November 2023

TUESDAY: 22 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE PRIME SOLUTIONS ASSOCIATES (PSA) Prime Solutions Associates (PSA) is a Kenyan company that specialises in providing consultancy services to organisations across various sectors, including private businesses, governments and nonprofit making institutions. Established in the year 2005, the company has steadily grown to become a trusted advisor for both public and private sector organisations in Kenya and the wider East African region. With a strong focus on delivering innovative and sustainable solutions, PSA has gained a reputation for its expertise in areas such as strategy development, governance, financial management, human resources and organisational transformation. The company was founded by Samuel Tai and Aisha Were, two visionary entrepreneurs who recognised the need for high-quality consulting services in the Kenyan market. Leveraging their expertise and networks, they assembled a team of highly skilled professionals with diverse backgrounds, enabling the company to provide holistic and tailored solutions to its clients. As a leading consulting firm in Kenya, PSA understands the importance of maintaining the highest standards of governance and boardroom dynamics. It recognises that effective governance structures, decision-making processes, stakeholder engagement, boardroom culture, talent management, board evaluations, among other boardroom dynamics are crucial for its own success and the success of its clients. By constantly refining its governance practices and investing in its board’s capabilities, PSA continues to uphold its position as a trusted advisor and a catalyst for positive change in the Kenyan business landscape. PSA has a well-defined governance structure in place. The company’s board consists of experienced professionals from diverse backgrounds, including finance, law and management. PSA believes in the philosophy of a diverse board to help it become even more successful. The board is responsible for setting strategic objectives, overseeing performance and ensuring compliance with legal and regulatory requirements. The firm embraces a unitary board model, where both executive and non-executive directors are involved in decision-making. The company adopts evidence-based approach in making resolutions. The board holds regular meetings to discuss key issues, review financial performance and make important decisions. The CEO presents proposals and recommendations, which are critically evaluated by the board members. Transparent communication and open dialogue allow for informed decision-making, ensuring that the interests of both the company and its stakeholders are considered. PSA recognises the importance of engaging with stakeholders to understand their perspectives and address their concerns effectively. The board maintains active communication channels with shareholders, employees, clients, and the community. It organises annual general meetings, investor presentations and regular stakeholder consultations. These interactions facilitate meaningful discussions on the company’s performance, future plans, and social responsibilities, fostering trust and accountability. A healthy boardroom culture is critical for effective governance. At PSA, the board emphasises professionalism, integrity, and diversity. Respectful and inclusive interactions create an environment where every member feels valued and comfortable expressing their opinions. The board encourages constructive debates and welcomes dissenting viewpoints, fostering a culture of critical thinking and innovation. This inclusive culture contributes to better decision-making and the overall success of the company. The company understands the significance of talent management in driving organisational growth. The board plays a vital role in overseeing talent acquisition, development and retention. It collaborates closely with the CEO and human resources department to identify key competencies required for board membership and executive positions. Emotional intelligence is highly valued as a critical skill for the board members. Transparent and merit-based selection processes ensure that qualified individuals with diverse skill sets are appointed. Regular performance evaluations and development programs help board members enhance their skills and stay updated with industry trends. Regular board evaluations are conducted at PSA to assess board effectiveness and identify areas for improvement. The evaluation process involves self- assessments by individual board members and collective assessments of the board’s overall performance. Key areas evaluated include board composition, governance practices, decision-making processes, and stakeholder engagement. Feedback from the evaluations is used to develop action plans for enhancing board effectiveness and addressing any identified shortcomings. The company demonstrates a strong commitment to sound boardroom dynamics. It’s collaborative approach to decision- making, active engagement with stakeholders, and emphasis on diversity and inclusion contribute to its success. By continuously evaluating its board’s performance and implementing improvement measures, PSA ensures its governance practices remain aligned with the company’s goals and the interests of its stakeholders. Required: 1. Explain FIVE components of the intelligence that is highly valued as a critical skill for the board members at PSA. (10 marks) 2. PSA adopts a certain approach in making resolutions. Discuss FIVE steps involved in this approach. (10 marks) 3. Examine FIVE ways through which PSA could attain the philosophy it believes in, to help it become more successful. (10 marks) 4. Assess FIVE benefits of the board model embraced by PSA. (10 marks) (Total: 40 marks)   QUESTION TWO 1. ABC limited intends to manage change through a power-based approach. Identify FIVE challenges associated with the above approach. (5 marks) 2. Discuss FIVE roles of a corporate secretary with regards to being a board consultant. (10 marks) (Total: 15 marks)   QUESTION THREE 1. Assess FOUR ethical dilemmas governance professionals face in influencing boardroom dynamics. (4 marks) 2. COVID 19 accelerated the uptake of virtual boards by companies to cater for remote teams. Outline FIVE benefits these boards enjoy. (5 marks) 3.  Summarise SIX contributions of a corporate secretary with regards to effective talent management in an organisation. (6 marks) (Total: 15 marks)   QUESTION FOUR 1. The CEO of Buda Ltd. emphasises the need for organisations to have a deep understanding of board diversity. Explain FIVE reasons for this. (5 marks) 2. ABC limited is developing behavioural agility in their organisation. Describe FIVE strategies to achieve this. (10 marks) (Total: 15 marks)   QUESTION FIVE 1. John Taker is a director at Top Mark Limited. Explain FIVE methods that could be used to

