Cost Accounting, 13e (Horngren et al.

) Chapter 1 The Accountant's Role in the Organization

1) Management accounting information focuses on external reporting. Answer: FALSE Explanation: Management accounting information focuses on internal reporting.
Diff: 1 Terms: management accounting Objective: 1 AACSB: Reflective thinking

2) Cost management is narrowly focuse on a continuous re uction of costs. Answer: FALSE Explanation: Cost management is !roa ly focuse to pro"i e information t#at #elps managers at all le"els implement$ monitor$ an e"aluate company strategies.
Diff: 2 Terms: cost management Objective: 1 AACSB: Anal tical skills

%) Managers always re&uire t#e information in an accounting system to !e presente in t#e same format. Answer: FALSE Explanation: 'n i"i ual managers often re&uire t#e information in an accounting system to !e presente or reporte
Diff: 1 Terms:

ifferently.

management accounting Objective: 1 AACSB: Anal tical skills

() Mo ern cost accounting plays a significant role in management ecision ma)ing. Answer: *+,E
Diff: 1 Terms: cost accounting Objective: 1 AACSB: Anal tical skills

-) *#e !alance s#eet$ income statement$ an statement of cas# flows are use for financial accounting$ !ut not for management accounting. Answer: FALSE Explanation: *#e !alance s#eet$ income statement$ an statement of cas# flows are use for financial accounting an also for management accounting.
Diff: 1 Terms: financial accounting Objective: 1 AACSB: Anal tical skills

.) Financial accounting is !roa er in scope t#an management accounting. Answer: FALSE Explanation: 2

Management accounting is !roa er in scope t#an financial accounting.

Diff: 2 Terms: financial accounting! management accounting Objective: 1 AACSB: Reflective thinking

/) Cost accounting measures an reports s#ort-term$ long-term$ financial$ an nonfinancial information. Answer: *+,E
Diff: 2 Terms: cost accounting Objective: 1 AACSB: Reflective thinking

0) Cost management pro"i es information t#at #elps increase "alue for customers. Answer: *+,E
Diff: 1 Terms: cost management Objective: 1 AACSB: Reflective thinking

1) Management accounting #as to strictly follow t#e rules of generally accepte accounting principles for t#e purposes of measurement an reporting. Answer: FALSE Explanation: 'nternal measures an reports o not #a"e to follow 2AA3.
Diff: 1 Terms: management accounting Objective: 1 AACSB: "thical reasoning

14) (

An i eal ata!ase s#oul consist of ata t#at coul !e use for a single purpose only. Answer: FALSE Explanation: An i eal ata!ase s#oul !e a!le to !e use for multiple purposes.
Diff: 2 Terms: management accounting Objective: 1 AACSB: Reflective thinking

11) An Enterprise +esource 3lanning 5E+3) System is a single ata!ase t#at collects ata an fee s into applications t#at support eac# of t#e company6s !usiness acti"ities$ suc# as purc#ases$ pro uction$ istri!ution$ an sales. Answer: *+,E
Diff: 1 Terms: management accounting Objective: 1 AACSB: #se of $nformation Technolog

12) Cost accounting pro"i es information only for management accounting purposes. Answer: FALSE Explanation: Cost accounting pro"i es information for financial accounting as well as for management accounting purposes.
Diff: 1 Terms: cost accounting Objective: 1 AACSB: Reflective thinking

1%) Cost management in"ol"es long-term an s#ort-term ecisions t#at attempt to increase "alue for customers an lower costs of pro ucts or ser"ices. Answer: *+,E
Diff: 1 Terms: cost management Objective: 1 AACSB: Reflective thinking

1() Strategy oes 78* specify #ow an organi9ation matc#es its capa!ilities wit# t#e opportunities in t#e mar)etplace. Answer: FALSE Explanation: Strategy specifies #ow an organi9ation matc#es its own capa!ilities wit# t#e opportunities in t#e t#e mar)etplace to accomplis# its o!:ecti"es.
Diff: 1 Terms: strateg Objective: 2 AACSB: Reflective thinking

1-) All strategies s#oul !e e"aluate regar ing t#e resources an capa!ilities of t#e company. Answer: *+,E
Diff: 1 Terms: strateg Objective: 2 AACSB: Anal tical skills

1.) *#e !est- esigne strategies are "alua!le w#et#er or not t#ey are effecti"ely implemente . Answer: FALSE Explanation: 'mplementation is essential or t#e strategy is useless.
Diff: 1 Terms: strateg Objective: 2 AACSB: Anal tical skills

1/) *#e )ey to a company6s success is creating "alue for customers w#ile ifferentiating itself from its competitors. Answer: *+,E
Diff: 1 Terms: strateg Objective: 2 AACSB: Reflective thinking

10) *#e )ey to a company6s success is always to !e t#e low cost pro ucer in a particular in ustry. Answer: FALSE Explanation: *#e low cost pro ucer in a particular in ustry will not necessarily !e successful.
Diff: 2 Terms: strateg Objective: 2 AACSB: Reflective thinking

11) Companies generally follow one of two !asic strategies: 1) pro"i ing a &uality pro uct or ser"ice at low prices$ or 2) offering a uni&ue pro uct or ser"ice often price #ig#er t#an competing pro ucts. Answer: *+,E
Diff: 2 Terms: strateg Objective: 2 AACSB: Reflective thinking

24) Management accountants s#oul #a"e little or no role in eci ing on a company6s strategy. Answer: FALSE Explanation: Management accountants s#oul play a significant role in eci ing on a company6s strategy.
Diff: 1 Terms: strateg Objective: 2 AACSB: Reflective thinking

21) Companies can eci e on an appropriate strategy !ase strictly on internally a"aila!le information. Answer: FALSE Explanation: Companies must o!tain external information as well as internal information to eci e on an appropriate strategy.
Diff: 1 Terms: strateg Objective: 2 AACSB:

14

Reflective thinking

22) Strategic cost management escri!es cost management t#at specifically focuses on strategic issues. Answer: *+,E
Diff: 1 Terms: strategic cost management Objective: 2 AACSB: Reflective thinking

2%) ' entifying a company6s most important customers oes not #elp formulate strategy. Answer: FALSE Explanation: Management accountants #elp formulate stategy !y #elping managers answer &uestions suc# as ;<#o are our most important customers$ an #ow o we eli"er "alue to t#em=;
Diff: 1 Terms: strategic cost management Objective: 2 AACSB: Anal tical skills

2() *#e !est- esigne strategies an t#e !est- e"elope capa!ilities are useless unless t#ey are effecti"ely execute . Answer: *+,E
Diff: 1 Terms: strateg Objective: 2 AACSB: Anal tical skills

11

12

2-) *#e supply c#ain refers to t#e se&uence of !usiness functions in w#ic# customer usefulness is a e to pro ucts or ser"ices. Answer: FALSE Explanation: *#e "alue c#ain refers to t#e se&uence of !usiness functions in w#ic# customer usefulness is a e to pro ucts or ser"ices.
Diff: 1 Terms: su%%l chain Objective: & AACSB: Reflective thinking

2.) An effecti"e way to cut costs is to eliminate acti"ities t#at o not impro"e t#e pro uct attri!utes t#at customers "alue. Answer: *+,E
Diff: 1 Terms: cost management Objective: & AACSB: Reflective thinking

2/) For optimal planning success it is !est if eac# !usiness function wit#in t#e "alue c#ain is performe one at a time in se&uence. Answer: FALSE Explanation: 8ptimally$ success is ac#ie"e w#en two or more of t#e in i"i ual !usiness functions wor) concurrently as a team.
Diff: 1 Terms: value chain Objective: & AACSB: Anal tical skills

1%

20) For !est results$ cost management emp#asi9es in epen ently coor inating supply c#ain acti"ities wit#in your company an not interfering wit# ot#er companies. Answer: FALSE Explanation: Cost management emp#asi9es integrating an coor inating supply c#ain acti"ities across all companies wit#in t#e supply c#ain.
Diff: 2 Terms: cost management Objective: & AACSB: Anal tical skills

21) *ec#nological inno"ation #as le to s#orter pro uct-life cycles an a nee to !ring new pro ucts to mar)et more rapi ly. Answer: *+,E
Diff: 1 Terms: 'esign of %ro'ucts! services! or %rocesses Objective: & AACSB: #se of $nformation Technolog

%4) >ey success factors inclu e cost$ &uality$ timeliness$ an inno"ation. Answer: *+,E
Diff: 1 Terms: value chain Objective: & AACSB: Reflective thinking

1(

%1) Customers are eman ing increase le"els of performance in all aspects of t#e "alue c#ain an t#e supply c#ain. Answer: *+,E
Diff: 1 Terms: value chain Objective: & AACSB: Anal tical skills

%2) *#e "alue c#ain escri!es t#e flow of goo s$ ser"ices$ an information from t#e initial sources of materials an ser"ices to t#e eli"ery of pro ucts to consumers. Answer: *+,E
Diff: 1 Terms: value chain Objective: & AACSB: Reflective thinking

%%) *#e supply c#ain always occurs wit#in a single organi9ation. Answer: FALSE Explanation: *#e supply c#ain can inclu e organi9ations external to a single organi9ation.
Diff: 1 Terms: su%%l chain Objective: & AACSB: Anal tical skills

%() 1-

?istri!ution refers to promoting an selling pro ucts or ser"ices to customers or prospecti"e customers. Answer: FALSE Explanation: Mar)eting refers to promoting an selling pro ucts or ser"ices to customers or prospecti"e customers.
Diff: 1 Terms: 'istribution Objective: & AACSB: Communication

%-) *#e pro uction component of t#e "alue c#ain refers to ac&uiring$ coor inating$ an assem!ling resources to pro uce a pro uct or eli"er a ser"ice. Answer: *+,E
Diff: 1 Terms: %ro'uction Objective: & AACSB: Reflective thinking

%.) Management accountants mig#t pro"i e information on ecisions on w#et#er to !uy a pro uct from outsi e or manufacture it in #ouse. Answer: *+,E
Diff: 1 Terms:

cost-benefit a%%roach Objective: & AACSB: Communication

%/) 1.

