An assurance engagement is when an independent auditor checks financial statements prepared by a company and
then gives confidence (assurance) to users that the information is reliable and trustworthy.
Key Elements of an Assurance Engagement
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Three Parties – Practitioner (Auditor), Responsible Party (company) and Intended Users (shareholders)
Subject Matter – financial statements
Suitable Criteria – IFRS
Sufficient Appropriate Evidence – bank statements
Assurance Report
Reasonable Assurance Engagement
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The auditor collects a lot of evidence
Risk of wrong conclusion is very low
Provides a high level of assurance
Conclusion is given positively
Limited Assurance Engagement
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The auditor collects limited evidence
Risk of wrong conclusion is higher than reasonable assurance
Provides a moderate level of assurance
Conclusion is given negatively
An engagement letter is a written agreement between the auditor and the client that clearly states the terms and conditions of
the audit work.
If a mistake or omission is big enough to affect someone’s decision, it is material. If it’s too small, it is immaterial.
Audit Risk (AR): The risk that the auditor gives an incorrect opinion on financial statements that have material
mistakes.
Inherent Risk (IR): The risk that errors or fraud may occur naturally in an account or transaction, before
considering any controls.
Control Risk (CR): The risk that a company’s internal controls fail to prevent or detect a mistake.
Detection Risk (DR): The risk that the auditor’s procedures fail to detect a material mistake.
Audit Evidence: The information or proof the auditor collects to check whether financial statements are correct and
reliable.
Internal Control: It is a system of rules and checks in a business that helps prevent mistakes or problems
Objective of an Audit: To check financial statements and give confidence that they are correct.
True and Fair View: Financial statements accurately show the company’s financial position.
Professional Scepticism: Auditor always questions and doubts the information until sure it’s correct.
Professional Judgement: Auditor uses experience and knowledge to make decisions during the audit.
Unqualified Opinion: Auditor says accounts are correct without any problem.
Qualified Opinion: Auditor says accounts are mostly correct, except for some issues.
Adverse Opinion: Auditor says accounts are wrong and unreliable.
Disclaimer of Opinion: Auditor cannot give any opinion due to lack of evidence.
STATE THE SEVEN HEADS OF INCOME
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Income from employment
lncome from rent
lncome from agriculture
Income from business
lncome from financial assets
lncome from other sources
Capital gain
a.​ Income from cattle rearing
b.​ Income from sale of palm juice and date juice
c.​ Income from sale of seeds and grass, if grown by human effort
d.​ Income from sale of herbal or medicinal plants
e.​ Income from cultivation of flower and fruits
f.​ Income from sale of honey
g.​ Income from dairy farm
h.​ Income from poultry farm
i.​ Income from fisheries, etc.
Perquisite: Extra benefits given by an employer to an employee in addition to salary (e.g., house, car, medical benefits).
Tax: A compulsory payment made to the government to run the country.
Income Tax: A tax paid to the government on income earned by individuals or organisations.
Objectives of Income Tax:
●​ To raise government revenue
●​ To reduce income inequality
●​ To control inflation and economic growth
Importance of Income Tax:
●​ Funds public services like education, health, and roads
●​ Helps in economic development
●​ Supports social welfare programs
E-commerce​
E-commerce means buying and selling goods or services over the internet.​
Example: Ordering clothes from an online shop.
E-business​
E-business is broader than e-commerce. It includes online buying and selling as well as online business activities
like customer service, payments, and supply management.​
Example: An online store managing orders and customer support digitally.
B2B (Business to Business)​
B2B means one business sells to another business.​
Example: A wholesaler selling raw materials to a factory.
B2C (Business to Consumer)​
B2C means a business sells directly to consumers.​
Example: Daraz selling products to customers.
C2B (Consumer to Business)​
C2B means individual consumers offer products or services to businesses.​
Example: A freelancer providing design services to a company.
C2C (Consumer to Consumer)​
C2C means consumers sell to other consumers using an online platform.​
Example: Selling a used phone on Facebook Marketplace.