TUESDAY: 22 August 2023. Morning Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE DUNKEN DOYLES COM (DDC) Dunken Doyles Com (DDC) is a telecommunications company based in Kenya that has established itself as a leader in the industry. Founded in 1995, DDC has undergone tremendous transformation from one hundred employees to the current over two thousand . As of December 2022, the company had a total customer base of over 40 million subscribers, which included both mobile and fixed-line customers. The company has consistently recorded significant revenue growth over the years. In the financial year 2021-2022, the company reported a total revenue of approximately Sh.192 billion, representing an increase of 10 % compared to the previous year. The company has maintained a strong financial position, demonstrating consistent profitability. In the financial year 2021-2022, the company reported a net profit of approximately Sh. 54.7 billion, marking a 58% increase compared to the previous year. The company offers a diverse range of telecommunications services to its customers. Its mobile services encompass voice calls, SMS messaging, mobile internet, and mobile data. With the largest mobile network in Kenya, the company provides extensive coverage across the country, ensuring reliable and accessible connectivity for its users. In addition to mobile services, DDC also offers fixed-line services such as broadband internet, corporate connectivity solutions, and fiber optic infrastructure. To sustain this exponential growth, the CEO, John Kolt has emphasised the importance of compliance with good corporate governance practices as well as legal and regulatory compliance. The company had previously established some governance and compliance practices, but there were concerns regarding their effectiveness and potential gaps in the existing framework. John Kolt contracted BGM auditors to conduct a governance and compliance audit and give recommendations for improvement. This assurance engagement was intended to further boost the confidence of shareholders in the company. The objectives of the audit were to assess the effectiveness of governance and compliance practices, identify areas of non-compliance and recommend improvements. The scope of the audit encompassed all departments, processes, and systems within DDC that were relevant to governance and compliance. To ensure a structured and systematic approach, BGM formulated a detailed audit plan. The plan outlined the activities, timelines, and allocation of resources required for the audit. It also involved engaging with key stakeholders, including department heads, legal counsels, and compliance officers, to gather insights and ensure their cooperation throughout the audit process. While briefing his team, Mark West, the lead auditor, emphasised the importance of documentation in the entire audit process. To collect data, BMG commenced the audit by conducting interviews with key personnel across various departments. This is after meticulous audit sampling by the team. These interviews provided valuable insights into existing practices, potential challenges, and areas requiring improvement. To triangulate the findings, the audit team reviewed documentation, policies, and procedures to evaluate their alignment with relevant laws, regulations, and industry standards. Internal controls and risk management processes were assessed to determine their effectiveness in mitigating compliance risks. The audit revealed that governance and compliance structures were strong at DDC but a few weaknesses were also identified within DDC’s governance and compliance framework. The audit revealed inconsistencies in policy implementation, inadequate training programmes, and insufficient monitoring mechanisms. Non-compliance with certain regulations was also identified. A number of legal risks were also identified and based on these findings, the audit team developed a set of recommendations aimed at improving governance and compliance practices. DDC understood the importance of addressing the identified issues promptly. A comprehensive action plan was formulated to address the weaknesses and deficiencies highlighted in the audit. The plan included specific actions, assigned responsibilities, and defined timelines for implementation. The company also allocated additional resources to support the implementation of corrective measures. To ensure the sustainability of the improvements made, DDC implemented periodic reviews to assess the effectiveness of the corrective actions. These reviews aimed to evaluate whether the recommended changes were successfully implemented and if they addressed the identified weaknesses. BMG auditors also advised DDC to ensure that monitoring of governance and compliance practices becomes an integral part of the company’s culture. Required: 1. Explain FIVE risks that BMG auditors may have identified while conducting the governance and compliance audit at DDC. (10 marks) 2. While briefing his team, Mark West, the lead auditor, emphasised the importance of documentation in the audit process. Assess FIVE factors to consider during audit documentation. (10 marks) 3. Discuss FIVE merits of the method used to collect data from key personnel across various departments at DDC. (10 marks) 4. Analyse FIVE elements of the governance and compliance audit engagement that was intended to further boost the confidence of shareholders at DDC. (10 marks) (Total: 40 marks)   QUESTION TWO 1. Rob Pili is conducting a computerised governance audit for a client. Identify SEVEN challenges he is likely to encounter during this exercise. (7 marks) 2. Walter Tight is a highly regarded auditor due to his professional skepticism. Describe FOUR attributes of professional skepticism. (8 marks) (Total: 15 marks)   QUESTION THREE 1. The purpose of the governance audit is to ensure that the organisation conforms to the highest standards of good governance. Analyse FOUR parameters covered in this audit. (4 marks) 2. Discuss FIVE factors that a client could consider before awarding a governance and compliance contract to a prospective firm. (5 marks) 3. Assess SIX elements that could be addressed by a governance audit consultancy firm`s system of quality control. (6 marks) (Total: 15 marks)   QUESTION FOUR 1. XYZ Governance Auditors has just submitted a report to Jiji Sellers after conducting a governance audit. Identify SEVEN the users of this report. (7 marks) 2. Evaluate FOUR roles of the board in the implementation of governance audit recommendations. (8 marks) (Total: 15 marks)   QUESTION FIVE 1. Explain FIVE elements of subsequent events in post-governance and compliance audit activities.