>ey success factors are geare to impro"ing customer satisfaction. Answer: *+,E
Diff: 2 Terms: value chain Objective: & AACSB: Anal tical skills

%0) @alue c#ain refers to its "alue to t#e employee. Answer: FALSE Explanation: @alue c#ain refers to its "alue to t#e customer.
Diff: 1 Terms: value chain Objective: & AACSB: Reflective thinking

%1) Companies #a"e to follow strict gui elines w#en esigning a management accounting system. Answer: FALSE Explanation: *#e esign of a management accounting system s#oul !e gui e !y t#e c#allenges facing managers.
Diff: 1 Terms: management accounting Objective: & AACSB: Anal tical skills

(4) 1/

*rac)ing w#at is #appening in ot#er companies is illegal. Answer: FALSE Explanation: *rac)ing w#at is #appening in ot#er companies alerts managers to c#anges in t#eir in ustry an can !e accomplis#e in many legal ways suc# as "isiting competitor6s <e! sites an re"iewing t#eir financial statements.
Diff: 1 Terms: strateg Objective: & AACSB: Anal tical skills

(1) 'ncrease glo!al competition is placing pressure on companies to re uce costs. Answer: *+,E
Diff: 1 Terms: strateg Objective: & AACSB: Anal tical skills

(2) *#e increasing pace of tec#nological inno"ation #as resulte in longer pro uct life cycles. Answer: FALSE Explanation: *#e increasing pace of tec#nological information #as resulte in s#orter pro uct lifecycles.
Diff: 1 Terms: strateg Objective: & AACSB: #se of $nformation Technolog

(%) 10

A !ottlenec) occurs w#en t#e wor) to !e performe excee s t#e a"aila!le capacity. Answer: *+,E
Diff: 1 Terms: cost management Objective: & AACSB: Reflective thinking

11

(() *#e first step in t#e ecision-ma)ing process is to o!tain information. Answer: FALSE Explanation: *#e first step in t#e ecision-ma)ing process is to i entify t#e pro!lem an uncertainties.
Diff: 1 Terms: 'ecision mo'el Objective: ( AACSB: Reflective thinking

(-) 8ne of t#e steps in planning is ma)ing pre ictions a!out t#e future. Answer: *+,E
Diff: 1 Terms: %lanning Objective: ( AACSB: Reflective thinking

(.) 't is ifficult to control acti"ities wit#out a !u get. Answer: *+,E

Diff: 1 Terms: bu'get Objective: ( AACSB: Anal tical skills

(/) 24

*o ta)e a "antage of c#anging mar)et opportunities$ t#e annual !u get s#oul !e strictly enforce . Answer: FALSE Explanation: *o ta)e a "antage of c#anging mar)et opportunities$ t#e annual !u get s#oul !e up ate to reflect t#ose c#anges.
Diff: 2 Terms: bu'get Objective: ( AACSB: Anal tical skills

(0) A !u get is a tool use to plan an express strategy. Answer: *+,E

Diff: 2 Terms: bu'get Objective: ( AACSB: Reflective thinking

(1) *#e process of preparing a !u get forces coor ination an communication t#roug#out t#e company. Answer: *+,E
Diff: 1 Terms: bu'get Objective: ( AACSB: Communication

-4) Lin)ing rewar s to performance is a ma:or eterrent to goo management performance. Answer: 21

FALSE Explanation: Lin)ing rewar s to performance #elps to moti"ate goo management performance.
Diff: 1 Terms: control Objective: ( AACSB: Anal tical skills

22

-1) Employees pay little attention to #ow t#eir performance is measure . Answer: FALSE Explanation: Employees are "ery aware of #ow t#eir performance is measure .
Diff: 1 Terms: fee'back Objective: ( AACSB: Anal tical skills

-2) A !u get may !e use as a planning tool$ !ut not as a control tool. Answer: FALSE Explanation: A !u get may !e use as a planning tool an also as a control tool.
Diff: 1 Terms: bu'get Objective: ( AACSB: Reflective thinking

-%) Financial accounting reports financial an nonfinancial information t#at #elps managers implement company strategies. Answer: FALSE Explanation: )anagement accounting reports financial an nonfinancial information t#at #elps managers implement company strategies.
Diff: 1 Terms: financial accounting Objective: ( AACSB:

2%

Reflective thinking

-() Fee !ac) an learning #elps in t#e future ecision-ma)ing process. Answer: *+,E
Diff: 1 Terms: control Objective: ( AACSB: Communication

--) Control inclu es eci ing w#at fee !ac) to pro"i e t#at will #elp wit# future ecision ma)ing. Answer: *+,E
Diff: 1 Terms: control Objective: ( AACSB: Communication

-.) <#en a particular aspect of employee performance is measure $ employees pay more attention to it. Answer: *+,E
Diff: 2 Terms: learning Objective: ( AACSB: Anal tical skills

-/) 2(

A performance report compares actual performance to t#e amount !u gete . Answer: *+,E
Diff: 1 Terms: bu'get Objective: ( AACSB: Reflective thinking

2-

-0) Management accounting is playing an increasingly important role !y #elping managers e"elop an implement strategy. Answer: *+,E
Diff: 1 Terms: management accounting! strateg Objective: ( AACSB: Reflective thinking

-1) 't is generally easy to &uantify expecte !enefits an costs w#en applying t#e cost-!enefit approac#. Answer: FALSE Explanation: 't is c#allenging an generally costly to &uantify expecte !enefits an costs w#en applying t#e cost -!enefit approac#.
Diff: 2 Terms:

cost-benefit a%%roach Objective: * AACSB: Anal tical skills

.4) *#e purpose of a !u get is strictly tec#nical. 't oes 78* influence !e#a"ior. Answer: FALSE Explanation: *#e purpose of a !u get is !ot# tec#nical an !e#a"ioral. 't oes influence !e#a"ior.
Diff: 2 Terms: bu'get Objective: * AACSB: Reflective thinking

2.

.1) A cost concept use for external reporting purposes may not !e appropriate for internal$ routine reporting to managers. Answer: *+,E
Diff: 2 Terms: cost accounting! financial accounting Objective: * AACSB: Anal tical skills

.2) 2enerally accepte accounting principles 52AA3) re&uire t#at t#e same accounting met#o s !e use for !ot# internal an external reporting. Answer: FALSE Explanation: Accounting met#o s for internal reporting are not specifie !y 2enerally Accepte Accounting principles 52AA3)
Diff: 2 Terms: management accounting Objective: * AACSB: Reflective thinking

.%) Line management is irectly responsi!le for attaining t#e goals of t#e organi9ation. Answer: *+,E
Diff: 1 Terms: line management Objective: + AACSB: Reflective thinking

2/

.() Staff management s#oul 78* pro"i e a "ice an assistance to line management. Answer: FALSE Explanation: Management accountants$ an #uman-resources managers are examples of staff management.
Diff: 1 Terms: line management! staff management Objective: + AACSB: Communication

.-) *#e use of teams to ac#ie"e corporate o!:ecti"es is increasing. Answer: *+,E
Diff: 2 Terms: line management! staff management Objective: + AACSB: Anal tical skills

..) *#e controller is usually responsi!le for !an)ing$ s#ort- an long-term financing$ in"estments$ an cas# management. Answer: *+,E
Diff: 1 Terms: controller Objective: + AACSB: Reflective thinking

./) 20

*#e controller 5also calle t#e c#ief accounting officer) is t#e financial executi"e primarily responsi!le for !ot# management accounting an financial accounting. Answer: *+,E
Diff: 1 Terms: controller Objective: + AACSB: Reflective thinking

.0) Ay reporting an interpreting rele"ant ata$ t#e controller exerts an influence t#at impels management towar ma)ing informe ecisions. Answer: *+,E
Diff: 2 Terms: controller Objective: + AACSB: Communication

.1) *#e controller is generally a staff position. Answer: *+,E

Diff: 1 Terms: controller Objective: + AACSB: Anal tical skills

/4) Management accountants must #a"e !e#a"ioral an interpersonal s)ills. Answer: 21

*+,E
Diff: 1 Terms: controller Objective: + AACSB: Anal tical skills

%4

/1) *#e Sar!anes-8xley legislation was passe in response to a series of corporate scan als. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/2) *#e Sar!anes-8xley legislation oes 78* pro"i e a process for employees to report "iolations of illegal an unet#ical acts. Answer: FALSE Explanation: *#is legislation oes pro"i e employees wit# t#e rig#t to report "iolations.
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/%) Management accountants #a"e important et#ical responsi!ilities t#at are relate to competence$ confi entiality$ integrity$ an cre i!ility. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/() %1