Digital Economy​
The digital economy refers to economic activities that use digital technologies, such as the internet, computers, and
mobile devices, to produce and sell goods and services.
Customer Centricity​
Customer centricity means focusing the business on customer needs and satisfaction while making decisions about
products, services, and processes.
E-Commerce Fraud​
E-commerce fraud is illegal or dishonest activities in online buying and selling, such as fake websites, online
payment scams, or misuse of customer information.
Business Model​
A business model explains how a business operates and creates value for customers.
Revenue Model​
A revenue model explains how a business earns money, such as through sales, subscriptions, or advertising.
E-Supply Chain​
An e-supply chain is the use of digital systems and the internet to manage supply chain activities, including
ordering, production, and delivery.
E-Business Advantages (Keywords):
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Global reach
Lower cost
24/7 operation
Faster transactions
Wider market
Automation
Better data management
E-Business Disadvantages (Keywords):
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Security risk
Privacy issues
Technology dependence
High initial setup cost
Technical failures
Limited personal contact
Legal and regulatory issues
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An intranet is a private network used only inside an organisation to share information among employees.​
An extranet is a private network that allows limited access to outsiders, such as suppliers or partners, to share
information securely.
Ethics: What is good or right for human beings. Both the Goal and Actions that lead to the goal should be ethical
Morality: Personal principles of right and wrong. It comes from culture, religion, or individual belief
Law: A formal system of rules enforced by governmental institutions. The law’s objective is to maintain social order, protect
rights, and promote justice.
Business ethics means the moral rules and values that guide how a business behaves.
ETHICAL DILEMMA: Situations in which an agent stands under two (or more) conflicting moral obligations, none of
which overrides the other
Genuine Ethical Dilemma
Apparent Ethical Dilemma
- Both obligations cannot be fulfilled simultaneously
- Initial perception of conflict
- Conflicting obligations are of comparably strong weight
- When examined deeply, one obligation overrides the other
- Whichever course of action is chosen, the agent will have
to neglect a serious moral duty or value
- Conflict is resolvable
Internalisation: When a person truly accepts a belief or behaviour as their own because they believe it is right.
Identification: When someone adopts the behaviour or values of a person or group they admire or want to be like.
Compliance: When a person follows rules or behaves a certain way to gain approval or avoid punishment, even if they don’t
personally agree.
DELIBERATION: Evaluating the reasons for doing an act according to some standards/principles
ETHICAL SUBJECTIVISM Ethical judgments are based on individual personal feelings or opinions.
ETHICAL RELATIVISM Ethical standards depend on culture, society, or social norms.
PSYCHOLOGICAL EGOISM Humans always act in their own self-interest, even when appearing to be altruistic.
ETHICAL EGOISM Individuals ought to act in their own self-interest.
HEDONISTIC EGOISM The highest good is personal pleasure and the avoidance of pain.
CONSEQUENTIALISM – Judges actions by their results or consequences; an act is right if it produces good outcomes.
UTILITARIANISM Action is ethically right if it produces the greatest overall good (happiness/utility) for the greatest
number of people.
KANTIAN ETHICS - Ethics is based on duty and ethical rules, not outcomes.
BARRIER RIGHTS
➭​ Rights that protect an individual from interference by others.
➭​ They create a barrier around a person’s freedom, meaning others have a duty not to act against that freedom.
WELFARE RIGHTS
➭​ Rights that require active support or provision from others so that individuals can live with basic dignity.
Apparent Conflict - Arises when two unqualified rights clash.
Real Conflict - Arises when two qualified rights cannot be fully exercised simultaneously.
Virtue Ethics A practical ethical theory that focuses on developing virtues (good character traits).
A project is a temporary activity done to achieve a specific goal within a fixed time, cost, and scope.​
Example: Developing a new mobile app.
A program is a group of related projects managed together to achieve a bigger objective.​
Example: Several IT projects together to digitise a company.