MONDAY: 21 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Show ALL your workings. Do NOT write anything on this paper. QUESTION ONE 1. Explain THREE financing decisions made by the Board and management in an organisation. (6 marks) 2. Describe THREE benefits that may accrue to a firm from preparing a cash flow statement. (6 marks) 3. Texa Limited practices a strict residual dividend policy. It maintains a capital structure of 60% debt and 40% equity. Earnings for the year are Sh.10,000,000. Required: Using the debt ratio, determine the maximum amount of capital expenditure possible without selling new equity. (3 marks) Suppose that the planned investment outlay for the coming year is Sh.20,000,000, evaluate whether the company will pay a dividend. (5 marks) (Total: 20 marks)   QUESTION TWO 1. Summarise FOUR users of financial statements, citing the information need. (4 marks) 2. Describe THREE internal factors that could influence financing decisions in an organisation. (6 marks) 3. The following information was extracted from the financial statements of Kwekwe Ltd. for the year ended 31 December 2022: Required: Calculate the following for the year ended 30 December 2022: Accounts receivable. (2 marks) Current assets. (2 marks) Return on total assets as a percentage. (2 marks) Total shareholders equity. (2 marks) Quick ratio. (2 marks) (Total: 20 marks)   QUESTION THREE 1. Highlight FOUR objectives of accounting. (4 marks) 2. The following trial balance was extracted from the books of Sunlight Ltd. as at 31 March 2023: Additional information: 1. A building whose net book value was Sh.20 million as at 31 March 2023 was to be revalued to Sh.36 million. 2. The corporation tax for the year is estimated at Sh.10 million. 3. The directors have proposed a final dividend of 20% on the ordinary shares. 4. The directors have agreed to transfer Sh.2 million to capital redemption reserve fund. Required: Prepare statement of profit or loss for the year ended 31 March 2023. (6 marks) Statement of financial position as at 31 March 2023. (10 marks) (Total: 20 marks)   QUESTION FOUR 1. Enumerate FOUR causes of soft capital rationing as used in capital budgeting. (4 marks) 2. A company is considering undertaking a capital investment project that is expected to generate annual cash flows of Sh.1 million for 5 years. The cash flows shall grow at a rate of 5% per year. The cost of capital for the company is 10%. Required: Compute the present value of cash flows. (4 marks) 3. The following was the capital structure of Ushindi Ltd. as at 31 December 2022: Additional information: 1. The current market prices per share is Sh.25. The most recent dividend paid by the company is Sh.2.50. Dividends are expected to grow at an annual rate of 10% per year. 2. New preference shares will be issued at Sh.35 per share subject to a floatation cost of Sh.5 per share. 3. New debentures will be issued at Sh.1,200 per debenture with a discount of Sh.30 and floatation cost of Sh.30 per debenture. 4. Corporation tax rate is 30%. Required: The cost of ordinary share capital. (2 marks) The cost of preference share capital. (2 marks) The cost of debenture capital. (2 marks) The weighted average cost of capital (WACC) using market value weights. (6 marks) (Total: 20 marks)   QUESTION FIVE 1. Describe THREE red flags that could indicate that financial statements are of poor quality. (6 marks) 2. Explain the following theories of dividend: Information signalling theory. (2 marks) Tax differential theory. (2 marks) 3. The following are the forecasted assets and liabilities of Ngurue Limited as at 30 June 2024: Required: Determine the company’s budgeted net working capital requirement. (4 marks) 4. The following information was extracted from the financial statement of Usawa Ltd.: Required: Calculate the intrinsic value of a share under: Gordon’s growth model. (3 marks) Walter’s model. (3 marks) (Total: 20 marks)

MONDAY: 21 August 2023. Morning Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE MERCHANT BANK GROUP (MBG) Merchant Bank Group (MBG) was established in 1956 as a subsidiary of Trade Bank of Britain. It transformed into a savings and credit cooperative in 1989, and later became a fully-fledged commercial bank in 2015. Over the years, MBG has expanded its operations and developed a strong presence in Kenya and the East African region. The bank is regulated by the Central Bank of Kenya and was listed at the Nairobi Securities Exchange (NSE) in 2017. It has a diversified shareholder base, including institutional investors, individual shareholders and the Government of Kenya. MBG offers a wide range of banking products and services to cater for the needs of individuals, businesses and institutions. The bank had been growing exponentially until 2018 when it faced significant challenges due to the world economic recession. During the same period, Charles Kariuki retired as the CEO and Job Juma was hired in his place. Job Juma was a renowned strategic manager with extensive experience of turning around organisations. In the first two months of his engagement, he established that the bank was grappling with declining profitability as a result of inefficient operations and an outdated business model. He performed a SWOT analysis to get proper insights on how to return the bank to a growth trajectory. The analysis revealed, among other things, that the bank operated as a retail bank with limited geographic reach. This was of concern since it was hindering its ability to capitalise on emerging opportunities in the region. To overcome the challenges identified, MBG embarked on a strategic transformation journey under the stewardship of Job Juma. To actualise the journey, a 5-year strategic plan was launched after six months of meticulous planning and consultations with the stakeholders. The bank`s vision, mission and core values were revised to accommodate the volatility and ambiguity of the business environment. The bank`s vision statement was its mantra during the transformation period. The bank’s strategy also focused on four key pillars: operational excellence, customer-centricity, innovation, and geographic expansion. The bank began by streamlining its operations and improving efficiency by implementing robust technological systems and upgrading the IT infrastructure. Additionally, risk management practices were adopted to drive operational excellence. Customer-centric approach was another crucial aspect of MBG’s strategy. The bank conducted extensive market research to understand customer needs and preferences, and then introduced innovative products and services tailored to specific customer segments, including mobile banking, agency banking, and digital solutions. These initiatives enhanced customer experience, increased customer acquisition and retention, and strengthened MBG’s market position. Innovation played a significant role in MBG Group’s strategy. The bank embraced emerging technologies such as artificial intelligence and data analytics to drive product development, enhance service delivery and improve internal processes. MBG’s focus on innovation enabled it to stay ahead of the curve and deliver cutting-edge solutions to its customers. Geographic expansion was a critical element of MBG’s strategy. The bank strategically entered new markets within the East African region, leveraging its strong brand and expertise. The bank acquired and successfully integrated several banks in Rwanda, Tanzania, Uganda, Burundi and South Sudan. This expansion not only increased the bank’s market share but also diversified its revenue streams and helped it capitalise on the region’s economic growth and cross- border trade opportunities. The CEO`s strategic initiatives yielded significant results with the bank experiencing robust financial growth, with increased profitability and improved asset quality within two years. It expanded its customer base and market share thereby becoming one of the largest banks in East Africa by asset base. MBG’s total assets grew substantially, and its return on equity consistently outperformed industry benchmarks. The bank’s customer-centric approach led to enhanced customer satisfaction and loyalty. The bank’s innovative digital solutions, such as mobile banking and agency banking, provided convenient and accessible banking services to a broader customer base. The bank’s strong brand reputation, combined with its focus on customer experience, contributed to its competitive advantage. By venturing into new markets, the bank diversified its risk and revenue streams, reducing its dependence on the Kenyan market. MBG’s focus on operational excellence, customer-centricity, innovation, and geographic expansion played a pivotal role in its strategic turnaround. As of December 2022, MBG was the largest commercial bank in Kenya with assets of more than KES 566 billion and KES776 billion in customer deposits. The bank has 201 branches, 497 ATMs, and 20,273 registered Agents and Merchant outlets spread across the East African region. MBG has received numerous awards and recognitions for its performance, innovation, and contribution to the banking industry in Kenya and the region. It is also actively involved in various CSR initiatives, particularly in the areas of education, health, and environmental sustainability. The bank supports community projects and programs aimed at improving livelihoods and promoting social development. Required: 1. The CEO performed a certain analysis to get proper insights on how to return the bank back to a growth trajectory. Explain FOUR components of the analysis. (8 marks) 2. To actualise the strategic transformation journey, a particular plan was launched. Explain FIVE limitations of this plan. (10 marks) 3. Evaluate FIVE features of the bank`s mantra during the transformation period. (10 marks) 4. A geographic expansion was a critical element of MBG’s strategy. Analyse SIX strategies MBG adopted to achieve this. (12 marks) (Total: 40 marks)   QUESTION TWO 1. When conducting strategic change, organisations plan and implement changes to boost competitive advantage or achieve another significant objective. Appraise FIVE steps an organisation could take to realise this change. (5 marks) 2. Strategy implementation is a process that turns strategic plan into action by outlining the steps the organisation needs to take in order to achieve the set objectives. Summarise FIVE steps of the process an organisation could follow to make the implementation effective. (5 marks) 3.