A managerial accountant s#oul not isclose confi ential information to an outsi e party 5suc# as a newspaper) unless legally o!ligate to o so. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/-) 'f a managerial accountant were not )eeping up wit# current e"elopments in managerial accounting$ t#at !e#a"ior mig#t "iolate a competence stan ar of professional et#ical !e#a"ior. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/.) 'f a managerial accountant suspecte #is or #er imme iate superior of wrong oing$ t#e managerial accountant s#oul re&uest an imme iate meeting wit# t#e Aoar of ?irectors. Answer: FALSE Explanation: 'f a managerial accountant suspecte #is or #er imme iate superior of wrong oing$ t#e managerial accountant s#oul first present t#e situation to t#e next #ig#er managerial le"el.
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

%2

%%

//) *#e 'nstitute of Management Accountants pro"i es a #otline to iscuss et#ical issues. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/0) <#en face wit# a potential et#ical conflict$ t#e managerial accountant s#oul first consult any internal proce ures of t#at organi9ation. Answer: *+,E
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

/1) <#en confronte wit# a potential et#ical conflict$ a managerial accountant s#oul not contact #is or #er personal attorney concerning rig#ts an o!ligations. Answer: FALSE Explanation: <#en confronte wit# a potential et#ical conflict$ a managerial accountant s#oul contact #is or #er personal attorney concerning rig#ts an o!ligations.
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

%(

04) Most professional accounting organi9ations aroun t#e glo!e o 78* issue statements a!out professional et#ics. Answer: FALSE Explanation: Most accounting organi9ations o issue statements an some are similar to t#ose issue in t#e ,nite States.
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

01) Management accounting: A) focuses on estimating future re"enues$ costs$ an ot#er measures to forecast acti"ities an t#eir results A) pro"i es information a!out t#e company as a w#ole C) reports information t#at #as occurre in t#e past t#at is "erifia!le an relia!le ?) pro"i es information t#at is generally a"aila!le only on a &uarterly or annual !asis Answer: A
Diff: 2 Terms: management accounting Objective: 1 AACSB: Reflective thinking

%-

02) Managers use management accounting information to BBBBBBBB strategy. A) c#oose A) communicate C) implement ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: strateg Objective: 1 AACSB: Anal tical skills

0%) Financial accounting: A) focuses on t#e future an inclu es acti"ities suc# as preparing next year6s operating !u get A) must comply wit# 2AA3 5generally accepte accounting principles) C) reports inclu e etaile information on t#e "arious operating segments of t#e !usiness suc# as pro uct lines or epartments ?) is prepare for t#e use of epartment #ea s an ot#er employees Answer: A
Diff: 2 Terms: financial accounting

%.

1 AACSB: Reflective thinking

0() *#e person M8S* li)ely to use 87LC financial accounting information is a: A) factory s#ift super"isor A) "ice presi ent of operations C) current s#are#ol er ?) epartment manager Answer: C
Diff: 1 Terms: financial accounting Objective: 1 AACSB: Anal tical skills

0-) *#e person M8S* li)ely to use management accounting information is a5n): A) !an)er e"aluating a cre it application A) s#are#ol er e"aluating a stoc) in"estment C) go"ernmental taxing aut#ority ?) assem!ly epartment super"isor Answer: %/

?
Diff: 1 Terms: management accounting Objective: 1 AACSB: Anal tical skills

%0

0.) Financial accounting pro"i es t#e 3+'MA+C source of information for: A) ecision ma)ing in t#e finis#ing epartment A) impro"ing customer ser"ice C) preparing t#e income statement for s#are#ol ers ?) planning next year6s operating !u get Answer: C
Diff: 2 Terms: financial accounting Objective: 1 AACSB: Reflective thinking

0/) <#ic# of t#e following escriptors refers to management accounting information= A) 't is "erifia!le an relia!le. A) 't is ri"en !y rules. C) 't is prepare for s#are#ol ers. ?) 't pro"i es reasona!le an timely estimates. Answer: ?
Diff: 2 Terms: management accounting

%1

1 AACSB: Reflective thinking

00) <#ic# of t#e following statements refers to management accounting information= A) *#ere are no regulations go"erning t#e reports. A) *#e reports are generally elaye an #istorical. C) *#e au ience ten s to !e stoc)#ol ers$ cre itors$ an tax aut#orities. ?) 't primarily measures an recor s !usiness transactions. Answer: A
Diff: 2 Terms: management accounting Objective: 1 AACSB: Reflective thinking

01) <#ic# of t#e following groups woul !e LEAS* li)ely to recei"e etaile management accounting reports= A) stoc)#ol ers A) sales representati"es C) pro uction super"isors ?) managers Answer: (4

A
Diff: 1 Terms: management accounting Objective: 1 AACSB: Anal tical skills

14) Management accounting information inclu es: A) ta!ulate results of customer satisfaction sur"eys A) t#e cost of pro ucing a pro uct C) t#e percentage of units pro uce t#at are efecti"e ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: management accounting Objective: 1 AACSB: Reflective thinking

11) Cost accounting: A) pro"i es information on t#e efficiency of factory la!or A) pro"i es information on t#e cost of ser"icing commercial customers C) (1

pro"i es information on t#e performance of an operating i"ision ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: cost accounting Objective: 1 AACSB: Reflective thinking

12) <#ic# of t#e following types of information are use in management accounting= A) financial information A) nonfinancial information C) information focuse on t#e long term ?) All of t#ese answers are correct. Answer: ?
Diff: 2 Terms: management accounting Objective: 1 AACSB: Reflective thinking

1%) Mo ern cost accounting plays a role in: A) (2

planning new pro ucts A) e"aluating operational processes C) controlling costs ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: cost accounting Objective: 1 AACSB: Reflective thinking

1() A ata ware#ouse or info!arn: A) is reser"e for exclusi"e use !y t#e CF8 A) is primarily use for financial reporting purposes C) stores information use !y ifferent managers for multiple purposes ?) gat#ers only nonfinancial information Answer: C
Diff: 1 Terms: cost accounting Objective: 1 AACSB:

(%

Reflective thinking

1-) Cost accounting pro"i es all of t#e following EDCE3*: A) information for management accounting an financial accounting A) pricing information from mar)eting stu ies C) financial information regar ing t#e cost of ac&uiring resources ?) nonfinancial information regar ing t#e cost of operational efficiencies Answer: A
Diff: 2 Terms: cost accounting Objective: 1 AACSB: Reflective thinking

1.) Management accounting inclu es: A) implementing strategies A) e"eloping !u gets C) preparing special stu ies an forecasts ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms:

((

management accounting Objective: 1 AACSB: Reflective thinking

1/) Financial accounting is concerne 3+'MA+'LC wit#: A) external reporting to in"estors$ cre itors$ an go"ernment aut#orities A) cost planning an cost controls C) profita!ility analysis ?) pro"i ing information for strategic an tactical ecisions Answer: A
Diff: 2 Terms: financial accounting Objective: 1 AACSB: Reflective thinking

10) Financial accounting pro"i es a #istorical perspecti"e$ w#ereas management accounting emp#asi9es: A) t#e future A) past transactions C) a current perspecti"e ?) (-

reports to s#are#ol ers Answer: A

Diff: 1 Terms: financial accounting Objective: 1 AACSB: Reflective thinking

11) An Enterprise +esource 3lanning System can !est !e escri!e as: A) a collection of programs t#at use a "ariety of unconnecte A) ata!ases

a single ata!ase t#at collects ata an fee s it into applications t#at support eac# of t#e company6s !usiness acti"ities$ suc# as purc#ases$ pro uction$ istri!ution$ an sales C) a ata!ase t#at is primarily use !y a purc#asing epartment to etermine t#e correct amount of a particular supply item to purc#ase ?) a sop#isticate means of lin)ing two or more companies to facilitate t#eir planning processes Answer: A
Diff: 1 Terms: cost accounting Objective: 1 AACSB: #se of $nformation Technolog

(.