Project management is the process of planning, organising, leading, and controlling project activities to complete a project
successfully.
Project planning means deciding what to do, how to do it, when to do it, and who will do it before starting the project.
A project manager is the person responsible for leading the project, managing resources, and ensuring the project is
completed on time, within budget, and according to plan.
Project feasibility analysis is the study done before starting a project to check whether the project is practical and worth doing.
Technical feasibility checks whether the organisation has the technology, equipment, and skills needed to complete the
project.​
Example: Checking if the company has the software and IT experts to build a website.
Economic feasibility checks whether the project is financially affordable and profitable.​
Example: Comparing project costs with expected profits.
Legal feasibility checks whether the project follows laws, rules, and regulations.​
Example: Ensuring a factory project follows labour and environmental laws.
PROJECT MANAGEMENT PROCESS
1.​ Project Initiation
2.​ Project Planning
3.​ Project Execution
4.​ Project Monitoring and Control
5.​ Project Closure
STEPS IN PROJECT PLANNING
Step 1: Setting Project Goals
Step 2: Project Deliverables
Step 3: Project Schedule
Step 4: Supporting Plans
A project budget is the estimated total cost needed to complete a project, including materials, labour, and other expenses.
Top-down budgeting is a method where top management sets the total budget first, and then the amount is divided among
different project activities.
Bottom-up budgeting is a method where each activity’s cost is estimated first, and then all costs are added together to form
the total project budget.
Scheduling is the process of deciding the sequence and timing of project activities to ensure the project is completed on time.
Project monitoring is the continuous process of tracking project progress to ensure activities are going according to plan, and
taking corrective action if problems arise.
Activity: A specific task or set of tasks that are required by the project, use up resources, and take time to complete.
Event The result of completing one or more activities. An identifiable end state occurring at a particular time. Events use no
resources
Network: The combination of all activities and events that define the project and their precedence relationships.
Path: The series of connected activities or intermediate events between any two events in a network.
Critical Activities, events, or paths which, if delayed, will delay the completion of the project. A project’s critical path is the
sequence of critical activities that connect the project’s start event to its finish event.
PROJECT CRASHING An activity that shortens the project completion time by adding more resources at the minimum
additional cost.
Technology refers to the practical use of knowledge, tools, machines, and methods to solve problems and produce goods or
services.
New Technology means recently developed technology that improves existing products or processes.​
Emerging Technology refers to technology that is still developing and is expected to have a major impact in the future​
Appropriate Technology: A design philosophy where technology is specifically chosen to be simple, affordable, and
sustainable for the local cultural, economic, and environmental context.
High Technology: Advanced or sophisticated technologies utilised by the company.
Low Technology: Simple technologies that have spread through large market segments utilised by the company.
Medium Technology lies between high and low technology and uses some machines but not very advanced systems, such as
semi-automated manufacturing.​
Product Technology relates to the design and features of a product itself.​
Process Technology refers to the methods and techniques used to produce goods or services.
Technoware includes physical tools, machines, and equipment used in production.​
Humanware refers to the skills, knowledge, and expertise of people operating the technology.​
Infoware means documented knowledge such as manuals, software, databases, and technical instructions.​
Orgaware refers to organisational systems, structures, policies, and management practices that support technology use.​
Management Technology involves techniques & tools used by managers to plan, organise, lead, & control activities effectively.
Management of Technology (MOT) is the process of planning, developing, acquiring, and using technology to achieve
organisational goals and competitive advantage.
Acquisitive Capability: Ability needed to acquire and use technology based on instruction and training provided by the
supplier. This is classified as a basic level capability.
Adaptive Capability: Ability to adapt existing technology. This is classified as intermediate level capability.