TUESDAY: 22 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE 1. Outline FOUR characteristics of descriptive research. (4 marks) 2. Explain FIVE sources of research problems. (5 marks) 3. The managerial grid model was developed in the early 1960s by management theorists Robert Blake and Jane Mouton. Explain FIVE leadership styles according to these scholars. (5 marks) 4. A research plan provides an inventory of what must be done and which materials have to be collected. Evaluate SIX benefits of having a well-designed research plan. (6 marks) (Total: 20 marks)   QUESTION TWO 1. Type 1 errors, also known as false positives can occur in statistical hypothesis testing when the null hypothesis (H0) is incorrectly rejected. Explain FOUR sources of these errors. (4 marks) 2. Legal considerations are crucial in the field of consultancy to ensure compliance with applicable laws, protect clients’ interests, maintain professional ethics and manage potential risks. Evaluate FOUR legal matters that may need to be addressed. (4 marks) 3. While coaching can be a valuable and effective approach for personal and professional development, it has limitations. Describe FOUR of these limitations. (4 marks) 4. Sampling is the process of selecting a subset of individuals or items from a larger population. Analyse TWO differences between “systematic random sample” and “simple random sample”. (4 marks) 5. A questionnaire is designed to gather data or information from respondents. Outline FOUR qualities of a good questionnaire. (4 marks) (Total: 20 marks) QUESTION THREE 1. Research reports communicate the results of a research study to a specific audience and are the product of slow painstaking and accurate inductive work. Identify THREE steps involved in writing research reports. (3 marks) 2. Being an effective facilitator requires a combination of skills and qualities that enable you to guide group processes, foster collaboration and create a productive and inclusive environment. Summarise FIVE of these skills. (5 marks) 3.  In the first meeting of a consulting engagement, the primary focus is on establishing the foundation for the project and aligning it with expectations. Identify FIVE deliverables of this meeting. (5 marks) 4. In a consultancy assignment, a consultant provides expert advice, analysis and recommendations. Explain SEVEN factors that influence the scope of such an assignment. (7 marks) (Total: 20 marks)   QUESTION FOUR 1. Appraise FIVE advantages of utilising internal consultants. (5 marks) 2. Measures of variability quantify the extent to which data points in a dataset deviate from the central tendency. Explain FIVE such measures. (5 marks) 3. Action proposal outlines a specific course of action or solution to address a problem or achieve a particular objective. Summarise FIVE sections of an action proposal. (5 marks) 4. The specific purposes of consultancy may vary depending on the industry, client needs, and the consultant’s expertise, but all consultancies have common objectives. Identify FIVE of these objectives. (5 marks) (Total: 20 marks)   QUESTION FIVE 1. Process-consultation model is used by consultants to facilitate effective interventions and bring about positive change within organisations. Describe FOUR assumptions of this model. (4 marks) 2. In organisations, crises can arise from various sources. It is important for organisations to identify and understand potential sources so that they can effectively manage and mitigate them. Explain FIVE such sources. (5 marks) 3. Data presentation tools are used to effectively communicate the insights of data. Outline FIVE tools that can be used to achieve this purpose. (5 marks) 4. Outline THREE differences between “negotiation” and “persuasion”. (6 marks) (Total: 20 marks)

TUESDAY: 22 August 2023. Morning Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. KAZI NZURI LIMITED (KNL) Kazi Nzuri Limited (KNL) is a well-established Kenyan company operating in the telecommunications sector. The company was established in the year 1998 and its headquarters are based in Nairobi. KNL has four branches which are spread out across East Africa. The company has been listed on the securities exchange since year 2010. With a market presence spanning over two decades, the company has experienced substantial growth and has emerged as a key player in the industry. As a publicly listed company on the Nairobi Securities Exchange, KNL is subject to the regulatory requirements and guidelines set by the Capital Markets Authority (CMA) and the Code of Corporate Governance for Issuers of Securities to the Public. The company places a strong emphasis on board composition and independence to ensure effective corporate governance. The board consists of nine members, comprising a mix of executive and non- executive directors. The CEO and the Corporate Secretary also sit on the board. The non-executive directors bring diverse industry expertise and independence to the board. Additionally, the board includes a significant number of female directors, promoting gender diversity and inclusivity. To strengthen corporate governance, Kazi Nzuri Ltd. has established several board committees responsible for specific areas of oversight. These committees include the Audit Committee, Compensation Committee, Nomination Committee, and Corporate Social Responsibility (CSR) Committee. Each committee is composed of independent directors with relevant expertise and plays a crucial role in ensuring accountability, risk management, and ethical decision-making within the company. KNL recognises the importance of transparency and timely disclosure of information to shareholders and the public. The company maintains a comprehensive investor relations program, ensuring regular communication and updates on financial performance, strategic initiatives, and corporate governance practices. Furthermore, KNL publishes an annual sustainability report, highlighting its commitment to good corporate governance, ethical conduct, environmental sustainability and social responsibility. Ethics form a cornerstone of Kazi Nzuri Ltd’s operations with a strong commitment to ethical behaviour embedded in its corporate culture. The company has a well-defined code of conduct and ethics that outlines expectations for employees and stakeholders. The code emphasises on integrity, honesty, and