144) *#e approac#es an acti"ities of managers in s#ort-run an long-run planning an control ecisions t#at increase "alue for customers an lower costs of pro ucts an ser"ices are )nown as: A) "alue c#ain management A) enterprise resource planning C) cost management ?) customer "alue management Answer: C
Diff: 1 Terms: cost management Objective: 1 AACSB: Anal tical skills

141) <#ic# of t#e following statements concerning an organi9ation6s strategy is 78* true= A) Strategy specifies #ow an organi9ation matc#es its own capa!ilities wit# t#e opportunities in t#e mar)etplace to accomplis# its o!:ecti"es. A) Management accountants pro"i e input to #elp managers formulate strategy. C) A goo strategy will always o"ercome poor implementation. ?) Ausinesses usually follow one of two !roa strategies: offering a &uality pro uct at a low price$ or offering a uni&ue pro uct or ser"ice price #ig#er t#an t#e competition. Answer: C
Diff: 2

(/

Terms: strateg Objective: 2 AACSB: Anal tical skills

142) Strategy specifies: A) #ow an organi9ation matc#es its own capa!ilities wit# t#e opportunities in t#e mar)etplace A) stan ar proce ures to ensure &uality pro ucts C) incremental c#anges for impro"e performance ?) t#e eman create for pro ucts an ser"ices Answer: A
Diff: 2 Terms: strateg Objective: 2 AACSB: Reflective thinking

14%) <#ic# of t#e following is 78* one of t#e &uestions management accountants mig#t attempt to #elp answer in t#e formulation of strategy= A) <#o are our most important customers= A) <#at su!stitute pro ucts exist in t#e mar)etplace= C) (0

?oes t#e strategy comply wit# 2AA3 52enerally Accepte Accounting 3rinciples)= ?) <ill a e&uate cas# !e a"aila!le to implement t#e strategy= Answer: C
Diff: 2 Terms: strateg Objective: 2 AACSB: Anal tical skills

(1

14() Strategy is formulate !y answering all of t#e following EDCE3*: A) <#o are our most important customers= A) 's in ustry eman growing or s#rin)ing= C) <ill our external au itors certify our strategy= ?) Eow sensiti"e are purc#asers to price$ &uality$ an ser"ice= Answer: C
Diff: & Terms: strateg Objective: 2 AACSB: Anal tical skills

14-) 'n esigning strategy$ a company must matc# t#e opportunities an t#reats in t#e mar)etplace wit#: A) t#ose of t#e CF8 5C#ief Financial 8fficer) A) its resources an capa!ilities C) !ran ing opportunities ?) capa!ilities of current suppliers Answer: A
Diff: 2 Terms: strateg

-4

2 AACSB: Anal tical skills

14.) <#ic# of t#e following statements a!out customer "alue is 78* true= A) Customer "alue is s#own in a corporation6s !alance s#eet. A) Creating "alue for customers is an important part of planning an implementing strategy. C) Eow our pro uct eli"ers customer "alue s#oul !e etermine as part of a company6s strategy formulation. ?) 't is possi!le to simultaneously lower cost an increase customer "alue. Answer: A
Diff: 1 Terms: strateg Objective: 2 AACSB: Anal tical skills

14/) 3lace t#e four !usiness functions in t#e or er t#ey appear along t#e "alue c#ain: A = Customer ser"ice A = ?esign C = ?istri!ution ? = 3ro uction A) AA?C A) AC?A C) A?CA ?) -1

AA?C Answer: C
Diff: 2 Terms: value chain Objective: & AACSB: Reflective thinking

-2

140) +F?$ pro uction$ an customer ser"ice are !usiness functions t#at are all inclu e as part of: A) t#e "alue c#ain A) !enc#mar)ing C) mar)eting ?) t#e supply c#ain Answer: A
Diff: 1 Terms: value chain Objective: & AACSB: Anal tical skills

141) *#e "alue c#ain is t#e se&uence of !usiness functions in w#ic#: A) "alue is e ucte from t#e pro ucts or ser"ices of an organi9ation A) "alue is proportionately a e to t#e pro ucts or ser"ices of an organi9ation C) pro ucts an ser"ices are e"aluate wit# respect to t#eir "alue to t#e supply c#ain ?) usefulness is a e to t#e pro ucts or ser"ices of an organi9ation Answer: ?
Diff: 2 Terms: value chain

-%

& AACSB: Reflective thinking

114) BBBBBBBB is t#e generation of$ an experimentation wit#$ i eas relate to new pro ucts$ ser"ices$ or processes. A) +esearc# an e"elopment A)

?esign of pro ucts$ ser"ices$ or processes C) 3ro uction ?) Mar)eting Answer: A

Diff: 1 Terms: research an' 'evelo%ment Objective: & AACSB: Anal tical skills

111) BBBBBBBB is t#e etaile planning an engineering of pro ucts$ ser"ices$ or processes. A) ?istri!ution A) ?esign of pro ucts$ ser"ices$ or processes C) 3ro uction ?) Mar)eting Answer: -(

A
Diff: 1 Terms: 'esign of %ro'ucts! services! or %rocesses Objective: & AACSB: Reflective thinking

--

112) BBBBBBBB is t#e ac&uisition$ coor ination$ an assem!ly of resources to pro uce a pro uct or eli"er a ser"ice. A) +esearc# an e"elopment A)

Customer ser"ice C) 3ro uction ?) Mar)eting Answer: C

Diff: 1 Terms: %ro'uction Objective: & AACSB: Reflective thinking

11%) BBBBBBBB is t#e manner !y w#ic# companies promote an sell t#eir pro ucts or ser"ices to customers or perspecti"e customers. A) ?istri!ution A) Customer ser"ice C) +esearc# an e"elopment ?)

Mar)eting Answer: ?
Diff: 1 Terms: marketing

-.

& AACSB: Reflective thinking

11() BBBBBBBB is t#e eli"ery of pro ucts or ser"ices to customers. A) ?istri!ution A) Customer ser"ice C) 3ro uction ?) ?esign of pro ucts$ ser"ices$ or processes Answer: A
Diff: 1 Terms: 'istribution Objective: & AACSB: Reflective thinking

11-) BBBBBBBBB is t#e after-sale support pro"i e to customers. A) ?istri!ution A) Customer ser"ice C) 3ro uction ?) Mar)eting Answer: -/

A
Diff: 1 Terms: customer service Objective: & AACSB: Reflective thinking

-0

11.) BBBBBBBB is a strategy t#at integrates people an tec#nology in all !usiness functions to en#ance relations#ips wit# customers$ partners$ an istri!utors. A) Supply-c#ain analysis A) Customer relations#ip management C) @alue-c#ain analysis ?) Continuous &uality impro"ement Answer: A
Diff: 1 Terms: customer relationshi% management Objective: & AACSB: #se of $nformation Technolog

11/) Customer relations#ip management initiati"es use tec#nology to coor inate all: A) pro uction acti"ities A) researc# acti"ities C) customer-facing acti"ities ?) in"entory management acti"ities Answer: C
Diff: 1 Terms:

-1

customer relationshi% management Objective: & AACSB: #se of $nformation Technolog

110) BBBBBBBB escri!e5s) t#e flow of goo s$ ser"ices$ an information from t#e purc#ase of materials to t#e eli"ery of pro ucts to consumers$ regar less of w#et#er t#ose acti"ities occur in t#e same organi9ation or wit# ot#er organi9ations. A) Supply c#ain A) >ey success factors C) Continuous impro"ement ?) Customer focus Answer: A
Diff: 1 Terms: su%%l chain Objective: & AACSB: Reflective thinking

111) BBBBBBBB is an operational factor t#at irectly affects t#e economic "ia!ility of t#e organi9ation. A) Customer focus A) A )ey success factor C) Continuous impro"ement ?) .4

Supply c#ain Answer: A

Diff: 2 Terms: value chain Objective: & AACSB: Reflective thinking

.1

124) BBBBBBBB is a p#ilosop#y in w#ic# management impro"es operations t#roug#out t#e "alue c#ain to eli"er pro ucts an ser"ices t#at excee customer expectations. A) Cost-!enefit approac# A) Customer focus C) Customer relations#ip management ?) *otal &uality management Answer: ?
Diff: 2 Terms: -ualit Objective: & AACSB: Reflective thinking

121) <#ic# item is 78* an area t#at customers want to see impro"e le"els of performance in= A) inno"ation A) &uality C) cost an efficiency ?) profit Answer: ?
Diff: 2 Terms:

.2

su%%l chain Objective: & AACSB: Reflective thinking

122) <#ic# of t#e following statements a!out a company6s supply c#ain is true= A) A company6s supply c#ain is always internal to a firm. A) A company6s supply c#ain is always external to a firm. C) A company6s supply c#ain is t#e same t#ing as a company6s "alue c#ain. ?) Management accountants pro"i e information to en#ance a company6s supply c#ain. Answer: ?
Diff: 1 Terms: su%%l chain Objective: & AACSB: Communication

12%) Strategy s#oul focus 3+'MA+'LC on t#e organi9ation6s: A) s#are#ol ers A) customers C) pro ucts ?) .%

employees Answer: A
Diff: 2 Terms: strateg Objective: & AACSB: Reflective thinking

.(

12() <#ose perceptions of t#e company6s pro ucts or ser"ices are t#e most important to t#e manager= A) !oar of irectors6 perception A) customers6 perception C) presi ent6s perception ?) stoc)#ol ers6 perception Answer: A
Diff: 2 Terms: strateg Objective: & AACSB: Reflective thinking

12-) *o !e successful$ a company nee s to !e: A) customer ri"en A) ; ri"en; !y t#e !oar of irectors C) employee ri"en ?) management ri"en Answer: A
Diff: 2 Terms: strateg

.-

& AACSB: Reflective thinking

12.) Customers are eman ing impro"e performance relate to: A) re uce costs A) !ot# re uce costs an increase &uality C) lower costs$ impro"e &uality$ an impro"e customer ser"ice ?) All of t#ese answers are correct. Answer: ?
Diff: 2 Terms: strateg Objective: & AACSB: Anal tical skills

12/) Customer response time in"ol"es: A) t#e spee it ta)es a customer to respon to an a "ertisement an place an or er A) t#e spee at w#ic# an organi9ation respon s to customer re&uests C) t#e spee it ta)es to e"elop a new pro uct ?) t#e spee it ta)es an organi9ation to e"elop a *otal Guality Management 5*GM) program Answer: ..

