Question 1

The management accountant must be knowledgeable about all relevant laws,regulations,and technical standards that pertain to his or her duties.

Accepted Answer

The management accountant is responsible for ensuring that their work complies with all applicable laws, regulations, and technical standards. Without this knowledge, the accountant may make mistakes that could not only harm the organization but also lead to legal or regulatory issues. Therefore, it is essential for the management accountant to stay up-to-date with relevant laws and regulations.

Question 2

The management accountant who is responsible only for nonfinancial reports to management does not have to remain objective,using the doctrine of fairness,when preparing all reports and analyses.

Accepted Answer

The management accountant should remain objective and use the doctrine of fairness when preparing all reports and analyses, regardless of whether they are financial or nonfinancial. Failure to do so could lead to biased or incomplete information being presented to management, hindering their ability to make informed decisions.

Question 3

If a management accountant gives information about a future merger of his or her company to a relative,the accountant has acted unethically.

Accepted Answer

Disclosing confidential information about a future merger to a relative is a breach of ethical behavior for a management accountant as it violates confidentiality and can negatively impact the company's financial and strategic position.

Question 4

Management accounting reports can

Accepted Answer

Management accounting reports can use a flexible format, incorporating both financial and nonfinancial data, and can be prepared for any time period. Therefore, all of the above options are correct.

Question 5

The unit of measurement used in management accounting is

Accepted Answer

The unit of measurement used in management accounting varies depending on the situation at hand. It can be historical dollar, current replacement cost or any other measurement unit that is useful and relevant to the problem being addressed. There is no strict requirement for a particular unit of measurement to be used by competing companies.

Question 6

When unable to resolve an ethical conflict,the accountant should consider consulting with an attorney as to the legal obligations and rights concerning the ethical conflict.

Accepted Answer

Consulting with an attorney can provide insight into legal obligations and rights related to ethical conflicts, which can help the accountant make informed decisions on how to proceed. However, it is important to note that legal and ethical considerations may not always align, and simply consulting with an attorney does not absolve the accountant from their ethical duties and responsibilities.

Question 7

Accumulating,interpreting,and reporting financial information is important for

Accepted Answer

Virtually all types of organizations need to accumulate, interpret, and report financial information in order to make informed decisions and ensure proper financial management. This includes service-related and manufacturing firms as well as not-for-profit organizations.

Question 8

Management accounting

Accepted Answer

Management accounting uses a variety of measurement units, including physical and monetary measures, to provide useful information to internal decision-makers. It is not focused on external parties (option A) and requires ongoing reporting rather than periodic reporting (option B). While the double-entry recording system is commonly used in accounting, it is not the only method used in management accounting (option D).

Question 9

Although management accountants should try not to engage in activities that would prejudice their ability to carry out their duties,they are not obligated to refrain from such activities after business hours,as long as these activities take place off company premises.

Accepted Answer

The answer of Although management accountants should try not to...

Question 10

The management process includes all of the following stages except

Accepted Answer

The management process typically includes four stages: planning, organizing, leading, and controlling. Recording is not typically considered a formal stage in the management process, although it may be a part of the controlling stage in terms of tracking and monitoring progress. Therefore, choice D is the correct answer as it is the only option that is not typically considered a stage in the management process.

Question 11

Which of the following is a characteristic of management accounting?

Accepted Answer

Management accounting is used primarily by internal users such as managers, rather than external users such as investors and creditors. It is concerned with providing information for decision-making and planning for future performance, rather than reporting past performance. It may use a variety of measurement units, including historical costs and other methods. While it may use generally accepted accounting principles as a guide, it is not required to follow them strictly.

Question 12

Which of the following types of information is not essential for a manager to run a business effectively?

Accepted Answer

The quote of the current price of the company's stock is not directly essential for a manager to run a business effectively. While it may be useful for certain financial decision-making, it is not necessary for day-to-day operations, planning, or controlling of operations. The other options listed (product or service costing information, data for planning and controlling of operations, special reports and analyses to support decisions) are all essential types of information for effective business management.

Question 13

In comparing management accounting with financial accounting,which of the following statements is true?

Accepted Answer

Financial accounting reports are required to follow strict rules and regulations set by GAAP and are meant to provide objective information for external stakeholders, such as investors and creditors. Management accounting, on the other hand, is more focused on providing information for internal decision-making and is therefore more subjective and flexible in its reporting methods. Additionally, while financial accounting primarily uses historical costs as a basis for measurement, management accounting may use various tools and methods, such as cost- volume-profit analysis and budgeting, to inform decision-making.

Question 14

Practitioners of management accounting and financial management have a responsibility to communicate information fairly and objectively.

Accepted Answer

Practitioners of management accounting and financial management are held to ethical standards that require them to communicate information fairly and objectively. This includes providing accurate and complete financial statements, as well as disclosing any material information that may impact stakeholders' investment decisions. Failure to communicate information in a fair and objective manner can result in legal and reputational consequences for the organization and the practitioner involved.

Question 15

Management accountants who alter reports to meet targeted levels of performance are not acting unethically,because their job is to provide information that will aid in communicating the goals of the business.

Accepted Answer

Management accountants have a responsibility to provide accurate and unbiased financial information to aid in decision making. Altering reports to meet targeted levels of performance is considered unethical as it misrepresents the true financial position of the business and can lead to poor decision making. The purpose of management accounting is not to simply communicate goals, but to provide reliable financial information to support decision making.

Question 16

Although some management accountants strive to update their knowledge and skills,such updating is not within the realm of management accountants' ethical standards.

Accepted Answer

Management accountants are required to maintain their professional competence by updating their knowledge and skills in order to provide competent professional services. This is a requirement of their ethical standards. Therefore, option A is incorrect.

Question 17

Management accountants working in purchasing must decline gifts from company vendors,because acceptance of a gift might influence or be perceived as influencing their performance or decision analyses.

Accepted Answer

Management accountants have ethical responsibilities and must uphold the principle of objectivity in their work. Accepting gifts from vendors can raise questions about their impartiality and create a conflict of interest. Therefore, management accountants working in purchasing should decline gifts from company vendors.

Question 18

Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.

Accepted Answer

The confidentiality standard does not override legal obligations to report illegal acts to outside authorities. Failure to report such knowledge can result in the accountant being charged as an accessory to the crime.

Question 19

Management accounting and financial accounting are similar in which of the following respects?

Accepted Answer

Both management accounting and financial accounting provide relevant and useful information to management. However, they differ in their primary focus and the type of information they provide. Financial accounting is primarily concerned with providing financial information to external stakeholders, such as investors, creditors, and regulatory agencies, while management accounting is focused on providing information to internal stakeholders, such as managers and executives, to help them make informed business decisions. Additionally, financial accounting follows generally accepted accounting principles (GAAP) and is more focused on providing historical financial data, while management accounting is more forward-looking and relies on data analysis and forecasting.

Question 20

When there is an ethical conflict,the management accountant should resign if the immediate supervisor is involved with the conflict.

Accepted Answer

The answer of When there is an ethical conflict,the management...

Quiz 15: The Changing Business Environment - a Managers Perspective