fairness. Regular training programs are conducted to raise awareness of ethical practices and ensure compliance throughout the organisation. To encourage the reporting of unethical practices, KNL has implemented a robust whistleblower mechanism. Employees and stakeholders are provided with a secure and confidential channel to report any concerns, violations, or breaches of the company’s ethical standards. The company guarantees protection against retaliation for individuals who come forward with genuine concerns. Kazi Nzuri Ltd recognises its responsibility towards society and actively engages in CSR initiatives. The company invests in sustainable development projects, focusing on education, healthcare, and environmental conservation. Through partnerships with local communities and NGOs, the company contributes to the well-being of society, aligning its business practices with ethical and socially responsible objectives. KNL’s commitment to corporate governance and ethics is evident through its strong governance structure, independent board, transparent disclosure practices, and emphasis on ethical behaviour. By prioritising transparency, accountability, and responsible decision-making, the company sets a positive example for other East Africa-based companies. Through its continuous efforts to promote good governance and ethical conduct, KNL not only protects the interests of its stakeholders but also contributes to the sustainable growth and development of the East Africa business landscape. Required: 1. Kazi Nzuri Limited (KNL) conducts regular training programs to ensure compliance with regulatory requirements and industry standards. Discuss FIVE additional measures the company could adopt to ensure compliance. (10 marks) 2. KNL has implemented a robust whistle blowing mechanism. Examine FIVE mechanisms that Kazi Nzuri Ltd. could have put in place to encourage whistleblowing and the reporting of unethical practices by its employees and other stakeholders. (10 marks) 3. Appraise FIVE ways in which the company could monitor and assess risks against its defined risk appetite. (10 marks) 4. Assess FIVE corporate social responsibility (CSR) initiatives that could be undertaken by Kazi Nzuri Ltd. (10 marks) (Total: 40 marks)   QUESTION TWO 1. Stakeholder theory of corporate governance and ethics defines how managers should understand and treat the stakeholders so that stakeholders’ interests come above all other interests. With reference to the above statement, highlight FIVE principles of this theory. (5 marks) 2. The technical incompetence of Non-executive Directors has been identified as one of the key drivers for failure of organisations. Assess FIVE characteristics a company would consider when recruiting such directors. (5 marks) 3. Risk management is a key component of corporate governance as it helps to identify the possible future, and plan for negative possible effects either by transferring or mitigating them. From the above statement, highlight FIVE risk management areas that business managers should focus on. (5 marks) (Total: 15 marks)   QUESTION THREE 1. Explain FIVE statutory duties of a company’s board of directors. (5 marks) 2. According to good governance principles, a conflict of interest register needs to be maintained for all directors. Evaluate FIVE ways on how a director should handle potential conflicts. (5 marks) 3. Analyse FIVE reasons why compliance is important to a company. (5 marks) (Total: 15 marks)   QUESTION FOUR 1. There are several audits that a company engages in to have an independent assessment of its status. Evaluate FIVE objectives of legal and compliance audit (5 marks) 2. As a corporate governance and ethics consultant, give your advice on FIVE key issues to be covered during the training workshop of new board of directors. (5 marks) 3. List FIVE corporate governance codes in Kenya, which apply to specific sectors. (5 marks) (Total: 15 marks)   QUESTION FIVE 1. Every year, a Board needs to have an evaluation of its effectiveness carried out on the Chairman, individual Directors, and the Board as a whole. Discuss FIVE reasons why board assessments often reveal

WEDNESDAY: 23 August 2023. Afternoon Paper. Time Allowed: 3 hours Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE 1. Highlight FOUR limitations of raising capital in the Securities Exchange. (4 marks) 2. In terms of the financial system, in an increasingly technological and digital world, handling physical documents may hamper the functioning of securities trading and broking. The move to dematerialisation is in line with the global move of all systems to go online and transact via smart devices. With reference to the above statement: Explain the term “De-materialisation” of securities. (2 marks) Summarise SIX benefits of a dematerialised account to an investor. (6 marks) 3. Capital markets have continued to support access to resources for business development. Discuss FOUR challenges that may hinder the development of an effective Capital market in your country. (8 marks) (Total: 20 marks)   QUESTION TWO 1. The term “frontier markets” was coined in 1992 by Farida Khambata. Outline FIVE characteristics of these markets. (5 marks) 2. Describe the term “insider trading” as used in the securities exchange. (2 marks) Outline THREE effects of insider trading. (3 marks) Explain TWO categories of insider trading. (2 marks) 3. Explain FOUR roles of Unclaimed Financial Assets Authority (UFAA). (8 marks) (Total: 20 marks)   QUESTION THREE 1. Identify THREE roles of regulatory sandbox in financial service. (3 marks) 2. Companies that are expanding operations may use internally generated or external funding from the capital markets. Outline FOUR benefits that would accrue to companies from listing in the securities exchange. (4 marks) 3. Summarise FIVE functions of money markets in the development of financial systems of your country. (5 marks) 4. Explain FOUR hypothesis of Initial Public Offering (IPO) in the securities market of your country. (8 marks) (Total: 20 marks)   QUESTION FOUR 1. Most jurisdictions have implemented Central Depository Systems (CDS) to transact and transfer shares between parties. Identify FOUR challenges that may affect the effective implementation of CDS in your jurisdiction. (4 marks) 2. Explain THREE benefits of holding shares in the Direct Registration system (DRS) in the securities exchange market. (6 marks) 3. The Securities Exchange in many countries has experienced low rate of listing of companies over time. Analyse FIVE factors that could have contributed to the low rate of listing. (10 marks) (Total: 20 marks)   QUESTION FIVE 1. Yefwe Self Help Group intends to register a Deposit Taking Sacco. Explain FIVE good governance practices that it must adhere to for it to be compliant with SACCO Society Regulatory Authority (SASRA) regulations. (10 marks) 2. The International Organisation of Securities Commissions(IOSCO) is an association of organisations that regulate the world’s securities and futures markets. With reference to the above statement: Highlight TWO objectives of the IOSCO Principles of Self-Regulation. (2 marks) Analyse FOUR risks faced by depository institutions when generating spread income. (8 marks) (Total: 20 marks)