A
Diff: 2 Terms: strateg Objective: & AACSB: Reflective thinking

120) <#ic# of t#e following is 78* a way for a company to impro"e customer response time= A) 'ncrease capacity of !ottlenec) operations. A) 3urc#ase material in larger &uantities. C) ,se faster eli"ery proce ures. ?) 3ro uce t#e pro uct more &uic)ly. Answer: A
Diff: 2 Terms: strateg Objective: & AACSB: Anal tical skills

121) 3lace t#e fi"e steps in t#e ecision-ma)ing process in t#e correct or er: A = 8!tain information A = Ma)e ecisions !y c#oosing among alternati"es C = ' entify t#e pro!lem an uncertainties ? = 'mplement t#e ecision E = Ma)e pre ictions a!out t#e future A) ?AEAC ./

A) E?AAC C) CAEA? ?) AEA?C Answer: C

Diff: 2 Terms: 'ecision mo'el Objective: ( AACSB: Reflective thinking

1%4) 3lanning consists of all of t#ese areas EDCE3*: A) selecting organi9ational goals A) eci ing #ow to attain t#e esire goals C) e"aluating performance ?) pre icting results un er "arious alternati"es Answer: C
Diff: 2 Terms: %lanning Objective: ( AACSB: Reflective thinking

.0

1%1) *#e most important planning tool is a BBBBBBBB. A) performance e"aluation report A) !alance scorecar C) goal ?) !u get Answer: ?
Diff: 2 Terms: bu'get Objective: ( AACSB: Anal tical skills

1%2) A report s#owing t#e actual financial results for a perio compare to t#e !u gete financial results for t#at same perio woul most li)ely !e calle a: A) strategic plan A) management forecast C) performance report ?) re"ise plan Answer: C
Diff: 1 Terms:

.1

bu'get Objective: ( AACSB: Reflective thinking

/4

1%%) *#e process of preparing a !u get: A) forces coor ination an communication across !usiness functions A) increases accounting efficiencies C) re uces o"ercapacity ?) promotes pro uction automation Answer: A
Diff: 2 Terms: bu'get Objective: ( AACSB: Anal tical skills

1%() Control inclu es: A) implementing planning ecisions A) e"aluating performance C) pro"i ing fee !ac) to #elp wit# future ecision ma)ing ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: control

/1

( AACSB: Reflective thinking

1%-) A !u get: A) is a &uantitati"e expression of a propose management plan A) #elps translate strategy into actions C) ai s in t#e coor ination an communication among "arious !usiness functions ?) All of t#ese answers are correct. Answer: ?
Diff: 1 Terms: bu'get Objective: ( AACSB: Reflective thinking

1%.) A !u get can ser"e as: A) a planning tool A) a control tool C) a !asis for preparing financial statements ?) a planning an control tool Answer: /2

?
Diff: 1 Terms: bu'get Objective: ( AACSB: Anal tical skills

1%/) Employees BBBBBBBB #ow t#eir performance is measure . A) pay close attention to A) pay no attention to C) rarely )now ?) Aot# A an C are correct. Answer: A
Diff: 1 Terms: control Objective: ( AACSB: Reflective thinking

1%0) Lin)ing rewar s to performance: A) #elps to moti"ate managers A) allows companies to c#arge premium prices C) /%

s#oul only !e !ase on financial information ?) All of t#ese answers are correct. Answer: A
Diff: 2 Terms: control Objective: ( AACSB: Anal tical skills

1%1) Control measures s#oul : A) !e set an not c#ange until t#e next !u get cycle A) !e flexi!le to allow for employees w#o are slac)ers C) !e )ept confi ential from employees so t#at competitors on6t #a"e an opportunity to gain a competiti"e a "antage ?) !e lin)e !y fee !ac) to planning Answer: ?
Diff: 2 Terms: control Objective: ( AACSB: Reflective thinking

1(4) A well-concei"e plan allows managers t#e a!ility to: A) /(

not ma)e ecisions again until t#e next planning session A) )eep lower-le"el managers from implementing c#ange C) un erestimate costs so t#at actual operating results will !e fa"ora!le w#en comparisons are ma e ?) ta)e a "antage of unforeseen opportunities Answer: ?
Diff: 2 Terms: %lanning Objective: ( AACSB: Anal tical skills

1(1) <#ic# of t#e following statements concerning performance reports is 78* correct= A) *#e performance report s#ows actual performance as compare to t#e !u get. A) *#e performance report is a fee !ac) tool. C) *#e performance report often lea s to more in"estigations an action. ?) *#e performance report contains no actual results ue to confi entiality. Answer: ?
Diff: 2 Terms: bu'get Objective: ( AACSB:

/-

Reflective thinking

/.

1(2) Management accounting is consi ere successful w#en it: A) #elps cre itors e"aluate t#e company6s performance A) #elps managers impro"e t#eir ecisions C) is accurate ?) is rele"ant an reporte annually Answer: A
Diff: 2 Terms: management accounting Objective: ( AACSB: Anal tical skills

1(%) <#ic# item is 78* a gui eline use !y management accountants to assist in strategic an operational ecision ma)ing= A) cost-!enefit approac# A) !e#a"ioral an tec#nical consi erations C) ifferent costs for ifferent purposes ?) !alance scorecar Answer: ?
Diff: 2 Terms: management accounting

//

* AACSB: Reflective thinking

1(() *#e scenario t#at resources s#oul !e spent if t#e expecte !enefits to t#e company excee t#e expecte costs escri!es: A) cost-!enefit approac# A) !e#a"ioral an tec#nical consi erations C) !alance scorecar ?) ifferent costs for ifferent purposes Answer: A
Diff: 2 Terms:

cost-benefit a%%roach Objective: * AACSB: Reflective thinking

1(-) *#e act of simply measuring an reporting information: A) focuses t#e attention of employees on t#ose processes A) i"erts employee6s attention to ot#er acti"ities C) ispro"es t#e saying ;<#at gets measure gets manage .; ?) #as no effect on employee !e#a"ior Answer: /0

A
Diff: 2 Terms: control! learning Objective: * AACSB: Anal tical skills

/1

1(.) <#ic# statement is FALSE= A) ;<#at gets measure gets manage .; A) 3eople react to measurements. C) Employees spen more attention on t#ose "aria!les t#at are not getting measure . ?) ;'f ' can6t measure it$ ' can6t manage it.; Answer: C
Diff: 2 Terms: control! learning Objective: * AACSB: Anal tical skills

1(/) *#e 3+'MA+C criterion w#en face wit# a resource allocation ecision is: A) cost minimi9ation A) re uction in t#e amount of time re&uire to perform a particular :o! C) ac#ie"ement of organi9ational goals ?) #ow well t#e alternati"e options #elp ac#ie"e organi9ational goals in relation to t#e costs incurre for t#ese systems Answer: ?
Diff: & Terms:

04

cost-benefit a%%roach Objective: * AACSB: Anal tical skills

1(0) <#ic# of t#e following statements a!out t#e cost-!enefit approac# is *+,E= A) +esources s#oul !e spent if t#ey are expecte to !etter attain company goals in relation to t#e expecte costs of t#ese resources. A) 'n a cost-!enefit analysis$ !ot# costs an !enefits are easy to o!tain. C) +esources s#oul !e spent if t#e costs of a ecision outweig# t#e !enefits of t#e ecision. ?) A cost-!enefit approac# woul not !e appropriate for a ecision to install a !u get system or not. Answer: A
Diff: 2 Terms:

cost-benefit a%%roach Objective: * AACSB: Reflective thinking

1(1) *#e person5s) irectly responsi!le for attaining of organi9ational o!:ecti"es isHare: A) t#e treasurer A) line management C) t#e controller ?) 01

t#e c#ief financial officer Answer: A

Diff: 1 Terms: line management Objective: + AACSB: Reflective thinking

02

1-4) *#e person5s) responsi!le for pro"i ing a "ice an assistance to line managers isHare: A) t#e controller A) t#e c#ief financial officer C) staff management ?) t#e treasurer Answer: C
Diff: 1 Terms: staff management Objective: + AACSB: Reflective thinking

1-1) As teamwor) #as !ecome more prominent in t#e last few years$ ifferences !etween staff an line management: A) #a"e increase A) #a"e !ecome more important relati"e to promotions C) #a"e iminis#e ?) #a"e only !een e"i ent in t#e employee rewar system Answer: C
Diff: 2 Terms: line management! staff management

0%

+ AACSB: Communication

1-2) *#e 'nstitute of Management Accountants 5'MA): A) is a professional organi9ation of management accountants A) is a professional organi9ation of financial accountants C) is a professional su!si iary of t#e Financial Accounting Stan ar s Aoar 5FASA) ?) issues stan ar s for financial accounting Answer: A
Diff: 2 Terms: management accounting Objective: + AACSB: Anal tical skills

1-%) Line management inclu es: A) manufacturing managers A) #uman-resource managers C) information-tec#nology managers ?) management-accounting managers Answer: 0(

A
Diff: 2 Terms: line management Objective: + AACSB: Anal tical skills

0-

1-() Staff management inclu es: A) manufacturing managers A) #uman-resource managers C) purc#asing managers ?) istri!ution managers Answer: A
Diff: 2 Terms: staff management Objective: + AACSB: Anal tical skills

1--) +esponsi!ilities of a CF8 inclu e all of t#e following EDCE3*: A) pro"i ing financial reports to s#are#ol ers A) managing s#ort-term an long-term financing C) in"esting in new e&uipment ?) preparing fe eral$ state$ an international tax returns Answer: C
Diff: & Terms: chief financial officer .C/O0

0.

