Question 1

What are the disadvantages of using mnemonic codes? Include at least two examples.

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Question 2

The more frequently data are reported, the better.

Accepted Answer

Frequent reporting can lead to information overload, making it difficult to identify significant trends and may also increase the risk of reporting errors or inconsistencies. Optimal reporting frequency depends on the context and purpose of the data.

Question 3

Responsibility reporting is the process of reporting data to a manager that measure activities over which the manager has some authority and for which the manager is held responsible.

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Responsibility reporting involves the reporting of data specifically related to activities over which a manager has authority and is held responsible, making option A true.

Question 4

Explain why reference identifiers are necessary to provide adequate audit trails.

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Question 5

A sequence code uniquely identifies an object and is assigned in numerical sequence.

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A sequence code is used to identify an object or item by assigning a unique number to it in a specific order, often based on the order of creation or acquisition.

Question 6

What numbers should NOT be used for unique reference identifiers?

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Question 7

Explain the meaning of exception reporting.

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Question 8

Explain what is meant by bidirectional and multidimensional aspects of audit trails.

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Question 9

Describe a situation where a report should be generated weekly or even daily and give two examples of reports a manager would probably want to receive daily.

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Question 10

A block code leads an accountant or auditor from a data item's specific location in the accounting information system to its preceding or successor location.

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A block code is a system of grouping similar items together in a sequence, not for tracing data locations.

Question 11

What are the reporting principles discussed in this chapter?

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Question 12

What is an audit trail?

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Question 13

Production managers prefer the use of physical measures of performance rather than monetary measures in reports covering short reporting periods.

Accepted Answer

Physical measures such as units produced or hours worked are more relevant for short-term monitoring and control of production processes compared to monetary measures such as revenue or profit. This is because monetary measures can be influenced by factors such as pricing, discounts, and exchange rates, which are not directly related to production efficiency.

Question 14

Define what an audit trail is and what it does. Give two examples of numbers that should NOT be used as identifiers.

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Question 15

Exception reporting is the arrangement together of actual data for a current period with either budget data for the current period or actual data for a prior period, thereby facilitating comparison of the data.

Accepted Answer

Exception reporting is a management tool where only significant deviations from planned performance or budget are reported, rather than reporting all performance data. This focuses attention on important discrepancies that require action.

Question 16

The meaning of comparative reporting is that only data reflecting a significant deviation from expected, budgeted, or normal should be reported to managers.

Accepted Answer

Comparative reporting involves the comparison of actual results to expected, budgeted, or normal results, and reporting all deviations - both significant and insignificant - to managers for analysis and decision-making.

Question 17

Describe in what situations the frequency of reporting should be weekly or even daily.

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Question 18

Reporting by function presents data according to the functional duties of managers.

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Reporting by function is a commonly used method of organizing data according to the functional responsibilities of managers. This approach helps managers to understand how well their teams are performing in different areas of responsibility, and to identify areas for improvement or further investment. By comparing data across different functional areas, managers can gain insights into how best to allocate resources, focus their efforts, and improve performance.

Question 19

A reference identifier assigns meaning to various positions in a code.

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Question 20

Below is an exception report for records selected because of the size of their variance. If the system would allow you to order the list of customers from the most severe variance to the lease severe variance, what would be the order of the records?
SOUTHWEST SALES REPS, INC.
SALES BY CUSTOMER
FOURTH QUARTER 2012

$\begin{array}{lrrrrr}\text { Customers } & \text { This Year } & \text { Last Year } & \text { Variance }&\text { Budget } & \text { Variance }\\hline
\text { Barrett Company } & \$ 30,000 & \$ 26,000 & \$ 4,000+ & \$ 32,000 & \$ 2,000- \
\text { Cardenas Bros. } & 94,000 & 95,000 & 1,000- & 90,000 & 4,000+\\text { Estrada Coaches } & 72,000 & 69,000 & 3,000+ & 80,000 & 8,000- \
\text { Reed Enterprises } & 52,000 & 44,000 & 8,000+ & 54,000 & 2,000-\\text { Tran Industries } & 39,000 & 35,000 & 4,000+ & 31,000 & 8,000+ \
\text { Wise Imports } & 80,000 & 85,000 & 5,000- & 90,000 & 10,000-
\end{array}$

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Quiz 5: Reporting Process, Coding Methods, and Audit Trails