Innovative Capability: Ability to develop existing technology and create new technologies based on research
Marketing Capability: Ability for distributing, selling and servicing technological products
Investment Capability: Ability to analyse the feasibility of investments technology
Innovation is the successful application of new ideas, products, or processes in practice.​
Invention is the creation of a new idea, product, or method for the first time.​
Disruptive innovation is when a new, simple, and low-cost product or service changes the market and replaces existing
products or firms.
Associating Questioning Observing Networking Experimenting
1. Basic Research (Pure Research and Development) – Apple → New display technology
➭​ Focuses on the creation of new knowledge
➭​ The knowledge may be new to the firm, or completely new and previously unknown
➭​ Involves high risk and high potential rewards
➭​ May lead to new products and new ways of doing business
2. Applied Research (New Product Development) – Samsung → Foldable smartphone
➭​ Builds on the results of basic research and conducts applied research
➭​ Utilises the new knowledge developed by the basic research to create new products
➭​ Can change the firm’s strategic position in the industry, or improve its future competitive position
3. Systems Integration (Product Improvement or Market Expansion) – Pran → New food packaging
➭​ Focuses on improving existing products, or entering new markets with current products
➭​ Supports established business activities
➭​ Involves low risk and low reward
➭​ Not innovating can lead to strategic disadvantage
PROCESS INNOVATION: Focuses on improving how work is done in an organisation. Its main purpose is to increase:
efficiency and effectiveness.
INNOVATION PROCESS: It is the process which facilities innovation. The process of innovation involves search &
selection, exploration & synthesis, cycles of divergent thinking & convergence.
Strategy
Strategy is a long-term plan made to achieve goals and beat competitors.
Strategic Planning
Strategic planning is the process of deciding future goals and how to achieve them.
Strategic Management
Strategic management is planning, implementing, and controlling strategies to achieve organisational goals.
Technical Capabilities
Technical capabilities mean a firm’s ability to use technology, machines, and technical skills.
Market Capabilities
Market capabilities mean a firm’s ability to understand customers, sell products, and compete in the market.
Offensive Strategy
Offensive strategy is used to attack competitors to gain market share.
Defensive Strategies
Defensive strategies are used to protect market position from competitors.
Information Technology (IT)
IT means using computers, software, networks, and data to store, process, and share information.
Data Analytics
Data analytics means examining data to find useful information for decision making
TECHNOLOGY TRANSFER: The movement of technical knowledge from one organisation to another or from one purpose
to another.
Business Research: The application of scientific methods in searching for the truth about business phenomena.
Basic Business Research (Pure Research): Research conducted without a specific decision in mind that usually does
not address the needs of a specific organisation.
Applied Business Research: Research conducted to address a specific business decision for a specific firm or organisation
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Evaluation research is used to assess how well a strategy is performing and whether it is achieving its intended objectives.
Product orientation refers to a business approach where the main focus is on producing high-quality products, assuming that
customers will buy them because of their features.
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Market orientation refers to a business approach where the firm first identifies customer needs and wants and then designs
products or services to satisfy those needs.
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A business opportunity is a favourable condition that allows a firm to introduce a product or service and earn profit by
meeting customer demand.
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A business problem is a situation that creates difficulty for a business and prevents it from achieving its goals.
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Symptoms are the visible signs of a business problem, such as declining sales or increasing complaints, but they do not
represent the actual root cause.
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Total Quality Management is a management philosophy where all employees work continuously to improve product quality,
processes, and customer satisfaction.
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A research proposal is a written document that outlines what will be studied, why the study is important, and how the
research will be conducted.
POPULATION: Refers to the complete group of people, objects, or events that share common characteristics
SAMPLE: A small group selected from a larger population
SAMPLING: Refers to the process of selecting a smaller group, called a sample, from a larger population in order to study
that population efficiently.
PROBABILITY SAMPLING A Sampling method in which every member of the population has a known and equal chance
of being selected.
1. Simple Random Sampling: Each member of the population is assigned an unique identifier (like a number), and then a
random selection process (like a lottery) chooses the desired sample size.
