ACCT 465 Managerial Controls questions with
accurate answers
Action controls can become tighter by... Ans✓✓✓ - improving
effectiveness of action tracking systems, employees who are sure their
actions will be noticed, will be affected more strongly by this system.
Constant direct supervision is one method.
- by making rewards/ punishments more significant.
Action controls only effective when: Ans✓✓✓ 1. Organizations can
determine what actions are un/desirable
2. Organizations are able to ensure that un/desirable actions do/not occur
Action controls: Ans✓✓✓ - are the most direct form of management
control because they involve taking steps to ensure that employees act in
the organizations best interest by making their actions the focus of
control.
Activity elimination: Ans✓✓✓ - Avoiding control problems with a
certain entity or activity by turning over the risks and associated profits
to a third party through subcontracting, licensing, and/or divestment
Addressing management control issues involves: Ans✓✓✓ - Reflecting
on how to influence, direct, or align employees' behaviours toward the
,achievement of organizational objectives consistent with the espoused
strategy
Advantages of financial results control systems: (4) Ans✓✓✓ -
Financial objectives are paramount in for-profit firms
- Financial Measures provide a summary of performance by aggregating
the effects of a broad range of operating activities across a broad range
of markets into a single (or few) measures
- Financial Measures are relatively precise and objective
- Cost to implement result controls small relative to other management
controls:
Automation: Ans✓✓✓ - Managers can sometimes use computers,
robots, expert systems, and other means of automation to reduce their
organization's exposure to some control problems
Behaviour emphasis: Ans✓✓✓ - Management controls are aimed at
getting employees to not only do what the company wants, but also
prevent them from doing things it does not want
Beyond budgeting: Ans✓✓✓ - Can be seen more as a management
philosphy with the key aim of increasing adaptability
, - Works best for companies with simple organizational structures, flat
hierarchies, and are in industries with a lot of similar companies to
benchmark against
Budget Focuses approach to contingency, scenario and what-if planning:
Ans✓✓✓ - Set multiple budget target levels: optimistic, realistic, worst
case
- Ensures targets are flexible to uncertainty and preserves the
motivational effect of fixed targets
Business Models change, so should responsibility centre structures:
Ans✓✓✓ - Need to be able to adapt to these changes
Capital budgets: Ans✓✓✓ - Involves the identification of specific
action programs (projects to be implemented and investments to be
made) + specification of resources each will consume
Causes of management control problems: (3) Ans✓✓✓ - Lack of
direction
- Motivational problems
- Personal limitations
Centralization: Ans✓✓✓ - High degrees of centralization, where all key
decisions are made at the top management levels help reduce the risk of
lower-level employees making poor judgments
accurate answers
Action controls can become tighter by... Ans✓✓✓ - improving
effectiveness of action tracking systems, employees who are sure their
actions will be noticed, will be affected more strongly by this system.
Constant direct supervision is one method.
- by making rewards/ punishments more significant.
Action controls only effective when: Ans✓✓✓ 1. Organizations can
determine what actions are un/desirable
2. Organizations are able to ensure that un/desirable actions do/not occur
Action controls: Ans✓✓✓ - are the most direct form of management
control because they involve taking steps to ensure that employees act in
the organizations best interest by making their actions the focus of
control.
Activity elimination: Ans✓✓✓ - Avoiding control problems with a
certain entity or activity by turning over the risks and associated profits
to a third party through subcontracting, licensing, and/or divestment
Addressing management control issues involves: Ans✓✓✓ - Reflecting
on how to influence, direct, or align employees' behaviours toward the
,achievement of organizational objectives consistent with the espoused
strategy
Advantages of financial results control systems: (4) Ans✓✓✓ -
Financial objectives are paramount in for-profit firms
- Financial Measures provide a summary of performance by aggregating
the effects of a broad range of operating activities across a broad range
of markets into a single (or few) measures
- Financial Measures are relatively precise and objective
- Cost to implement result controls small relative to other management
controls:
Automation: Ans✓✓✓ - Managers can sometimes use computers,
robots, expert systems, and other means of automation to reduce their
organization's exposure to some control problems
Behaviour emphasis: Ans✓✓✓ - Management controls are aimed at
getting employees to not only do what the company wants, but also
prevent them from doing things it does not want
Beyond budgeting: Ans✓✓✓ - Can be seen more as a management
philosphy with the key aim of increasing adaptability
, - Works best for companies with simple organizational structures, flat
hierarchies, and are in industries with a lot of similar companies to
benchmark against
Budget Focuses approach to contingency, scenario and what-if planning:
Ans✓✓✓ - Set multiple budget target levels: optimistic, realistic, worst
case
- Ensures targets are flexible to uncertainty and preserves the
motivational effect of fixed targets
Business Models change, so should responsibility centre structures:
Ans✓✓✓ - Need to be able to adapt to these changes
Capital budgets: Ans✓✓✓ - Involves the identification of specific
action programs (projects to be implemented and investments to be
made) + specification of resources each will consume
Causes of management control problems: (3) Ans✓✓✓ - Lack of
direction
- Motivational problems
- Personal limitations
Centralization: Ans✓✓✓ - High degrees of centralization, where all key
decisions are made at the top management levels help reduce the risk of
lower-level employees making poor judgments
