Deck 15: The Essentials of Control

Question 1

An example of financial __________ is the fact that organizations are often required to perform and report the results of a financial audit.

Answer 1

cost

Question 2

Operating controls allow you to step back and look at the big picture and make sure all the pieces of the picture are correctly aligned.False: Strategic controls allow you to step back and look at the big picture and make sure all the pieces of the picture are correctly aligned.Medium;Knowledge;Comprehension

Answer 2

False
Strategic controls allow you to step back and look at the big picture and make sure all the pieces of the picture are correctly aligned.

Question 3

An example of direct financial costs are employees whose primary function is related to control.

Answer 3

False
An example of indirect financial costs are people,such as internal quality control,who the organization employs whose primary function is related to control.

Question 4

Organization controls are relevant only in the for-profit organization context.

Question 5

Culture and reputation costs are intangible costs associated with any form of control.

Question 6

Examples of feedback control include preventive maintenance on machinery and equipment and due diligence on investments.

Question 7

The controls for the level of proactivity function as a feedback mechanism to help leaders and managers make adjustments in the strategy.

Question 8

When well-designed,organizational controls can provide benefits such as

A)responsive costs.
B)culture and reputation costs.
C)direct and indirect financial costs.
D)better ability to manage uncertainty and complexity.

Question 9

Controls can cost the organization through

A)decentralized decision-making.
B)opportunity recognition.
C)botched implementation.
D)layoffs.

Question 10

Requiring two signatures for checks written on bank and investment accounts is an example of financial ______________.

Question 11

Costs can be controlled using __________,where managers compare actual expenses to forecasted ones.

Question 12

The process by which an organization influences its subunits and members to behave in ways that lead to the attainment of organizational goals and objectives refers to ________________.

Question 13

How is culture and reputation a cost for organizational control? Although organizations might want to keep track of employee behavior,or otherwise put forms of strict monitoring in place,these efforts can have undesirable cultural consequences in the form of reduced employee loyalty,greater turnover,or damage to the organization's external reputation.Management researchers have criticized theory that assumes that managers cannot be relied upon by shareholders can make managers less reliable.Medium;Comprehension

Question 14

How was HP's extreme form of control turned to indictment on spying on the Board of Directors? The Board of Director's accounts were "hacked" and he claimed a record of his home phone calls were illegally obtained.Chairman Patricia Dunn defended this rather extreme form of control as legal,but the amount of damage to the firm's reputation from these charges led the firm to discontinue the practice.Medium;Knowledge

Question 15

_____________ are a way for banks,investors,and other key stakeholders to understand how financially fit the organization is.

Question 16

Organization researchers have long argued that ______________ is best when those people and areas of the organization that are closest to customers and pockets of uncertainty also have the ability to respond to them.

Question 17

An example of _____________ financial costs is paying for an accountant who conducts an audit for the organization.

Question 18

The feedback control is the most proactive of controls,and is generally a basis for reactions.

Question 19

The Baldrige Award is given to organizations only in the manufacturing industry.False: The Baldrige Award is given to organizations in a wide range of categories and industries,from education,to ethics,to manufacturing.Medium;Knowledge

Question 20

What are the four steps of organizational control? The four steps include establish standards,measure performance,compare performance to standards,and then take corrective action as needed.Medium;Knowledge

Question 21

_______________ controls track aspects of the organization that aren't immediately financial in nature.

Question 22

Outcome controls are appropriate when managers must coordinate resources and capabilities across different business units.

Question 23

Monitoring problems in a way that provides their timely prevention rather than after the fact reaction refers to ______________.

Question 24

Assets show the results of the organization's operations,such as revenues,expenses,and profit or loss.False: Assets show what the organization is worth at a single point in time.Easy;Knowledge

Question 25

Proactivity,or _______________ control,can be defined as the monitoring of problems in a way that provides their timely prevention,rather than after the fact reaction.

Question 26

Across the different types of controls in terms of level of proactivity and outcome versus behavioral,controls can take on which forms?

A)financial and non-financial
B)financial
C)non-financial
D)strategic

Question 27

______________ control is concerned with executing the strategy and function within the framework established by the strategy.

Question 28

Outcome controls are effective when there's little internal interference between managerial decision making on the one hand and business performance on the other.

Question 29

_____________ controls are generally preferable when just one or two performance measures are good gauges of a business' health.

Question 30

The process of monitoring and adjusting ongoing activities and processes is known as ________________ control.

Question 31

Proactivity,one of the types of control,includes which of the following?:

A)Initiate.
B)concurrent.
C)fastforward.
D)outcome control.

Question 32

Strategic controls contribute to the successful execution of the current strategy.

Question 33

How are financial controls executed?

Question 34

While we often think of financial controls as a form of outcome control,they can also be used as a behavioral control.

Question 35

If a manager must request approval for expenditures over a budgeted amount,then the financial control also provides a _____________ control mechanism,as well.

