Operational control systems can be distinguished from financial control systems:
A) In the time horizon: financial-control systems have a long-term perspective.
B) Because they focus on the control of basic business processes.
C) Because such systems rely on the use of flexible, not static, budgets.
D) Because they focus on explaining the total operating income variance for a period.
E) Because they do not include nonfinancial performance indicators.

Question

Quizplus · Accepted Answer

Operational control systems focus on the control of basic business processes, whereas financial control systems focus on financial management and strategy. Other choices are not accurate, as financial-control systems may have short- or long-term perspectives (A), rely on both static and flexible budgets (C), focus on various performance indicators including nonfinancial ones (E), and do not necessarily explain the total operating income variance for a period (D).

Operational Control Systems Can Be Distinguished from Financial Control Systems