Deck 9: Behavioral and Organizational Issues in Management Accounting and Control Systems

Question 1

A well-designed management accounting and control system should incorporate the organization's ethical code of conduct.

Answer 1

True

Question 2

The term control in management accounting and control refers to the set of procedures,tools,performance measures,systems,and incentives that organizations use to guide and motivate all employees to achieve organizational objectives.

Answer 2

True

Question 3

The relevance of information in a MACS includes providing all of the following EXCEPT:

A)the most accurate information possible.
B)a global framework that can be applied uniquely to each division or unit.
C)feedback on performance measures in a timely fashion.
D)different costing methods for each division.

Answer 3

different costing methods for each division.

Question 4

Information is relevant in a MACS if:

A)it can be applied in a flexible manner.
B)it is inaccurate.
C)it is inconsistent.
D)it is late.

Question 5

The two major categories of technical considerations for a management accounting and control system are:

A)design and accuracy of information.
B)relevance of information and scope of system.
C)service and timely information.
D)development and flexibility.

Question 6

The monitoring phase of the process of control in MACS focuses on:

A)research and development, design, manufacturing, marketing, and service.
B)comparing the planned level to current performance to identify discrepancies.
C)measuring the current level of performance.
D)selecting measures to determine how well objectives are met.

Question 7

A system is in control if it is on the path to achieving its strategic objectives.

Question 8

Which BEST describes the control function in a management accounting and control system?

A)MACS seeks out areas that are out-of-control but not for corrective action.
B)MACS achieves cost reduction targets that are continually adjusted downward.
C)MACS guides and motivates employees to achieve organizational objectives.
D)MACS ensures performance standard goals are being met.

Question 9

The characteristic of a management accounting and control system that means the language used and the technical methods of producing management accounting information not conflict within various parts of the organization is referred to as being:

A)in control.
B)accurate.
C)consistent.
D)Kaizen.

Question 10

The organization generates information that helps decision makers assess whether the MACS is achieving its objectives.

Question 11

Behavioral considerations of a well-designed management accounting and control system include all of the following except:

A)short-term qualitative and quantitative measures.
B)incentive compensation.
C)information accuracy.
D)the organization's ethical code of conduct.

Question 12

Which BEST describes the purpose of a management accounting and control system (MACS)?

A)A MACS defines the value chain and identifies nonvalue-added activities for a business.
B)A MACS helps decision makers determine whether strategies and objectives are being met.
C)A MACS offers a system of controls to ensure employees are meeting predetermined standards.
D)A MACS provides a signal for management attention when areas are out-of-control.

Question 13

All of the following are true regarding a control system for a MACS EXCEPT:

A)a control system includes developing organizational objectives and executing a plan for implementation.
B)a control system includes monitoring the current level of performance and comparing it to the planned level of performance.
C)the same performance measures apply to all organizations.
D)the basic control process applies to all organizations.

Question 14

The five stages in the process of keeping an organization in control are:

A)planning, implementing, measuring, evaluating and correcting.
B)planning, executing, monitoring, evaluating and correcting.
C)budgeting, implementing, monitoring, evaluation and feedback.
D)budgeting,executing,measuring,feedback and evaluation.

Question 15

Consistency is an important technical consideration for a MACS because:

A)the system includes the organization's ethical code of conduct.
B)the system provides feedback
C)the system needs to be applied globally across all the segments of the organization
D)the system's applications need to be capable of being customized for local decisions.

Question 16

For the process of control to have meaning,the organization must be able to identify and correct out-of-control situations.

Question 17

A well-designed management accounting and control system should focus strictly on long-term quantitative performance measures.

Question 18

The evaluation phase of the process of control in MACS focuses on:

A)comparing the planned level to current performance to identify discrepancies and consider corrective measures.
B)measuring the current level of performance.
C)returning the system to an in control state.
D)selecting measures to determine how well objectives are met.

Question 19

Monitoring is the process of measuring the system's current level of performance.

Question 20

The characteristic of a management accounting and control system that allows employees to customize applications for local decisions is referred to as being:

A)timely.
B)flexible.
C)accurate.
D)in control.

Question 21

Assumptions of the human resources model of motivation include all of the following EXCEPT:

A)employees prefer to follow highly-detailed, prescribed procedures.
B)individuals are motivated by both financial and nonfinancial awards.
C)employees are knowledgeable about their jobs.
D)individuals are highly creative,ethical,and responsible.

Question 22

In a management accounting and control system design,behavioral expectations are BEST incorporated by:

A)using a mix of short-term and quantitative performance measures.
B)developing a task-related control system.
C)including the organization's code of conduct.
D)monitoring behavior with time and motion studies.

