change Reactors - oblivious to risk Influences on risk appetite - Answers Shareholder expectation Organisational attitudes National origin of org Regulatory framework Nature of ownership Views of managers Risk Indentification - Answers Theories contained external and internal environments and any changes in them (PESTEL, P5Fs) Activities and processes undertaken Culture Potential for unexpected outside events Risk Categorisation - Answers Strategic risk - longer term strategic objective and potential variability of returns Operations risk - day to day activities Hazard risk - natural events, actions of employees Financial risk - gearing, exposure to credit, interest rates Compliance risk - NOCLARs Evaluation and addressing risk - Answers "TARA" Transfer (insurance, hedging) Accept Reduce (prevent, detect, correct, direct) Avoid Failure to manage risk - Answers Litigation Fines from regulatory bodies Loss of assets - theft or damage