2. Systematic Sampling: Every nth individual from a list is chosen, like, taking a sample of 100 from a list of 1000 &
picking every 10th name.
3. Stratified Sampling: Divides the population into subgroups (strata) based on relevant characteristics (like age, gender,
income). Then, a random sample is chosen from each strata proportional to their size in the overall population.
4. Cluster Sampling: Divides the population into groups (clusters) based on geography or some other criteria. Then, a
random sample of clusters is chosen, and all members within those clusters are included in the sample.
NON-PROBABILITY SAMPLING A sampling method where all the individuals of the population are not given an equal
opportunity of becoming a part of the sample
1. Convenience Sampling: Involves selecting the easiest or most accessible participants who are readily available.
2. Purposive Sampling (Judgmental Sampling): Researchers use their expertise to select participants with specific
characteristics relevant to the research question.
3. Snowball Sampling: Relies on existing participants to recruit others who share the desired characteristics.
4. Quota Sampling: Researchers set quotas for specific subgroups within the population (like age or gender) and then select
participants until those quotas are filled. This can be non-random, but ensures some level of representation in the sample.
HYPOTHESIS: A statement about a population parameter subject to verification.
HYPOTHESIS TESTING: A procedure based on sample evidence and probability theory to determine whether the
hypothesis is a reasonable statement.
NULL HYPOTHESIS: A statement about the value of a population parameter developed for the purpose of testing
numerical evidence.
ALTERNATE HYPOTHESIS: A statement that is accepted if the sample data provide sufficient evidence that the null
hypothesis is false.
Qualitative research focuses on understanding ideas, opinions, and reasons using non-numerical data.
Quantitative research focuses on numbers and measurements to analyse data statistically.
Ethnographic Research: A qualitative method where the researcher observes & studies people in their natural
environment
Document Analysis: Involves systematically reviewing and interpreting existing materials
Entrepreneurship is the process of identifying opportunities, taking risks, and starting a business to create value.
An entrepreneur is a person who starts, manages, and takes the risk of a business
Corporate Entrepreneurship – Entrepreneurship practiced inside an existing organisation.
An intrapreneur is an employee who behaves like an entrepreneur within a company.
●​ Idea: A general thought or concept.
●​ Opportunity: A viable, market-based idea that can generate profit.
●​ All opportunities start as ideas, but not all ideas become opportunities.
Window of Opportunity – The limited time period during which an opportunity can be successfully exploited.
12. Brainstorming – A group creativity technique to generate many ideas.
15. Feasibility Analysis Determines whether a business idea is practical and viable.
Types of Feasibility Analysis:
1.​ Market Feasibility – demand and target customers
2.​ Organisational Feasibility – management skills and resources
3.​ Financial Feasibility – costs, profits, and funding
18. Business Plan – A written document describing business goals and how to achieve them.
Creative Destruction – New innovations replace old products, services, or businesses.
Anthropological Research – Observing people in real-life situations to find unmet needs.
Gumshoe Research – Simple research by talking directly to customers and sellers.
Barringer/Ireland Business Model – A structured framework to explain how a business creates and delivers value.
1.​ Core Strategy: The business's mission, basis for competitive advantage (cost or differentiation), and target market.
2.​ Strategic Resources: The company's core competencies and key assets that enable the strategy.
3.​ Partnership Network: The key suppliers and partners that reduce risk and leverage resources.
4.​ Customer Interface: How the company interacts with customers—their target segments, fulfillment & support, and
pricing model.
Porter’s Five Forces Model – Tool to analyse industry competition and profitability.
➭​ Threat of New Entrants – How easy is it for new competitors to enter the market?
➭​ Bargaining Power of Suppliers – How much control do suppliers have over prices?
➭​ Bargaining Power of Buyers – How much control do customers have over prices?
➭​ Threat of Substitute Products/Services – Can customers easily switch to alternatives?
➭​ Rivalry Among Existing Competitors – How intense is the competition between current players
Guerrilla Marketing – Low-cost, creative marketing using surprise and creativity.