+ AACSB: Reflective thinking

1-.) *#e BBBBBBBB is primarily responsi!le for management accounting an financial accounting. A) C88 5C#ief 8perating 8fficer) A) C'8 5C#ief 'nformation 8fficer) C) treasurer ?) controller Answer: ?
Diff: 1 Terms: controller Objective: + AACSB: Anal tical skills

1-/) All of t#e following report to t#e CF8 EDCE3* t#e: A) controller A) tax epartment manager C) pro uction manager ?) treasurer Answer: 0/

C
Diff: 1 Terms: chief financial officer .C/O0 Objective: + AACSB: Reflective thinking

1-0) Examples of t#e controller6s functions inclu e all EDCE3*: A) operations a ministration A) !u geting C) in"estor relations ?) general le ger Answer: C
Diff: 1 Terms: controller Objective: + AACSB: Reflective thinking

1-1) Management accounting is an integral part of t#e BBBBBBBB function in an organi9ation. A) treasurer6s A) controller6s C) 00

internal au it ?) presi ent6s Answer: A

Diff: 1 Terms: management accounting! controller Objective: + AACSB: Reflective thinking

1.4) <#ic# of t#e following issues is 78* a resse !y t#e Sar!anes-8xley legislation= A) impro"ing internal control A) corporate go"ernance C) isclosure practices of pu!lic corporations ?) isclosure practices of pri"ate companies Answer: ?
Diff: 1 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1.1) *#e Stan ar s of Et#ical Con uct for management accountants inclu e concepts relate to: A) 01

competence$ performance$ integrity$ an reporting A) competence$ confi entiality$ integrity$ an cre i!ility C) experience$ integrity$ reporting$ an o!:ecti"ity ?) 7one of t#ese answers are correct. Answer: A
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1.2) <#ic# item is 78* an in ication of competence un er t#e Stan ar s of Et#ical Con uct= A) Maintain an appropriate le"el of professional expertise !y continually e"eloping )nowle ge an s)ills. A) >eep information confi ential except w#en isclosure is aut#ori9e or legally re&uire . C) 3erform professional uties in accor ance wit# rele"ant laws$ regulations$ an tec#nical stan ar s. ?) 3ro"i e ecision support information an recommen ations t#at are accurate$ clear$ concise$ an timely. Answer: A
Diff: 2 Terms: %rofessional ethics Objective: , AACSB:

14

"thical reasoning

11

1.%) <#ic# item is 78* an in ication of confi entiality un er t#e Stan ar s of Et#ical Con uct= A) >eep information confi ential except w#en isclosure is aut#ori9e or legally re&uire . A) 'nform all rele"ant parties regar ing appropriate use of confi ential information. C) +efrain from using confi ential information for unet#ical or illegal a "antage. ?) All of t#e a!o"e in icate confi entiality. Answer: ?
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1.() <#ic# item is an in ication of integrity un er t#e Stan ar s of Et#ical Con uct= A) +efrain from engaging in any con uct t#at woul pre:u ice carrying out uties et#ically. A) Communicate information fairly an o!:ecti"ely. C) >eep information confi ential except w#en isclosure is aut#ori9e or legally re&uire . ?) +ecogni9e an communicate professional limitations or ot#er constraints t#at woul preclu e responsi!le :u gment or successful performance of an acti"ity. Answer: A
Diff: 2 Terms:

12

%rofessional ethics Objective: , AACSB: "thical reasoning

1.-) <#ic# item is an in ication of cre i!ility un er t#e Stan ar s of Et#ical Con uct= A) Maintain an appropriate le"el of professional expertise !y continually e"eloping )nowle ge an s)ills. A) +efrain from using confi ential information for unet#ical or illegal a "antage. C) A!stain from engaging in or supporting any acti"ity t#at mig#t iscre it t#e profession. ?) ?isclose elays or eficiencies in information$ timeliness$ processing$ or internal controls in conformance wit# organi9ation policy an Hor applica!le law. Answer: ?
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1..) Et#ical c#allenges for management accountants inclu e: A) w#et#er to accept gifts from suppliers$ )nowing it is an effort to in irectly influence ecisions A) w#et#er to report unfa"ora!le epartment information t#at may result in unfa"ora!le conse&uences for a frien C) w#et#er to file a tax return t#is year ?) 1%

Aot# A an A are correct. Answer: ?

Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1(

1./) <#ic# of t#e following actions s#oul a management accountant ta)e first in confronting a potential et#ical conflict concerning your irect super"isor= A) 'nform t#e Aoar of ?irectors of t#e existence of a potential conflict. A) Confront t#e super"isor irectly. C) ?iscuss t#e situation wit# your super"isor6s irect super"isor. ?) +e"iew your organi9ation6s proce ures concerning resolution of suc# a conflict. Answer: ?
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1.0) 'f t#ere is an et#ical conflict concerning your irect super"isor$ you may contact all of t#e following groups EDCE3*: A) local me ia A) au it committee C) executi"e committee ?) !oar of irectors Answer: A
Diff: 2 Terms:

1-

%rofessional ethics Objective: , AACSB: "thical reasoning

1.1) 'f t#ere is an et#ical conflict concerning your irect super"isor$ w#en is it appropriate to contact aut#orities or in i"i uals not employe !y t#e organi9ation= A) w#en t#ere is a personal conflict A) w#en your super"isor is a!out to recei"e a !onus C) w#en t#ere is a clear "iolation of t#e law ?) w#en you are a!out to !e terminate Answer: C
Diff: 2 Terms: %rofessional ethics Objective: , AACSB: "thical reasoning

1/4) For eac# report liste !elow$ i entify w#et#er t#e ma:or purpose of t#e report is for 51) routine internal reporting$ 52) nonroutine internal reporting$ or for 5%) external reporting to in"estors an ot#er outsi e parties. Item a. stu y etailing sale information of t#e top-ten selling pro ucts !. wee)ly report of total sales generate !y eac# store in t#e metropolitan area c. annual +eport sent to s#are#ol ers . mont#ly report comparing !u gete sales !y store to actual sales Answer: a. !. c. . 52) nonroutine internal reporting 51) routine internal reporting 5%) external reporting to in"estors an ot#er outsi e parties 51) routine internal reporting 1.

Diff: 2 Terms: management accounting Objective: 1 AACSB: Anal tical skills

1/1) <#ic# &uestions o management accountants #elp answer in t#e strategy formulation process= Answer: 1. 2. %. (. <#o are our most important customers$ an #ow o we eli"er "alue to t#em= <#at su!stitute pro ucts exist in t#e mar)etplace$ an #ow o t#ey iffer from our pro uct in terms of price an &uality= <#at is our most critical capa!ility= <ill a e&uate cas# !e a"aila!le to fun t#e strategy$ or will a itional fun s nee to !e raise =
Diff: 2 Terms: strateg Objective: 2 AACSB: Anal tical skills

1/2) Classify eac# cost item into one of t#e !usiness functions of t#e "alue c#ain$ eit#er 51) +F?$ 52) esign$ 5%) pro uction$ 5() mar)eting$ 5-) istri!ution$ or 5.) customer ser"ice. Item a. cost of samples maile to promote sales of a new pro uct !. la!or cost of wor)ers in t#e manufacturing plant c. !onus pai to a person wit# a 14I satisfaction rating in #an ling customers wit# complaints . transportation costs for s#ipping pro ucts to retail outlets Answer: a. !. c. . 5() mar)eting 5%) pro uction 5.) customer ser"ice 5-) istri!ution
Diff: 2 Terms: value chain Objective: & AACSB:

1/

Anal tical skills

1/%) Classify eac# cost item of +ipon 3rinters into one of t#e !usiness functions of t#e "alue c#ain$ eit#er 51) +F?$ 52) esign$ 5%) pro uction$ 5() mar)eting$ 5-) istri!ution$ or 5.) customer ser"ice. Item a. cost of customer or er forms !. cost of paper use in manufacture of !oo)s c. cost of paper use in pac)ing cartons to s#ip !oo)s . cost of paper use in isplay at national tra e s#ow e. epreciation of truc)s use to transport !oo)s to college !oo)stores f. cost of t#e woo use to manufacture paper g. salary of t#e scientists attempting to fin anot#er source of printing in) #. cost of efining t#e !oo) si9e so t#at a stan ar -si9e !ox is fille to capacity Answer: a. !. c. . e. f. g. #. 5() mar)eting 5%) pro uction 5-) istri!ution 5() mar)eting 5-) istri!ution 5%) pro uction 51) researc# an 52) esign
Diff: 2 Terms: value chain Objective: & AACSB: Anal tical skills

e"elopment

10

1/() 'n or er$ list t#e fi"e steps in t#e ecision-ma)ing process. Answer: 1. 2. %. (. -. ' entify t#e pro!lem an uncertainties 8!tain information Ma)e pre ictions a!out t#e future Ma)e ecisions !y c#oosing among alternati"es 'mplement t#e ecision$ e"aluate performance$ an learn
Diff: 2 Terms: 'ecision mo'el Objective: ( AACSB: Anal tical skills

