Question 1

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

Accepted Answer

Incorporating the organization's ethical code of conduct into the management accounting and control system demonstrates a commitment to ethical behavior and helps to ensure that actions taken by management align with the organization's values and principles. This is essential for maintaining a positive reputation, building trust with stakeholders, and mitigating the risks of unethical behavior.

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.

Accepted Answer

This statement is true as control encompasses various elements that are intended to ensure that organizational objectives are achieved efficiently and effectively. These elements include procedures, tools, performance measures, systems, and incentives that guide and motivate employees to work towards common goals. Management accounting and control systems are designed to help organizations measure and monitor performance, identify areas for improvement, and take corrective actions to ensure that they stay on track towards achieving their objectives.

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.

Accepted Answer

The other options (accurate information, global framework, timely feedback) are important in a MACS, but different costing methods for each division may not be necessary or relevant depending on the nature of the organization and its goals.

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.

Accepted Answer

Information is relevant in a MACS (Management Accounting and Control System) if it can be applied in a flexible manner. This means that the information is adaptable to changes within the system and can be used to make informed decisions. Inaccurate, inconsistent, and late information is not relevant in a MACS as it can lead to faulty decision-making and ineffective control.

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.

Accepted Answer

The two major categories of technical considerations for a management accounting and control system are the relevance of information and scope of the system. This refers to how well the system provides information that is useful to management and how broadly the system can be applied. The other options listed are important considerations, but they are not the two major categories.

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.

Accepted Answer

The monitoring phase in the process of control in Management Accounting Control Systems (MACS) primarily focuses on measuring the current level of performance to understand how the organization or specific processes are performing at a given time.

Question 7

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

Accepted Answer

This statement is true. A system can be considered to be in control if it is following a clear path towards achieving its strategic objectives. This means that the system is effectively managed and is working towards its intended goals.

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.

Accepted Answer

The control function in a management accounting and control system is primarily about guiding and motivating employees to achieve organizational objectives, ensuring that the organization is on track to meet its goals.

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.

Accepted Answer

Consistency is important in management accounting and control systems to ensure that there is a common understanding and interpretation of the information being presented throughout the organization. This helps to avoid confusion, misunderstandings, and conflicts between different departments or individuals involved in decision making.

Question 10

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

Accepted Answer

An MACS generates and uses information that helps decision makers assess whether an organization 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.

Accepted Answer

Information accuracy is a technical consideration, not a behavioral one. Behavioral considerations focus on how the system influences human behavior and decision-making.

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.

Accepted Answer

A management accounting and control system (MACS) is designed to help decision makers evaluate whether strategies and objectives are being met. It provides information about financial and non-financial performance measures, which can be used to make informed decisions and take corrective actions when necessary. While a MACS may also include controls to ensure employees meet standards and provide signals for management attention, its primary purpose is to help with decision making and performance evaluation. Option A is incorrect because defining the value chain and identifying non-value-added activities is more related to process improvement than management accounting and control. Option D is partially correct, but it does not capture the full purpose of a MACS.

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.

Accepted Answer

The statement "the same performance measures apply to all organizations" is not true. The performance measures should be specific to each organization and its objectives.

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.

Accepted Answer

The five stages in the process of keeping an organization in control are planning, executing, monitoring, evaluating, and correcting. Planning involves setting goals and objectives, creating plans, and deciding on resources required. Executing involves implementing the plans and carrying out activities according to the plan. Monitoring involves tracking progress, performance, and activities. Evaluating involves analyzing results and outcomes, and comparing them to the goals and objectives set in the planning stage. Correcting involves making adjustments, changes, or improvements based on the evaluation results. Therefore, option B is the best choice as it correctly mentions all five stages in the proper order.

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.

Accepted Answer

Consistency is important for a MACS because it needs to be applied globally across all segments of the organization, regardless of geographic location, business unit or department. This ensures that everyone follows the same standards and procedures, making the system more effective and efficient.

Question 16

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

Accepted Answer

This is because the purpose of control is to ensure that the organization is operating within acceptable limits and taking corrective actions when necessary. If the organization can't identify and correct out-of-control situations, then the control process is ineffective.

Question 17

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

Accepted Answer

A well-designed management accounting and control system should focus on long-term quantitative performance measures. However, the MACS must be designed so that the results of performance measurement are fed back to the appropriate units in the most expedient way possible. The information must be timely.

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.

Accepted Answer

The evaluation phase in MACS involves comparing the planned level of performance with the current level of performance to identify any discrepancies and consider corrective measures. This helps in ensuring that the system stays in control and achieves its objectives. Measuring the current level of performance and selecting measures to determine how well objectives are met are also important in the evaluation phase, but they are not the primary focus. Returning the system to an in-control state is part of the corrective measures taken after identifying discrepancies in performance.

Question 19

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

Accepted Answer

Monitoring involves continuous measuring and observing the system's behavior, performance, and other metrics to ensure that it operates within the established standards and requirements. This enables early detection of potential issues, faults, and errors before they escalate into major problems that can impact the system's availability, reliability, and functionality. Therefore, monitoring plays a critical role in maintaining the system's health, optimizing its performance, and enhancing its quality.

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.

Accepted Answer

Flexibility refers to the ability to customize or adapt to local decisions, which allows for greater employee input and decision-making. Timeliness and accuracy are also important characteristics of a management accounting and control system, but they do not necessarily relate to the ability to customize applications. Being "in control" is a vague term and does not specifically describe a characteristic of a management accounting and control system.

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

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

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.

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

Information is relevant in a MACS if:

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

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

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

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

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:

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

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

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

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

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

Consistency is an important technical consideration for a MACS because:

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

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

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

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

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