Question 23

When management implements their own ideas without involving employees,goal congruence may not occur.

Question 24

The underlying philosophy of the scientific management school developed at the turn of the century was:

A)to foster a work environment that encouraged creativity.
B)to use multiple performance measures.
C)that people find work objectionable and money is a primary motivator.
D)that employees want to feel they contributed value to their organization.

Question 25

Companies who adopt a MACS generally agree with the human resources model of motivation.

Question 26

Should management implement a new management accounting and control system without consulting employees? Why or why not?

Question 27

A major role for management accounting and control systems is to motivate behavior consistent with the desires of the organization.

Question 28

A primary purpose of an organization's code of ethics is to encourage behavior that is consistent with the company's ethical and cultural norms.

Question 29

The contemporary management view of motivation,the ________ is based on initiatives to improve the quality of working life.

A)balanced scorecard
B)human resources model of motivation
C)scientific management school
D)results control system

Question 30

How does the human resource model of motivation differ from the scientific management school?

Question 31

Ethics is a discipline that focuses on the investigation of standards of conduct and moral judgment.

Question 32

Individuals are motivated by both financial and nonfinancial means of compensation.

Question 33

When implementing a new management accounting and control system,it is BEST:

A)to allow management to implement their ideas.
B)for management to involve employees in the implementation.
C)to involve consultants and implement their experienced ideas.
D)to engage in benchmarking.

Question 34

An organization's code of ethics should not be integrated into the management accounting and control system design.

Question 35

The impetus for developing ways to improve employees' morale and job satisfaction was:

A)the scientific management school.
B)the balanced scorecard.
C)results control system.
D)the human relations movement.

Question 36

What assumptions does the human resource model of motivation make about employees? Why is it important for management to understand these assumptions?

Question 37

The text reported survey results that linked cheating during a game of golf to unethical conduct on the job.

Question 38

The ________ assumes that people find work objectionable and should therefore be monitored carefully.

A)MACS
B)Human relations movement
C)Scientific management school
D)HRMM

Question 39

The four key behavioral considerations in management accounting and control system design include all of the following EXCEPT:

A)integrating the organization's pay scale.
B)using a mix of short- and long-term qualitative and quantitative performance measures.
C)empowering employees to be involved in decision making and MACS design.
D)developing an appropriate incentive system to reward performance.

Question 40

Monitoring focuses on measuring employee performance against stated objectives.

Question 41

All of the following may be implemented to help ensure that an organization attains goal congruence EXCEPT:

A)performance measures for employees aligned with organizational objectives.
B)employee participation in decision making.
C)employee self-control.
D)a reward system for employees aligned with strategic goals.

Question 42

A recent survey conducted by the American Management Association showed that the monitoring of company employees is decreasing due to privacy issues.

Question 43

When a subordinate is caught padding an expense report,the supervisor should FIRST:

A)ignore the incident if it is the first offense.
B)report the incident to the personnel department.
C)confront the employee and ask him to submit a corrected expense report.
D)take action that complies with the organization's code of ethics.

Question 44

Managers are often subject to intense pressures from their job circumstances to suspend their ethical judgment,which might include all of the choices below EXCEPT:

A)requests to tailor information to favor particular individuals or groups.
B)pressures to ignore questionable or unethical practices.
C)solicitations for confidential information.
D)pleas to verify reports or test results.

Question 45

According to the hierarchy of ethical principles presented in the text,an action prohibited by ________ should also be unacceptable to ________.

A)legal rules, societal norms
B)personal norms, professional memberships
C)organizational norms, societal norms
D)professional memberships,legal rules

Question 46

The key group of users for an organization's ethical code of conduct is:

A)the board of directors.
B)shareholders.
C)managers.
D)All of the above are governed by the code.

Question 47

If an employee observes management engaging in unethical behavior,the best thing to do FIRST is:

A)ensure the facts are correct.
B)present the facts to the local newspaper.
C)do nothing and hope the problem resolves itself.
D)immediately report the incident to a superior.

Question 48

At the center of many boundary systems is(are):

A)a set of ethical principles.
B)congruent goals.
C)tasks to control.
D)earnings management.

Question 49

Video surveillance is an example of results control.

Question 50

If the organization's code of ethics is more stringent than an individual's code of ethics,conflicts may arise.

Question 51

The scientific school of management recognizes that employees want respect and a feeling that they make an important contribution.

Question 52

All of the following encourage ethical behavior among employees EXCEPT:

A)having a system for employees to point out violations of the organization's code of ethics without fear of retribution.
B)dealing promptly and consistently with persons who violate the organization's code of ethics.
C)exemplary behavior demonstrated by senior management.
D)protecting whistle blowers who report unethical behavior who have also acted unethically.