Commercial Bank – A bank that provides services like deposits, loans, and credit mainly to individuals and businesses.
Scheduled Bank – A bank listed in the central bank’s schedule and regulated under banking laws.
Non-Scheduled Bank – A bank not listed in the central bank’s schedule and having limited banking operations.
Bank Failure – A situation where a bank cannot pay its debt and becomes insolvent.
Advance – Short-term credit provided by a bank to meet immediate financial needs.
Cash Credit – A facility where a bank allows a borrower to withdraw money up to an approved limit.
Overdraft – A facility that allows customers to withdraw more money than they have in their account.
Purchase and Discounting of Bills of Exchange – A service where a bank buys bills before maturity at a discounted
value and pays the holder immediately.
A. Banking: Basic Concepts
1. Meaning of a Bank
A bank is a financial institution that accepts deposits, gives loans, and facilitates payments.
2. Functions of Commercial Banks
Primary functions:
●​ Accepting deposits
●​ Giving loans and advances
Secondary functions:
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Money transfer
ATM services
Cheque clearing
Online banking
Safe custody of valuables
3. Types of Bank Deposits
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Savings Deposit – For individuals; earns interest
Current Deposit – For businesses; usually no interest
Fixed Deposit (FD) – Money kept for a fixed time; higher interest
Recurring Deposit (RD) – Fixed amount deposited regularly
6. Central Bank
Main functions:
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Issue currency
Control credit
Act as banker’s bank
Control inflation
7. Cheques and Negotiable Instruments
●​ Cheque
●​ Bill of exchange
●​ Promissory note
B. Insurance: Basic Concepts
Financial Risks: Risks where potential losses can be measured in monetary terms. – INSURABLE
Non-Financial Risks: Risks where outcomes cannot be measured in monetary terms. – UNINSURABLE
Pure Risks: Risks with only two outcomes: loss or at best a break-even situation. – INSURABLE​
Speculative Risks: Risks with three outcomes: profit, loss, or break-even, although the intent is to make a profit and no loss
but loss might arise. – UNINSURABLE
Fundamental Risks: Large-scale risks beyond individual or group of individual’s control. Natural/man-made disasters felt
by a huge number of the population. – INSURABLE
Particular Risks: Smaller-scale risks caused by an individual or group of individual’s actions/negligence. Risks of personal
nature. – INSURABLE
1. Meaning of Insurance
Insurance is a contract in which one party promises to compensate another for financial loss in exchange for a premium.
2. Parties to an Insurance Contract
●​ Insurer – Insurance company
●​ Insured – Person who takes insurance
●​ Policyholder – Owner of the policy
3. Key Insurance Terms
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Premium – Amount paid for insurance
Policy – Written insurance contract
Risk – Possibility of loss
Claim – Request for compensation
Sum assured – Amount paid on loss
4. Types of Insurance
Life Insurance:
●​ Whole life policy
●​ Term life policy
●​ Endowment policy
General Insurance:
●​ Fire insurance
●​ Marine insurance
●​ Health insurance
●​ Motor insurance
5. Principles of Insurance
1. Principle of Insurable Interest
2. Principle of Utmost Good Faith
3. Principle of Indemnity
4. Principle of Subrogation
5. Principle of Warranties
6. Principle of Proximate Cause
6. Importance of Insurance
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Reduces financial risk
Provides security
Encourages saving
Supports business stability
Operations Management
Operations Management is the planning and control of activities that produce goods or services efficiently.
Supply Chain Management
Supply Chain Management is managing the flow of materials, information, and products from suppliers to customers.
Cost Leadership Strategy
Cost Leadership Strategy means becoming the lowest-cost producer in the industry while maintaining acceptable quality.
Differentiation Strategy
Differentiation Strategy means offering products or services that are unique and valued by customers.
Responsive Supply Chain Strategy
Responsive Supply Chain Strategy focuses on quickly responding to customer demand and market changes.