Question 36

What is the theory behind non-financial controls? The theory is that they should provide managers with a glimpse of the organization's progress well before financial outcomes can be measured.Easy;Knowledge;Comprehension

Question 37

The direct evaluation of managerial and employee decision-making involves _________________ controls.

Question 38

The control that permits managers to use information on past performance to bring future performance in line with planned objectives is referred to as

A)concurrent control.
B)feedback control.
C)feedforward control.
D)outcome control.

Question 39

Behavior controls and commensurate rewards are typically more appropriate when there are only a few external and internal factors that can affect the relationship between a manager's decisions and organizational performance.False: Behavior controls and commensurate rewards are typically more appropriate when there are many external and internal factors that can affect the relationship between a manager's decisions and organizational performance.Hard;Comprehension

Question 40

______________ control involves the management of a firm's cost and expenses in order to control them in relation to budgeted amounts.

Question 41

The only financial statement that managers need to manage their business effectively is the P&L statement.

Question 42

Current liabilities are those coming due in the long term.

Question 43

________________ are formal investigations to ensure that financial management practices follow generally accepted procedures,policies,laws,and ethical guidelines.

Question 44

The net income portion of the P&L statement is the bottom line and is a measure of a firm's ability to operate at a profit.

Question 45

The income/profit and loss statement represents the relation of income and expenses for the life of the firm.

Question 46

The portion of a bank note that is not payable in the coming year is short-term debt.

Question 47

An example of variable expenses includes

A)employee wages.
B)contractual agreements.
C)internet connections charges.
D)legal retainer services.

Question 48

A business's noncurrent assets would be those that have a useful life of more than one year.

Question 49

Cash flow is the most immediate indicator of an impending problem in the firm.

Question 50

If $20,000 is made as a down payment and $80,000 is financed with a bank note to buy land and a building,the $80,000 is the

A)short term debt.
B)assets.
C)accounts receivable.
D)long-term debt.

Question 51

The advantage of breaking out sales and cost of goods sold/sales into separate categories over combining all sales and costs into one category is that this

A)enables you to make inventory and sales decisions about each product individually.
B)enables the P&L statement to show the gross profit.
C)shows a reasonable return on investment.
D)maximizes gross profit.

Question 52

Profit and cash flow mean the same thing in the short run.

Question 53

The cost of goods sold/sales portion of the income statement shows the cost of products purchased for resale,or the direct labor cost for service.

Question 54

An example of fixed assets is

A)land.
B)patents.
C)inventory.
D)equipment.

Question 55

Examples of current liabilities include all of the following EXCEPT

A)employment.
B)formulas.
C)salaries payable.
D)income and sales tax.

Question 56

A comparison of the company's current assets and its current liabilities reveals its working debt.

Question 57

______________ refers to a simple listing of all planned expenses and revenues.

Question 58

The balance sheet,the P&L statement and the cash flow statement are collectively referred to as the ______________.

Question 59

The key to operating a profitable business is to maximize your budget.

Question 60

Balance sheets are usually done at the beginning of each month.

Question 61

________________ may be bank notes or loans made to purchase the business's fixed asset structure.

Question 62

The _______________ section of the P&L statement is a measurement of all the operating expenses.

Question 63

What are five factors that can affect the outcome of the bottom line of a firm?

Question 64

Those assets that are cash or can be readily converted to cash in the short term are called ______________.

Question 65

__________________ examines the relationship between specific figures on the financial statements and helps explain their significance.

Question 66

The _____________ portion of the income/P&L statement tells the difference between what you sold the product or service for and what the product or service cost you.

Question 67

What comprises the cash flow statement?

Question 68

_____________ expenses are those expenses that do not vary with the level of sales,thus,you will have to cover these expenses even if the sales are less than the expenses.

Question 69

What is the advantage of breaking out sales and cost of good sold/sales into separate categories over combining all sales and costs into one category?

Question 70

In the case of intangible assets,___________ means the value of intangible assets minus amortization.

Question 71

Organizations often use only one non-financial control with the assumption that it will cascade down to bottom-line financial performance.False: Organizations often use more than one non-financial control with the assumption that they will cascade down to bottom-line financial performance.Hard;Comprehension;Knowledge

Question 72

The sales or ______________ portion of the income statement is where the retail price of the product is expressed in terms of dollars times the number of units sold.

Question 73

What is the overall budget a manager creates monthly or quarterly?

Question 74

The _______________ statement is the detail of cash received and cash expended for each month of the year.

Question 75

What are operating expenses? The operating expense is a measurement of all the operating expenses of the business.There are two types of operating expenses: fixed and variable.Easy;Knowledge

Question 76

Proactive managers plan ahead for the problems the business is likely to encounter and the opportunities that may arise by preparing ___________ financials.

Question 77

The _______________ is a snapshot of the business's financial position at a certain point in time.

Question 78

Those assets that are not easily converted to cash in the short term are referred to as ?????________________.

Question 79

What is owner's equity?

Question 80

_____________ expenses are those expenses that vary with the level of sales.