Question 53

The two most common types of control are task control and results control.Define and then explain when each is appropriate to use.

Question 54

Consequences resulting from violating an organization's code of ethics should intentionally be vague to allow for maximum flexibility.

Question 55

Careful attention to motivation is a key step for the organization and its employees to align their respective goals.

Question 56

An organization develops a code of ethics PRIMARILY because:

A)the code allows for punishment of those who do not follow organizational ethical standards.
B)it helps reduce ethical conflict by avoiding ambiguity and misunderstanding.
C)the management accounting department finds it helpful.
D)it is required by law.

Question 57

The human resources model of motivation is strongly influenced by Japanese management practices.

Question 58

To promote ethical decision making:

A)consequences of unethical behavior should be left undefined to allow for flexibility.
B)a statement of the organization's code of ethics should be communicated to each employee.
C)violators of the code of ethics should be allowed several warnings before severe consequences are imposed.
D)management should be excused from adhering to the organization's ethical code of conduct when it conflicts with personal values.

Question 59

The elements of an effective ethical control system include all of the following EXCEPT:

A)a statement of the employee's ethical responsibilities.
B)an ongoing internal audit of the efficiency of the organization's ethical control system.
C)a statement of the organization's values and code of ethics.
D)a reward system for turning in those who violate the organization's ethical code.

Question 60

To help maintain goal congruence,organizations use:

A)preventative control.
B)monitoring.
C)results control.
D)All of the above are correct.

Question 61

Feedback systems that monitor organizational outcomes and correct any deviations from predetermined performance standards are referred to as:

A)a diagnostic control system.
B)the intensity factor.
C)goal congruence.
D)monitoring.

Question 62

Explain why it is important to integrate the organizational code of ethics into the management accounting and control system.

Question 63

Feedback systems that force a dialogue among all organizational participants about the data that are coming out of the system and what to do about the data are called:

A)diagnostic control systems.
B)monitoring.
C)preventative controls.
D)interactive control systems.

Question 64

To the extent that an ethical hierarchy exists,________ have the highest authority.

A)societal norms
B)legal rules
C)organizational norms
D)personal norms

Question 65

Authoritative budgeting occurs when a superior simply tells subordinates what their budget will be.

Question 66

Codes of ethics developed by professional organizations reflect broad moral principles such as:

A)loyalty.
B)discretion.
C)competence.
D)All of the above are correct.

Question 67

________ is when an employee alters his or her actions specifically in an attempt to manipulate a performance indicator.

A)Gaming the performance indicator
B)Data falsification
C)Smoothing
D)Change management

Question 68

________ occur(s)when a superior simply tells subordinates what their budget will be.

A)Authoritative budgeting
B)Stretch targets
C)Consultative budgeting
D)Budget slack

Question 69

Smoothing is a form of earnings management.

Question 70

When a manager's and employee's goals are aligned with organizational goals,it is referred to as:

A)a diagnostic control system.
B)the intensity factor.
C)goal congruence.
D)monitoring.

Question 71

Pressures on managers to act unethically include all of the following EXCEPT:

A)pressures to act in the long-run best interest of the shareholders.
B)solicitations for confidential information.
C)requests to falsify reports.
D)requests to bias information in favor of certain stakeholders.

Question 72

Intrinsic rewards are any rewards that one person provides to another to recognize a job well done.

Question 73

The type of control that focuses on measuring and comparing employee performance against stated objectives is called:

A)task control.
B)monitoring.
C)results control.
D)preventative control.

Question 74

An interactive control system should be used to achieve goal congruence when:

A)human behavior needs to be controlled.
B)there is a large degree of strategic uncertainty.
C)systems are allowed to run in a routine fashion.
D)the behavior of employees needs to be inspected while they are performing a task.

Question 75

When sales people are evaluated strictly on sales quotas:

A)they will attempt to sell as much high price merchandise as possible.
B)they are likely to have buy-in.
C)they always become unmotivated.
D)none of the above

Question 76

Which of the following is an essential element of employee empowerment?

A)allowing employees to participate in decision making
B)ensuring employees understand the information they are generating
C)ensuring employees understand the information they are using
D)All of the above.

Question 77

Budgeting slack is most likely to occur when a firm uses the budget only as a planning device and not for control.

Question 78

Hierarchical organizations with many layers of management are referred to as flat organizations.

Question 79

When the operating budget is used as a control device,managers are more likely to be motivated to budget higher sales than actually anticipated.

Question 80

To the extent that an ethical hierarchy exists,________ have the least authority.

A)societal norms
B)groups norms
C)personal norms
D)legal rules