Deck 12: Strategy and Control

Question 1

Lean accounting initiatives are based on the belief that only a small fraction of the total time and effort in an organisation actually adds value for the end customer.

Answer 1

True

Question 2

Friedman's view of the 'Flat World' involves moving back to embrace the best of the past features of management accounting.

Answer 2

False

Question 3

A Friedman's 'flattner' in his discussion of 'flat world' theory is:

A) the rise of the personal computer
B) the development of the Internet
C) outsourcing
D) all of the above are 'flattners'.

Answer 3

D

Question 4

Friedman's 'flattners' involve accelerating the connecting of the unconnected.

Question 5

Strategic management accounting is essentially theoretical in nature.

Question 6

The value-based management (VBM) technique takes a holistic approach to the management of an organisation and focuses on the underlying 'drivers' of value.

Question 7

'Control' in the text, is commonly used as a short-form term for managerial control and/or managerial control system tools.

Question 8

A future direction which enables the focusing of an organisation's resources and decision making around a common theme, is a definition of:

A) planning
B) budgeting
C) control
D) strategy

Question 9

Good internal control systems should aim to eliminate risk.

Question 10

Rather than having a backward focus strategic management accounting looks to the future.

Question 11

In management accounting, designing and managing global networks, controlling them through techniques such as empowerment and creating value through integration is know as:

A) flat earth theory
B) network orchestration
C) management control
D) inter-globalisation

Question 12

Management control systems have one main role; to facilitate decisions by providing relevant and timely information to support decision making.

Question 13

Porter classifies strategy into either cost leadership or product differentiation.

Question 14

Management accounting is now seen as a useful vehicle by which to implement economic theory and social and environmental change.

Question 15

'Relevance Lost' by Johnson and Kaplan ,was published in 1995.

Question 16

The value-based management (VBM) technique, was proposed by Kaplan and Norton.

Question 17

Prior to the 1980's accounting for internal control did not have a strategic component.

Question 18

Overproduction is a non-value added activity.

Question 19

Which of these are is not included within the scope of current management accounting?

A) Compliance with international accounting standards
B) Consideration of environmental issues
C) Consideration of intangible assets
D) None of the above, i.e. all are included within the scope of current management accounting

Question 20

Early writers on strategic management believed that better control would occur within an organisation if the management accounting function was more closely aligned to the financial accounting.

Question 21

Which of these is a key influence on the nature of control systems in the Simons's 'levers of control' framework ?

A) belief systems
B) boundary systems
C) diagnostic systems
D) a and b

Question 22

In Porter's competitive forces model which of the following is a decision influencing control tool rather than a decision facilitating control tool?

A) budget targets
B) cost data for pricing purposes
C) discounted cash flow analysis
D) all are decision influencing control tools

Question 23

The person(s) most closely associated with the 'levers of control framework' that has informed study in the area of management accounting and control is:

A) Otley
B) Simons
C) Kaplan and Norton
D) Ittner and Larcker

Question 24

Contemporary management accounting topics include all of these, except:

A) risk management control
B) sustainable accounting
C) central planning versus an unplanned economy
D) none of the above, i.e. all of these topics are covered by contemporary management accounting

Question 25

The 'lean' accounting principle is:

A) just in time inventory management
B) cost volume profit
C) capital budgeting
D) all are lean accounting principles

Question 26

Which of these is an informal control mechanism as opposed to a formal mechanism?

A) the influence of the owner/founder
B) social work settings
C) one-on-one consultations between senior managers
D) all are informal control mechanisms

Question 27

The author of many works that attempt to define strategy is:

A) Porter
B) Friedman
C) Johnson
D) Kaplan

Question 28

Under the Ittner and Larcker management framework which of these is not a limitation of using Economic Value Added (EVA) as a measure of value added by management?

A) It is a measure of the past
B) It is based on short-term performance
C) EVA can only be calculated for stock exchange listed companies.
D) None of the above, i.e. all are limitations

Question 29

Managers consider a few general strategy types in their decision making processes, including:

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 30

Which of these is not a financial performance measure?

A) return on investment
B) share price
C) economic value added
D) none of the above, i.e. all are financial performance measures

Question 31

A broad view of management control might encompass which of the following?

A) planning
B) coordination
C) communication
D) all of the above

Question 32

The statement that is incorrect concerning the 'StratEx' (strategic expenditure) component under the Kaplan and Norton's framework, is:

A) This type of expenditure generally involves investment assets that require a different form of analysis to tangible assets,
B) This type of expenditure should have its own line in the income statement.
C) This type of expenditure is generally given priority by the firm above more routine types of expenditure
D) This type of expenditure does not always have a simple causal relationship with sales and operating levels
E)g. research and development, training.

Question 33

Strategy can be viewed at which level?

A) Corporate level
B) Business unit level
C) Task level
D) both a and b

Question 34

Which of these is not one of the key questions in Otley's performance management systems framework?

A) What are the key success factors?
B) What are the key performance measures?
C) What products or services does the organisation provide
D) None of the above, i.e. all are key questions

Question 35

Under the Kaplan and Norton strategy map framework preparing budgets comes under which stage?

A) Developing the strategy
B) Translating the strategy
C) Planning operations
D) Monitoring and learning