WEDNESDAY: 23 August 2023. Morning Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE 1. During meetings, claims against defamation may arise. To avoid liability or reduce damages, a defendant may need to apply some defenses. Identify FIVE such defenses. (5 marks) 2. A new company, ABC Ltd., was recently registered and has started operations without the services of a corporate secretary. As a consultant, advise ABC Ltd. on FIVE roles of the secretary as per the governance standards and guidelines. (5 marks) 3. Requirements for the circulation of resolutions in a members’ meeting can vary with jurisdiction and the specific company’s constitution or articles of association. Outline FIVE requirements for such circulation of resolutions. (5 marks) 4. Jobbys Ltd. has put in place a dividend policy that sets out the parameters and circumstances that will be considered by the Board of Directors in determining the distribution of dividend to its shareholders or retaining profits earned by the Company. In view of the above statement, identify FIVE circumstances when the Board may deviate from this policy and restrict dividend distribution to its shareholders. (5 marks) (Total: 20 marks)   QUESTION TWO 1. List FOUR conditions that would invalidate proceedings of a meeting. (4 marks) 2. Analyse THREE legal instruments governing virtual meetings. (6 marks) 3. Public limited liability companies are by law required to hold annual general meetings. Discuss FIVE compliance requirements according to the Companies Act 2015. (10 marks) (Total: 20 marks)   QUESTION THREE 1. Integrated reporting is a process founded on integrated thinking for communicating an organisation’s agenda. Summarise FOUR benefits of integrated reporting as a holistic approach to corporate reporting. (4 marks) 2. Examine FOUR requirements for keeping records of County and National Assembly meetings as contained in various laws and regulations. (8 marks) 3. Describe FOUR stages of the evolution of the corporate secretarial profession in your country. (8 marks) (Total: 20 marks)   QUESTION FOUR 1. Identify FOUR agenda items of notices for general meetings. (4 marks) 2. Assess TWO benefits of a prospectus to an investor of shares listed at the Securities Exchange. (4 marks) 3. A certified secretary working in an international company may be required to ensure documents are authenticated and validated. Discuss THREE steps followed when authenticating documents for international use. (6 marks) 4. The idea behind committees of the board is to tap into the specific talents, skills and expertise of the individual board directors, to inform and educate the full board on particular areas of concern. Explain THREE benefits of these committees in execution of Board agenda. (6 marks) (Total: 20 marks)   QUESTION FIVE 1. Memorandum of association is one of the prerequisite documents that is prepared by promoters to set up a company. Explain the process involved in altering the memorandum of association. (5 marks) 2. Identify SEVEN legal requirements that have to be met for minutes of a company to be admissible in a court of law. (7 marks) 3. Parliament is the legislative assembly of political representatives of a given country. One of its roles is to debate and make laws which are passed by majority vote. In view of the above statement, discuss FOUR voting methods used in Parliament. (8 marks) (Total: 20 marks)

THURSDAY: 24 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper. QUESTION ONE 1. With regards to handling conflicts between County Governments and the National Government: Identify TWO legal instruments which provide on how to resolve conflicts. (2 marks) Explain TWO ways of handling conflicts. (2 marks) 2. Getting the most from stakeholder engagement is crucial for effective policy development and implementation. Summarise FIVE strategies that could help optimise stakeholder engagement. (5 marks) 3. Analyse FIVE ways in which private corporations could forge corporate relationships with the National Government. (5 marks) 4. Explain THREE distinctions between public administration and politics. (6 marks) (Total: 20 marks)   QUESTION TWO 1. The Public Procurement and Asset Disposal Act provides procedures for efficient public procurement. Outline FIVE areas covered under this Act. (5 marks) 2. Identify FIVE actors involved in the formulation of public policies. (5 marks) 3. Policy analysis models are frameworks used to assess and evaluate public policies. With reference to the above statement, explain FIVE of these models. (10 marks) (Total: 20 marks)   QUESTION THREE 1. Explain TWO functions of the office of the controller of budget in your country. (2 marks) 2. Identify FOUR challenges facing parastatals in your country. (4 marks) 3. Assess SIX weaknesses in budget making process in your country. (6 marks) 4. Highlight EIGHT powers of the County Public Service Board with regards to values, principles and good governance. (8 marks) (Total: 20 marks)   QUESTION FOUR 1. Analyse FIVE components of the legal framework that govern the operations of state corporations. (5 marks) 2. Certified Secretaries play an important role in the management of government organisations. In relation to the above statement, highlight SEVEN of these roles. (7 marks) 3. Proposed by Sherry Arnstein in 1969, the Ladder of Citizen Participation is one of the most widely referenced and influential models in the field of democratic public participation. Identify EIGHT principles of the rationale for public participation. (8 marks) (Total: 20 marks)   QUESTION FIVE 1. Explain FOUR characteristics associated with value-based leadership. (4 marks) 2. Identify SIX components of a county integrated development plan as stipulated by the County Governments Act of 2012. (6 marks) 3.  Features of administrative systems can vary depending on the context and purpose. Required: Discuss FIVE features of these systems. (10 marks) (Total: 20 marks)

