ABC plc is a UK-based service company with a number of wholly owned subsidiaries and interests in associated companies throughout the world. In response to the rapid growth in the company, the Managing Director has ordered a review of the company's organisation structure, particularly the finance function. The Managing Director holds the opinion that a separate treasury department should be established. At present, treasury functions are the responsibility of the chief accountant.
Required
(a) Describe the main responsibilities of a treasury department in a company such as ABC plc and explain the benefits that might accrue from the establishment of a separate treasury function.
(b) Describe the advantages and disadvantages which might arise if the company established a separate treasury department as a profit centre rather than a cost centre.