Vertical Integration Strategy
Vertical Integration Strategy means a company controls more stages of production or distribution itself.
Scale Economies (Economies of Scale)
Scale Economies occur when the cost per unit decreases as production volume increases.
Slack
Slack is extra resources or capacity kept to handle uncertainty or unexpected situations.
Just-In-Time (JIT)
Just-In-Time (JIT) is a system where materials are received only when needed to reduce inventory and waste.
Difference Between Supply Chain and Logistics
●​ Supply Chain: Covers the entire network from suppliers to customers
●​ Logistics: Focuses on transportation, warehousing, and distribution
Importance of SCM
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Reduces cost
Improves efficiency
Enhances customer satisfaction
Creates competitive advantage
Sourcing – Finding and selecting suppliers based on quality, price, and delivery terms.
Procurement – Acquiring goods and services through purchasing, contracts, and supplier management.
Inventory Management – Balancing stock levels to avoid shortages or overstocking
Total Cost of Ownership (TCO) – Evaluating full costs beyond the purchase price.
Supply Chain Drivers
Supply chain drivers are the key factors that directly influence the effectiveness, efficiency, and overall performance of a
supply chain.
Supply Chain Obstacles
Supply chain obstacles are challenges that can disrupt the flow of goods and services from suppliers to customers
Inventory Costs: The expenses associated with purchasing, storing, managing, and handling inventory throughout the
supply chain
Human Resource Management (HRM) – Viva Basics
HR metrics are numbers used to measure how well the HR department is performing. Employee turnover
rate & Absenteeism rate
1. Human Resource Management (HRM)
HRM is the process of recruiting, developing, motivating, and managing employees to achieve organisational goals.
2. Objectives of HRM
The main objectives are to use employees efficiently, increase productivity, maintain employee satisfaction, and support
organisational success.
3. Functions of HRM
HRM functions include planning, recruitment, training, performance appraisal, compensation, and employee relations.
4. Human Resource Planning (HRP)
HRP is the process of forecasting future employee needs and ensuring the right number of people are available at the right
time.
5. Job Analysis
Job analysis is the systematic study of a job to identify its tasks, responsibilities, skills, and working conditions.
6. Job Description
A job description is a written statement of job duties, responsibilities, and authority.
7. Job Specification
Job specification lists the qualifications, skills, education, and experience required to perform a job.
8. Recruitment
Recruitment is the process of attracting qualified candidates to apply for job vacancies.
9. Selection
Selection is the process of choosing the most suitable candidate from the applicants.
10. Training
Training is a short-term learning process that improves employees’ job-related skills and knowledge.
11. Development
Development is a long-term process that prepares employees for future roles and responsibilities.
12. Performance Appraisal
Performance appraisal is the systematic evaluation of an employee’s job performance.
13. Compensation
Compensation refers to wages, salaries, incentives, and benefits provided to employees for their work.
14. Motivation
Motivation is the process of encouraging employees to work enthusiastically to achieve organisational goals.
15. Employee Welfare
Employee welfare includes facilities and services provided to improve employees’ well-being and job satisfaction.
21. Absenteeism
Absenteeism means the habitual absence of employees from work without valid reasons.
22. Employee Turnover
Employee turnover refers to the rate at which employees leave an organisation.
24. Human Capital
Human capital refers to the knowledge, skills, and abilities of employees that add value to the organisation.
25. Strategic HRM
Strategic HRM is the alignment of HR policies with organisational strategy to gain competitive advantage.
Management Information System (MIS): Viva Basics
1. Meaning of MIS
●​ Management Information System (MIS) is a system that collects, processes, stores, and provides information to
help managers make decisions.