WEDNESDAY: 23 August 2023. Morning Paper. Time Allowed: 3 hours. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper. QUESTION ONE 1. Non-monetary rewards are an integral part of employee motivation. Summarise FIVE forms of non-monetary incentives given to employees. (5 marks) 2. There are many ways for an employee and an employer to discontinue their working relationship. Separation may be initiated by the employee or by the employer. With reference to the above statement, highlight FIVE ways through which an employee can separate from the employer. (5 marks) 3. Discuss FIVE factors which contribute to differences in remuneration packages among staff in organisations. (10 marks) (Total: 20 marks)   QUESTION TWO 1. Evaluate THREE needs in Clayton Alderfer’s ERG theory of motivation that are summarised from Abraham Maslow’s hierarchy of needs. (6 marks) 2. A motivation system in an organisation is a management tool that encourages employees to adopt certain behaviours and practices. Analyse SEVEN features of a good motivation system in an organisation. (7 marks) 3. Employee retention is a critical aspect of maintaining a talented and engaged workforce. Highlight SEVEN strategies that an organisation may use to achieve this. (7 marks) (Total: 20 marks)   QUESTION THREE 1. In collective bargaining, various issues are addressed to establish terms and conditions of employment that are mutually agreed upon by employers and employees. Outline EIGHT such issues. (8 marks) 2. With respect to summary dismissal, identify SEVEN acts that may amount to gross misconduct. (7 marks) 3. Performing a gap analysis involves assessing the current state of a department with its employees’ performance and skills and comparing this state to the desired future state. Outline FIVE assessment tools that can be used to carry out a gap analysis. (5 marks) (Total: 20 marks)   QUESTION FOUR 1. Highlight FIVE challenges that employees encounter during job placement. (5 marks) 2. According to OECD (1999), performance contract is a range of management instruments used to define responsibilities and expectations between parties to achieve mutually agreed results. List FIVE benefits accruing to the Government of Kenya from implementing performance contracting in the public sector. (5 marks) 3. Discuss FIVE advantages of E-Recruitment method used by Human Resource Professionals in organisations. (10 marks) (Total: 20 marks)   QUESTION FIVE 1. Identify FOUR reasons why organisations offer welfare services to their employees. (4 marks) 2. Explain THREE benefits of using observation method to collect data during job analysis. (6 marks) 3. Koki Ltd. intends to introduce a new Human Resource Information System. Discuss FIVE challenges that the company may experience while introducing the system. (10 marks) (Total: 20 marks)   QUESTION SIX 1. Explain the term “work life balance”. (2 marks) Highlight THREE management strategies that could help in maintaining effective work life balance in an organisation. (3 marks) 2.  List FIVE benefits an organisation may achieve by conducting interviews virtually. (5 marks) 3. A position in Mamboleo Limited has just fallen vacant. Jonah Kemboi, the human resource manager is debating on whether to recruit internally or externally. Advise him on FIVE reasons why he should consider external recruitment. (10 marks) (Total: 20 marks)   QUESTION SEVEN 1. Today’s work environment requires employees to be skilled in performing complex tasks in an efficient, cost- effective and safe manner. Therefore, training is needed when employees are not performing up to a certain standard or at an expected level of performance. Identify FOUR methods of identifying employee training needs in an organisation. (4 marks) 2. Summarise SIX limitations of using selection tests as methods of employee selection. (6 marks) 3. Discuss FIVE assumptions of Douglas Mc Gregor’s theory in relation to managers’ view of workers in an organisation. (10 marks) (Total: 20 marks)

TUESDAY: 22 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Show ALL your workings. Any assumptions made must be clearly and concisely stated. Do NOT write anything on this paper. RATES OF TAX (Including wife’s employment, self-employment and professional income rates of tax). QUESTION ONE 1. Summarise the information needed by the following users of accounts: Shareholders. (2 marks) Governments. (2 marks) Employees. (2 marks) 2. Outline FOUR objectives of public sector financial statements and International Public Sector Accounting Standards (IPSASs). (4 marks) 3. The property, plant and equipment balances of Highken Ltd. comprised the following as at 1 January 2022: The company uses the straight line method of depreciation on assets as follows: • 10% per annum for plant and machinery • 20% per annum for motor vehicles Additional information: 1. It is the company’s policy to make a depreciation charge proportionate to the period of the asset. 2. An item of machinery bought on 1 July 2018 for Sh.10,080,000 was sold on April 2022 at Sh.6,000,000. 3. From the year ended 31 December 2022, the management of the company decided to charge depreciation on buildings at a rate of 2.5% per annum. The buildings were all completed on 1 July 2018. 4. On 1 January 2022, a vehicle purchased on 1 May 2018 for Sh.12,600,000 was traded in at a value of Sh.7,320,000 in part exchange for a new vehicle costing Sh.18,000,000. 5. Included in machinery is an old machine which originally cost Sh.13,500,000 and which was already fully depreciated and not expected to yield any material amount on either use or resale. 6. On 30 June 2022, a machine costing Sh.13,500,000 was purchased from Vector Ltd., and had been used for three years. Vector Ltd. had bought the machine at Sh.18,000,000. 