ACC 241 Exam 1 ASU questions well
answered
Audit Committee - correct answer ✔✔ A group of at least 3 individuals responsible for
overseeing all internal and external audit functions of a company. In addition, at least one
member must be a financial expert or have significant financial expertise. Audit committees are
responsible for selecting and appraising independent and external CPA firms to provide audit
functions. They also oversee the financial reporting process including (but not limited to)
supervising internal auditors, monitoring internal controls, and ensuring adequate compliance
with SEC and GAAP standards. Because staff on audit committees report to the board of
directors of a company, they cannot have ties to the company's management team or be in a
position where their independence can be questioned.
Board of Directors - correct answer ✔✔ Individuals elected by a corporation's shareholders to
oversee the management of the corporation. The members of a Board of Directors are paid in
cash and/or stock, meet several times each year, and assume legal responsibility for corporate
activities.
Budget - correct answer ✔✔ An estimate of costs, revenues, and resources over a specified
period, reflecting a company's expectation of future financial conditions and its goals for the
period. One of the most important administrative tools, a budget serves also as a (1) plan of
action for achieving quantified objectives, (2) standard for measuring performance, and (3)
device for coping with foreseeable adverse situations.
Management Accountant - correct answer ✔✔ An accountant who specializes in the study of
how managers use accounting and/or financial information in current or future business
decisions. Management accountants use both qualitative and quantitative information in their
work. Unlike other accountants, they primarily report to the internal management of a
company, rather than to an external body like shareholders or tax collection agencies. In order
to become a certified management accountant, one must pass a series of tests sponsored by
the Institute of Management Accountants. These tests examine one's knowledge in four
subjects: business analysis, management accounting and reporting, strategic management, and
business applications.
, Chief Executive Officer (CEO) - correct answer ✔✔ The highest-ranking executive in a company
or organization, responsible for carrying out the policies of the board of directors on a day-to-
day basis.
Chief Financial Officer (CFO) - correct answer ✔✔ Senior-most executive responsible for
financial control and planning of a firm or project. He or she is in charge of all accounting
functions including (1) credit control, (2) preparing budgets and financial statements, (3)
coordinating financing and fund raising, (4) monitoring expenditure and liquidity, (5) managing
investment and taxation issues, (6) reporting financial performance to the board, and (7)
providing timely financial data to the CEO.
Chief Operating Officer (COO) - correct answer ✔✔ An executive responsible for (1) the day-to-
day running of the critical departments of an organization such as production, marketing and
sales, and distribution, (2) establishing procedures and processes to ensure their smooth
functioning, and (3) providing timely operational information and assistance to the CEO. Also
called general manager.
Controller - correct answer ✔✔ The chief accountant in a company or government. The
controller is the head of the accounting department and is responsible for financial and
managerial accounting. He/she helps management interpret and appropriately respond to
accounting data. A controller is also called a comptroller.
Controlling - correct answer ✔✔ One of management's primary responsibilities; evaluating the
results of business operations against the plan and making adjustments to keep the company on
track to meet its objectives.
cost-benefit analysis - correct answer ✔✔ A technique designed to determine the feasibility of a
project or plan by quantifying its costs and benefits.
cross-functional team - correct answer ✔✔ A group of people with different functional
expertise working toward a common goal. It may include people from finance, marketing,
answered
Audit Committee - correct answer ✔✔ A group of at least 3 individuals responsible for
overseeing all internal and external audit functions of a company. In addition, at least one
member must be a financial expert or have significant financial expertise. Audit committees are
responsible for selecting and appraising independent and external CPA firms to provide audit
functions. They also oversee the financial reporting process including (but not limited to)
supervising internal auditors, monitoring internal controls, and ensuring adequate compliance
with SEC and GAAP standards. Because staff on audit committees report to the board of
directors of a company, they cannot have ties to the company's management team or be in a
position where their independence can be questioned.
Board of Directors - correct answer ✔✔ Individuals elected by a corporation's shareholders to
oversee the management of the corporation. The members of a Board of Directors are paid in
cash and/or stock, meet several times each year, and assume legal responsibility for corporate
activities.
Budget - correct answer ✔✔ An estimate of costs, revenues, and resources over a specified
period, reflecting a company's expectation of future financial conditions and its goals for the
period. One of the most important administrative tools, a budget serves also as a (1) plan of
action for achieving quantified objectives, (2) standard for measuring performance, and (3)
device for coping with foreseeable adverse situations.
Management Accountant - correct answer ✔✔ An accountant who specializes in the study of
how managers use accounting and/or financial information in current or future business
decisions. Management accountants use both qualitative and quantitative information in their
work. Unlike other accountants, they primarily report to the internal management of a
company, rather than to an external body like shareholders or tax collection agencies. In order
to become a certified management accountant, one must pass a series of tests sponsored by
the Institute of Management Accountants. These tests examine one's knowledge in four
subjects: business analysis, management accounting and reporting, strategic management, and
business applications.
, Chief Executive Officer (CEO) - correct answer ✔✔ The highest-ranking executive in a company
or organization, responsible for carrying out the policies of the board of directors on a day-to-
day basis.
Chief Financial Officer (CFO) - correct answer ✔✔ Senior-most executive responsible for
financial control and planning of a firm or project. He or she is in charge of all accounting
functions including (1) credit control, (2) preparing budgets and financial statements, (3)
coordinating financing and fund raising, (4) monitoring expenditure and liquidity, (5) managing
investment and taxation issues, (6) reporting financial performance to the board, and (7)
providing timely financial data to the CEO.
Chief Operating Officer (COO) - correct answer ✔✔ An executive responsible for (1) the day-to-
day running of the critical departments of an organization such as production, marketing and
sales, and distribution, (2) establishing procedures and processes to ensure their smooth
functioning, and (3) providing timely operational information and assistance to the CEO. Also
called general manager.
Controller - correct answer ✔✔ The chief accountant in a company or government. The
controller is the head of the accounting department and is responsible for financial and
managerial accounting. He/she helps management interpret and appropriately respond to
accounting data. A controller is also called a comptroller.
Controlling - correct answer ✔✔ One of management's primary responsibilities; evaluating the
results of business operations against the plan and making adjustments to keep the company on
track to meet its objectives.
cost-benefit analysis - correct answer ✔✔ A technique designed to determine the feasibility of a
project or plan by quantifying its costs and benefits.
cross-functional team - correct answer ✔✔ A group of people with different functional
expertise working toward a common goal. It may include people from finance, marketing,