2. Objectives of MIS
●​ To support planning, decision-making, and control
●​ To provide accurate, timely, and relevant information
●​ To improve managerial efficiency and effectiveness
3. Components of MIS
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2.​
3.​
4.​
5.​
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People – managers, employees, IT staff
Hardware – computers, servers, input/output devices
Software – operating systems, application software
Data – raw facts used for processing
Network – internet, intranet, communication systems
Procedures – rules and methods for using the system
4. Data vs Information
●​ Data: Raw facts (e.g., sales figures)
●​ Information: Processed data that is meaningful (e.g., monthly sales report)
5. Levels of Management and MIS Support
1.​ Top-level management
○​ Strategic decisions
○​ Uses Strategic Information Systems information systems that help an organisation achieve long-term
goals and gain competitive advantage.
2.​ Middle-level management
○​ Tactical decisions
○​ Uses Management Information Systems
3.​ Lower-level management
○​ Operational decisions
○​ Uses Transaction Processing Systems (TPS)
6. Types of Information Systems
●​ DSS (Decision Support System) – Helps with complex and non-routine decisions
●​ EIS / ESS (Executive Information System) – Supports top executives with summary information
●​ OAS (Office Automation System) – Supports office work (email, word processing)
11. Advantages of MIS
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Better decision-making
Improved efficiency
Faster access to information
Better planning and control
12. Limitations of MIS
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High initial cost
Depends on data accuracy
Cannot replace managerial judgement
Resistance from employees
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1. Enterprise Software
●​ Enterprise software is large-scale software used by organisations to manage and combine core business activities
such as finance, HR, production, and sales.
2. Customer Relationship Management (CRM) Systems
●​ CRM systems are software systems that help organisations manage customer data, improve customer service to
enhance customer satisfaction and retention.
3. TPS (Transaction Processing System)
●​ TPS is a system that records and processes daily routine transactions such as sales, purchases, payroll, and inventory
updates.
Cost Accounting
Cost accounting is the system used to find, record, and control costs of products or services.
2. Management Accounting
Management accounting provides financial information to managers to help them make informed decisions.
3. Relationship among Accounting Types
●​ Financial Accounting → prepared for outsiders (owners, government).
●​ Cost Accounting → focuses on product and service costs.
●​ Management Accounting → uses cost data for decision making.
4. Cost Classification
Costs are grouped based on purpose, such as:
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Direct cost: directly related to production (raw material).
Indirect cost: not directly related (factory rent).
Fixed cost: does not change with output.
Variable cost: changes with output.
5. Cost Behaviour
Cost behaviour shows how costs change when activity level changes (fixed, variable, semi-variable).
6. Cost Sheet
A cost sheet is a statement that shows the total cost of producing goods, including material, labour, and overhead.
7. Cost of Goods Manufactured (COGM)
COGM is the total cost of goods completed during a period.
8. Cost of Goods Sold (COGS)
COGS is the cost of goods actually sold during the period.
9. Cost–Volume–Profit (CVP) Analysis
CVP analysis studies the relationship between cost, sales volume, and profit.
10. Break-Even Point
Break-even point is the level of sales where total cost equals total revenue, so no profit and no loss.
11. Variable Costing
Variable costing includes only variable costs in product cost. Fixed costs are treated as period costs.
12. Absorption Costing
Absorption costing includes both variable and fixed costs in product cost.
13. Difference between Variable and Absorption Costing
The difference is how fixed manufacturing cost is treated, which causes different profit figures.
14. Activity-Based Costing (ABC)
ABC allocates overhead costs based on activities that actually use resources, making cost information more accurate.
15. Budget
A budget is a future plan expressed in money for income and expenses.
16. Budgetary Control
Budgetary control compares actual results with budgeted figures to control costs.
17. Master Budget
A master budget is a complete set of all budgets prepared by an organisation.
18. Relevant Cost
Relevant cost is a future cost that changes because of a decision.
19. Make or Buy Decision
This decision helps management decide whether to produce internally or buy from outside.
20. Sell or Further Process Decision
This decision helps decide whether to sell a product now or process it further for higher profit.
Overhead cost means indirect costs that are necessary to run the business but cannot be directly linked to one
product.