1/-) For eac# type of report liste !elow$ i entify one planning ecision an one controlling ecision for w#ic# t#e information woul !e #elpful. Assume you are a <algreen Company store. Item a. annual financial statements for t#e past t#ree years !. report etailing sales !y epartment !y eac# #our of t#e ay for t#e past wee) c. special stu y regar ing increase roa traffic ue to t#e construction of a new s#opping mall at a near -!y intersection Answer: 3lease note t#at answers will "ary$ !ut may inclu e t#e following: a. 3lanning: ?ecision !y s#are#ol er a!out w#et#er to purc#ase more stoc) in t#e company. Control: ?ecision !y !an) to etermine if financial ratios maintaine in t#e line-of-cre it 5L8C) agreement warrant increasing t#e L8C amount. !. c. 3lanning: ?ecisions regar ing future staffing nee s. Control: ?ecision regar ing w#et#er t#e recent sales promotion le to an increase in re"enue. 3lanning: ?ecision of t#e store manager a!out w#et#er to c#ange t#e types of retail items carrie . Control: ?ecision of t#e store manager regar ing performance of t#e analyst t#at prepare t#e special stu y.
Diff: & Terms: %lanning! control Objective: ( AACSB: Anal tical skills

1/.) List t#e four stan ar s of et#ical con uct for management accountants. For eac# stan ar $ gi"e an example t#at emonstrates 11

compliance wit# t#at stan ar . Answer: 3lease note t#at answers may "ary$ !ut may inclu e t#e following: 1. 2. %. (. Competence: Maintain an appropriate le"el of professional expertise !y continually e"eloping )nowle ge an s)ills Confi entiality: +efrain from using confi ential information for unet#ical or illegal a "antage

'ntegrity: A!stain from engaging in or supporting any acti"ity t#at mig#t iscre it t#e profession Cre i!ility: Communicate information fairly an o!:ecti"ely
Diff: & Terms:

%rofessional ethics Objective: , AACSB: "thical reasoning

144

1//) ?escri!e management accounting an financial accounting. Answer: Management accounting pro"i es information to internal ecision ma)ers of t#e !usiness suc# as top executi"es$ managers$ sales representati"es$ an pro uction super"isors. 'ts purpose is to #elp managers pre ict an e"aluate future results. +eports are generate often an usually !ro)en own into smaller reporting i"isions suc# as epartment or pro uct line. *#ere are no rules to !e complie wit# since t#ese reports are for internal use only. Management accounting em!races more extensi"ely suc# topics as t#e e"elopment an implementation of strategies an policies$ !u geting$ special stu ies an forecasts$ influence on employee !e#a"ior$ an nonfinancial as well as financial information. Financial accounting$ !y contrast$ pro"i es information to external ecision ma)ers suc# as in"estors an cre itors. 'ts purpose is to present a fair picture of t#e financial con ition of t#e company. +eports are generate &uarterly or annually an report on t#e company as a w#ole. *#e financial statements must comply wit# 2AA3 5generally accepte accounting principles). A C3A au its$ or "erifies$ t#at t#e 2AA3 are !eing followe .
Diff: 2 Terms: management accounting Objective: 1 AACSB: Reflective thinking

1/0) 's financial accounting or management accounting more useful to an operations manager= <#y= Answer: Management accounting is more useful to an operations manager !ecause management accounting reports operating results !y epartment or unit rat#er t#an for t#e company as a w#ole$ it inclu es financial as well as nonfinancial ata suc# as on -time eli"eries an cycle times$ an it inclu es &uantitati"e as well as &ualitati"e ata suc# as t#e type of rewor) t#at was nee e on efecti"e units.
Diff: & Terms: management accounting Objective: 1 AACSB: Reflective thinking

1/1) 's it possi!le to #a"e an acti"e cost management program wit#out an Enterprise +esource 3lanning 5E+3) System= Answer: Ces$ an acti"e cost management program can occur wit#out an Enterprise +esource 3lanning 5E+3) System. Cost management is a p#ilosop#y t#at gui es management in t#eir s#ort-run an long-run planning an control ecisions t#at increase "alue for customers an lower costs of pro ucts an ser"ices. Cost management is not epen ent on any particular system or ata!ase$ !ut it is rat#er an o"erall p#ilosop#y of operation.
Diff: 2 Terms:

141

cost management Objective: 1 AACSB: Reflective thinking

104) <#at competiti"e a "antage coul a company o!tain from a successful cost management program= Answer: *#ere are t#ree !roa outcomes from a successful cost management program: 1) costs are re uce wit# no loss in customer "alue. 'n t#is scenario$ a company mig#t gain a competiti"e a "antage !y lowering its price wit# no loss in profit$ or maintain t#e same price an increase profitJ 2) customer "alue is increase wit# no c#ange in costs. *#is scenario mig#t increase customer satisfaction resulting in increase customer loyalty an per#aps increase t#e o"erall eman for t#e pro uctJ %) customer "alue mig#t !e increase w#ile costs are re uce simultaneously. *#is scenario woul result in t#e !enefits escri!e in !ot# 1) an 2).
Diff: 2 Terms: cost management Objective: 1 AACSB: Reflective thinking

101) <#at is strategy= Ariefly escri!e t#e two !roa types of strategies t#at companies may c#oose to pursue. Answer: Strategy specifies #ow an organi9ation matc#es its own capa!ilities wit# t#e opportunities in t#e mar)etplace to accomplis# its o!:ecti"es. 'n ot#er wor s$ strategy escri!es #ow a company will compete. Companies follow one of two !roa strategies. 8ne is pro"i e a -ualit pro uct or ser"ice at lo1 prices. *#e ot#er is to compete on t#eir a!ility to offer a uni-ue pro uct or ser"ice t#at is generally offere at a higher price.
Diff: 2 Terms: strateg Objective: 2 AACSB: Reflective thinking

102) Ariefly escri!e #ow managers ma)e use of management accounting information. Answer: 87E: *o c#oose strateg $ to communicate it$ an to etermine #ow !est to implement it. 142

*<8: *o %lan !usiness operations relate to esigning$ pro ucing$ an mar)eting a pro uct or ser"ice. *#is inclu es preparing !u gets an etermining t#e prices an cost of pro ucts an ser"ices. A company must )now t#e cost of eac# pro uct an ser"ice to eci e w#ic# pro ucts to offer an w#et#er to expan or iscontinue pro uct lines. *E+EE: *o control !usiness operations t#at inclu es comparing actual results to t#e !u gete results an ta)ing correcti"e action w#en nee e .
Diff: 2 Terms: strateg ! %lanning Objective: 2 AACSB: Reflective thinking

14%

10%) 2enerally$ companies follow one of two !roa strategies: offering a &uality pro uct at a low price$ or offering a uni&ue pro uct or ser"ice price #ig#er t#an t#e competition. Assume you are opening a small foo outlet across t#e street from your campus. Eow mig#t t#at !usiness !e operate un er eac# of t#e two !roa strategies= Consi er t#e following specific operational areas: a. !. c. . e. f. target customers pro ucts offere pro uct pricing location c#oice a "ertising content a "ertising me ia Answer:

*#e purpose of t#is &uestion is to explore some of t#e ifferences in !usiness operations as a result of a !roa strategic c#oice. Answers will iffer from stu ent to stu ent$ !ut you s#oul see some specific t#emes. 8perational Area *arget customers ?ifferential Strategy *arget customers mig#t !e more wealt#y stu ents$ faculty$ or per#aps neig#!ors w#o li"e near!y. 3ro ucts offere Few pro ucts$ #ea"y emp#asis on Eig# &uality pro ucts$ pro!a!ly a tig#t cost control$ pro!a!ly set up reasona!le c#oice$ restaurant as a #ig# "olume operation. mig#t #a"e a lot of am!ience. 3ro uct pricing 3rice at or lower t#an t#e Eig#er price pro ucts. competition in t#e area. Location c#oice Con"enient to t#e target 7ot as con"enient$ per#aps in a customers. #ig#er-en s#opping or entertainment area. Customers mig#t see) out t#e #ig# &uality an !e willing to tra"el a !it for it. A "ertising content A "ertising woul emp#asi9e t#e A "ertising woul emp#asi9e low price of t#e pro ucts offere . &uality or am!ience. A "ertising me ia Me ia t#at woul !e loo)e at !y Me ia t#at woul !e loo)e at !y t#e target customers$ suc# as t#e target customer$ local stu ent newspapers. maga9ines an newspapers.
Diff: & Terms: strateg Objective: 2 AACSB: Reflective thinking

Low 3rice Strategy *arget customers mig#t !e stu ents on a tig#t !u get

14(

10() 2enerally$ companies follow one of two !roa strategies: offering a &uality pro uct at a low price$ or offering a uni&ue pro uct or ser"ice price #ig#er t#an t#e competition. 's it possi!le to follow a strategy t#at is ;in t#e mi le;= Answer: *#ere is some ispute a!out t#e correct answer to t#is &uestion. Some will argue t#at it is not goo for companies to get ;caug#t in t#e mi le; !ecause t#e customer mig#t get confuse as to w#et#er or not t#e company is competing on price or is trying to ma)e some ot#er appeal. 'f t#e customer is confuse a!out #ow t#e company is gi"ing t#em "alue$ t#ey mig#t percei"e t#ey are getting no "alue an a!an on t#e pro uct to a competitor wit# a clearer customer "alue proposition. *#e ot#er si e of t#e argument is t#at cost management is a necessary part of any strategy an e"en if t#e company c#ooses to pursue a ifferential strategy$ management of t#e company s#oul always !e see)ing ways to manage costs an increase customer "alue simultaneously regar less of t#eir strategy. *#e stu ent s#oul !e a!le to articulate one or t#e ot#er arguments co#erently.
Diff: 2 Terms: strateg Objective: 2 AACSB: Reflective thinking