7. Another machine costing Sh.10,500,000 was purchased on 1 August 2022. Required: Prepare a schedule showing the movement of property, plant and equipment for the year ended 31 December 2022. (10 marks) (Total: 20 marks)   QUESTION TWO 1. Explain TWO reasons why a firm should account for depreciation of its non-current assets. (4 marks) 2. The following balances were obtained from the financial records of Junior Enterprises, a sole trader business as at 30 April 2023: Additional information: 1. Depreciation is to be provided as follows: • Building 2% annually, straight line basis. • Plant and machinery, 15% per annum, reducing balance basis. • Motor vehicles, 25% annually, straight line basis. • Fixtures and fittings, 10% per annum, straight line basis. 2. Electricity and power accruing at 30 April 2023 amounted to Sh.120,000. 3. Prepaid insurance at 30 April 2023 was Sh.200,000. 4. Allowance for doubtful debts at 30 April 2023 was Sh.475,000. Required: Statement of profit or loss for the year ended 30 April 2023. (10 marks) Statement of financial position as at 30 April 2023. (6 marks) (Total: 20 marks)   QUESTION THREE 1. Describe THREE differences between “receipts and payments account” and “income and expenditure account”. (6 marks) 2. The following trial balance as at 30 June 2023 was extracted from the accounting records of Bungeh Limited, a public limited entity: Additional information: 1. Inventory at 30 June 2023 was valued at a cost of Sh.3,660,000. 2. Prepaid rent as at 30 June 2023 amounted to Sh.2,640,000. 3. Depreciation on non-current assets should be provided as follows: • Building at 2% per annum on cost. • Plant and equipment at 15% per annum on net book value. • Motor vehicles at 20% per annum on cost. 4. The corporate tax for the year ended 30 June 2023 is estimated at Sh.38,600,000. Required: Statement of profit or loss for the year ended 30 June 2023. (8 marks) Statement of financial position as at 30 June 2023. (6 marks) (Total: 20 marks)   QUESTION FOUR 1. Outline FOUR disadvantages of direct taxes in your country. (4 marks) 2. Explain the term “set off tax” as used in taxation. (2 marks) Discuss THREE causes of tax evasion in developing countries. (6 marks) 3. With regards to Customs and Excise Act, highlight FOUR types of goods which are subject to customs control. (4 marks) 4. Warren Korir is a commercial farmer. He incurred the following expenditure during the year ended 31 December 2022: Required: Compute his farmworks deductions for the year ended 31 December 2022. (4 marks) (Total: 20 marks)   QUESTION FIVE 1. Highlight FOUR circumstances under which duty paid on imported goods may be refundable. (4 marks) 2. State FOUR circumstances under which the commissioner of customs and excise duty may request for fresh securities. (4 marks) 3. Betalite PLC commenced its manufacturing operation on 1 January 2022 after incurring the following capital expenditures: Additional information: 1. Factory building include; an office Sh.280,000, showroom Sh.420,000, Godown Sh.800,000 and a retail shop Sh.300,000. 2. The processing machine costing Sh.4,200,000 was imported and the amount includes import duty and value added tax of Sh.400,000 and Sh.160,000 respectively which were waived by the government. 3. The borehole was sunk using money raised internally while the balance was borrowed from a bank amounting to Sh.1,000,000 which includes interest on bank loan of Sh.180,000. 4. The saloon car was disposed of for Sh.2,100,000 on December 2022. 5. The company constructed a canopy at the entrance of the factory building at a cost of Sh.570,000 which was completed and utilised from 1 November 2022. 6. Purchased a water pump at a cost of Sh.90,000 and a generator at a cost of Sh.120,000. Required: Compute the investment allowance due to Betalite PLC for the year ended 31 December 2022. (12 marks) (Total: 20 marks)

MONDAY: 21 August 2023. Afternoon Paper. Time Allowed: 3 hours. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper. QUESTION ONE 1. Outline SIX guidelines for drafting an effective memorandum. (6 marks) 2. Explain FOUR characteristics of active records. (4 marks) 3.  “Despite the popularity of online meetings, most organisations prefer face to face meetings”. Discuss FIVE reasons which make face to face meetings preferable to online meetings. (10 marks) (Total: 20 marks)   QUESTION TWO 1. Highlight SIX tips of holding an effective telephone conversation. (6 marks) 2. Explain FOUR characteristics of archived records. (4 marks) 3. Discuss FIVE benefits an organisation gains by using intranet. (10 marks) (Total: 20 marks)   QUESTION THREE 1. Summarise FOUR benefits of destruction as a method of records disposal. (4 marks) 2. Highlight FOUR guidelines to be followed when preparing a circular. (4 marks) 3. Explain FOUR non-verbal cues that a speaker could use to deliver an effective presentation. (4 marks) 4. Analyse FOUR reasons why team communication is important to business success. (8 marks) (Total: 20 marks)   QUESTION FOUR 1. State SIX objectives of writing minutes of a meeting. (6 marks) 2. Giving examples, distinguish between internal records and external records. (4 marks) 3. Communication noise is defined as anything that prevents a receiver from fully comprehending a message. In relation to the statement above, analyse FIVE types of communication noise that could interfere with effective decoding of a message. (10 marks) (Total: 20 marks)   QUESTION FIVE 1. Explain FOUR characteristics of a good press release. (4 marks) 2. Identify SIX ethical standards that might be maintained while preparing visual aids. (6 marks) 3. Discuss FIVE reasons why written communication is important to an organisation. (10 marks) (Total: 20 marks)   QUESTION SIX 1. State THREE benefits of transferring records that are not used regularly. (3 marks) 2. Outline FIVE contents of a resume. (5 marks) 3. Identify FOUR guidelines followed when installing filing equipment in an office. (4 marks) Describe FOUR measures that could be put in place while planning for an effective filing system. (8 marks) (Total: 20 marks)   QUESTION SEVEN 1. Describe THREE methods of delivering a speech. (6 marks) 2. Discuss THREE organisational factors that influence ethical dilemmas among employees. (6 marks) 3. Examine FOUR guidelines that could be followed to ensure confidentiality of records in an organisation. (8 marks) (Total: 20 marks)