Deck 4: Management Control, Accounting, and Its Rationaleconomic Assumptions

Question 1

Management control can best be described as:

A) A system of financial and management accounting
B) A balance between financial and non-financial performance measurement
C) The process of achieving organizational goals in a changing environment
D) A sophisticated computer system based on an organization's predictive model.

Answer 1

The process of achieving organizational goals in a changing environment

Question 2

Which of the following may be elements of a management control system:

A) Budgets, strategic plans, and performance measures
B) Incentives, targets, and information feedback loops
C) Supervision, recruitment, and socialization
D) All of the above.

Answer 2

All of the above.

Question 3

The process by which results are compared with plan, with variations leading to corrective action is termed:

A) Performance gap
B) Feedback
C) Feedforward
D) Budgeting

Answer 3

Feedback

Question 4

A cybernetic control system requires:

A) The ability to predict the effect of potential control actions
B) Previous time periods as a comparator
C) A thermostat
D) A communication network to transmit information.

Question 5

A predictive model is best described as:

A) The organization's budget for the year
B) The organization's strategy for the next 3-5 years
C) The action-outcome relationships to meet the organization's competition
D) The cause-effect relationships to meet the organization's strategy and competitive environment.

Question 6

Non-financial performance measures are more likely to be:

A) Leading indicators
B) Lagging indicators
C) Short-term indicators
D) Long-term indicators.

Question 7

The four perspectives in Kaplan & Norton's Balanced Scorecard are:

A) Financial, customer, strategic, operations
B) Strategic, customer, financial, non-financial
C) Financial, customer, business process, learning and growth
D) Financial, business process, quality, delivery.

Question 8

Kaplan & Norton suggested that the number of high level performance measures that managers should include in their Balanced Scorecard should be:

A) Four
B) 12-16
C) Hundreds
D) No number specified.

Question 9

One of the criticisms of the Balanced Scorecard approach is the:

A) Absence of unambiguous organizational goals
B) Ability to accurately measure non-financial performance
C) Assumption of accurate cause-effect relationships
D) Number of performance measures to be monitored

Question 10

A strategy map for an organization would include:

A) The cause-effect relationships and performance targets for each element in the strategy map
B) Ongoing monitoring and review of performance
C) Resource reallocations through changed budgets where performance does not meet expectations
D) All of the above

Question 11

The main difference between Kaplan and Norton's Balanced Scorecard and Cranfield University's Performance Prism is the inclusion in the Performance Prism of:

A) Stability
B) Shareholders
C) Stakeholders
D) Learning.

Question 12

The main difference between operational and strategic performance measures is that strategic measures focus on:

A) Financial performance
B) Implementation of strategy
C) Control rather than learning
D) A balance between financial and non-financial measures.