10-) ?escri!e t#e "alue c#ain an #ow it can #elp organi9ations !ecome more effecti"e. Answer: A "alue c#ain is a se&uence of !usiness functions w#ose o!:ecti"e is to pro"i e a pro uct to a customer or pro"i e an interme iate goo or ser"ice in a larger "alue c#ain. *#ese !usiness functions inclu e +F?$ esign$ pro uction$ mar)eting$ istri!ution$ an customer ser"ice. An organi9ation can !ecome more effecti"e !y focusing on w#et#er eac# lin) in t#e c#ain a s "alue from t#e customer6s perspecti"e an furt#ers t#e organi9ation6s o!:ecti"es.
Diff: & Terms: value chain Objective: & AACSB: Reflective thinking

10.) 'n most organi9ations$ customer satisfaction is one of t#e top priorities. As suc#$ attention to customers is necessary for success. Ariefly escri!e t#e four types of eman s customers are currently placing on organi9ational performance. Answer: Cost: 8rgani9ations are un er continuous pressure to re uce t#e cost of t#e pro ucts or ser"ices t#ey sell to t#eir customers. Guality: Customers are expecting #ig#er le"els of &uality an are less tolerant of low &uality t#an in t#e past.

14-

*ime: *ime #as many components: t#e time ta)en to e"elop an !ring new pro ucts to mar)etJ t#e spee at w#ic# an organi9ation respon s to customer re&uestsJ an t#e relia!ility wit# w#ic# promise eli"ery ates are met. 8rgani9ations are un er pressure to complete acti"ities faster an to meet promise eli"ery ates more relia!ly t#an in t#e past in or er to increase customer satisfaction. 'nno"ation: *#ere is now #eig#tene recognition t#at a continuing flow of inno"ati"e pro ucts or ser"ices is a prere&uisite for t#e ongoing success of most organi9ations.
Diff: 2 Terms: customer service Objective: & AACSB: Reflective thinking

14.

10/) Ariefly explain t#e planning an control acti"ities in management accounting. Eow are t#ese two acti"ities lin)e to eac# ot#er= Answer: 3lanning !usiness operations relates to esigning$ pro ucing$ an mar)eting a pro uct or ser"ice. *#is inclu es preparing !u gets an etermining t#e prices an cost of pro ucts an ser"ices. A company must )now t#e cost of eac# pro uct an ser"ice to eci e w#ic# pro ucts to offer an w#et#er to expan or iscontinue pro uct lines. Controlling !usiness operations inclu es comparing actual results to t#e !u gete results an ta)ing correcti"e action w#en nee e . Fee !ac) lin)s planning an control. *#e control function pro"i es information to assist in !etter future planning.
Diff: 2 Terms: %lanning! control Objective: ( AACSB: Reflective thinking

100) Explain #ow a !u get can #elp management implement strategy. Answer: A !u get is a planning tool$ a &uantitati"e expression of a plan of action. First$ actions are planne an t#en t#ey are communicate to t#e entire organi9ation. *#e !u get also #elps wit# coor ination.
Diff: & Terms: bu'get Objective: ( AACSB: Reflective thinking

101) Explain #ow a customer focus can result in increase profits for a company. Answer: 'f customers w#o pro"i e a company wit# t#e most profits are attracte $ satisfie $ an retaine $ profits will increase as a result.
Diff: & Terms: strateg Objective: ( AACSB:

14/

Reflective thinking

140

114) Complete a performance report for t#e mont# of May$ 244/$ for t#e ?aily Aulletin$ a regional newspaper s#owing four columns: 1) Actual +esultJ 2) Au gete AmountJ %) ?ifference: Actual +esult minus Au gete AmountJ () ?ifference as a 3ercentage of Au gete Amount$ gi"en t#e following ata: A "ertising pages sol Au gete a "ertising pages A "ertising re"enue Au get a "ertising re"enue 144 114 K($%.0$444 K($(14$444

?oes t#e report in icate any cause for managerial in"estigation= Answer: *#e performance report s#oul loo) somet#ing li)e t#e following: Actual +esult 51) Au gete Amount 52) ?ifference 5Actual ?ifference as a +esult - Au gete 3ercentage of Au gete Amount 5() Amount) = 5%) H 52) 5%) = 51) - 52) 14 pages Fa"ora!le 1.1I Fa"ora!le 2.4I ,nfa"ora!le

A "ertising 114 pages 144 pages pages sol A"erage rate per K(044 K(144 K144 ,nfa"ora!le page 5A "ertising +e"enues) H 5A "ertising pages sol ) A "ertising K($%.0$444 K($(14$444 K(2$444 Fa"ora!le re"enues

1.4I Fa"ora!le

*#e o"erall 1I fa"ora!le ifference in a "ertising re"enue is cause !y offsetting ifferences in a "ertising pages sol 5fa"ora!le) an t#e a"erage rate per page 5unfa"ora!le). *#e performance report #ig#lig#ts t#e unfa"ora!le rop in t#e a "ertising rate per page. <#ile t#e percentage rop in a "ertising re"enue per page is not ramatic$ management mig#t want to in"estigate t#e reasons !e#in suc# a rop. Some possi!ilities inclu e: aggressi"e price re uctions to o!tain re"enue$ a general rop in newspaper me ia spen ing$ some aggressi"e competition$ or an unrealistic !u get.
Diff: & Terms: bu'get Objective: ( AACSB: Anal tical skills

111) ?iscuss t#e cost-!enefit approac# gui eline management accountants use to pro"i e "alue in strategic Answer: ecision ma)ing.

Management accountants continually face resource allocation ecisions. *#e cost-!enefit approac# s#oul !e use in ma)ing t#ese ecisions. +esources s#oul !e spent if t#e expecte !enefits to t#e company excee t#e expecte costs. *#e expecte !enefits an costs may not !e easy to &uantify$ !ut it is a useful approac# for ma)ing resource allocation ecisions.
Diff: & Terms:

cost-benefit a%%roach

141

* AACSB: Reflective thinking

114

112) ?iscuss t#e potential !e#a"ior implications of performance e"aluation. Answer: As measurements are ma e on operations an $ especially$ on in i"i uals an groups$ t#e !e#a"ior of t#e in i"i uals an groups are affecte . 3eople react to t#e measurements !eing ma e. *#ey will focus on t#ose "aria!les or t#e !e#a"ior !eing measure an spen less attention on "aria!les an !e#a"ior t#at are not measure . 'n a ition$ if managers attempt to intro uce or re esign cost an performance measurement systems$ people familiar wit# t#e pre"ious system will resist. Management accountants must un erstan an anticipate t#e reactions of in i"i uals to information an measurements. *#e esign an intro uction of new measurements an systems must !e accompanie wit# an analysis of t#e li)ely reactions to t#e inno"ations.
Diff: & Terms: control! learning Objective: * AACSB: Reflective thinking

11%) <#at areas of responsi!ility oes a c#ief financial officer #a"e in a typical organi9ation= Answer: *#e responsi!ilities "ary among organi9ations$ !ut generally inclu e t#e following areas: controllers#ip$ treasury$ ris) management$ taxation$ in"estor relations$ an internal au it.
Diff: & Terms: chief financial officer .C/O0 Objective: + AACSB: Reflective thinking

11() Eow oes a controller #elp ;control; a company= Answer: Ay reporting an interpreting rele"ant ata$ t#e controller exerts a force or influence t#at impels management towar ma)ing !etter informe ecisions. *#e controller of Caterpillar escri!e t#e :o! as ;a !usiness a "isor to ...#elp t#e team e"elop strategy an focus t#e team all t#e way t#roug# recommen ations an implementation.;
Diff: & Terms: controller Objective:

111

+ AACSB: Reflective thinking

11-) Cou #a"e !een employe as an entry-le"el management accountant for a little un er a year. Cou suspect t#at your imme iate super"isor is in"ol"e in a significant frau in"ol"ing i"erting of company assets to personal use. Ariefly escri!e t#e steps you mig#t ta)e to resol"e t#is ilemma. Answer: *#e management accountant s#oul first consult any internal company proce ures concerning t#e resolution of et#ical issues$ an ma)e sure t#ese proce ures are followe as closely as possi!le. At t#e same time$ t#e management accountant s#oul ma)e sure t#at t#e facts are accurate$ an are not !ase on rumors or inaccurate information. 'f t#ese policies o not resol"e t#e situation$ present t#e facts to t#e next #ig#er managerial le"el. Clarify t#e rele"ant et#ical issues wit# an o!:ecti"e a "isor 5e.g.$ 'nstitute of Management Accountants #otline). Consult your own attorney to !e aware of your own rig#ts an responsi!ilities. 'f all internal re"iew proce ures #a"e still not resol"e t#e et#ical situation$ t#e managerial accountant mig#t #a"e to resign an write an informati"e letter to an appropriate representati"e of t#e organi9ation$ an per#aps notify ot#er parties.
Diff: & Terms: %rofessional ethics Objective: , AACSB:

Et#ical reasoning

112