Question 1

Feedback systems that monitor organizational outcomes and correct any deviations from predetermined performance standards are referred to as:
A)a diagnostic control system.
B)the intensity factor.
C)goal congruence.
D)monitoring.

Accepted Answer

Diagnostic control systems are designed to monitor and measure performance, detect any deviations from predetermined standards, and then take corrective action to restore performance to the required level. Other options such as intensity factor, goal congruence, and monitoring may be relevant to organizational performance but are not specifically related to feedback systems that monitor outcomes and correct deviations.

Question 2

Explain why it is important to integrate the organizational code of ethics into the management accounting and control system.

Accepted Answer

The answer of Explain why it is important to integrate...

Question 3

Feedback systems that force a dialogue among all organizational participants about the data that are coming out of the system and what to do about the data are called:
A)diagnostic control systems.
B)monitoring.
C)preventative controls.
D)interactive control systems.

Accepted Answer

Interactive control systems are designed to encourage dialogue and collaboration among all participants in an organization to use data generated from the system to make informed decisions about how to proceed. This feedback loop is important in identifying potential risks, opportunities, and other issues that may arise and enables organizations to adapt quickly to changing circumstances. Diagnostic control systems are similar, but they focus more on identifying problems and finding solutions, while preventative controls aim to prevent problems from occurring in the first place. Monitoring simply involves keeping track of activities or outcomes to ensure that they align with organizational goals.

Question 4

To the extent that an ethical hierarchy exists,________ have the highest authority.
A)societal norms
B)legal rules
C)organizational norms
D)personal norms

Accepted Answer

Legal rules have the highest authority in an ethical hierarchy as they are enforceable by law and provide a formal framework for behavior.

Question 5

Authoritative budgeting occurs when a superior simply tells subordinates what their budget will be.

Accepted Answer

Authoritative budgeting is a type of budgeting method where a manager or superior imposes a budget limit on subordinates without involving them in the budgeting process. Therefore, the statement that authoritative budgeting occurs when a superior simply tells subordinates what their budget will be is true.

Question 6

Codes of ethics developed by professional organizations reflect broad moral principles such as:
A)loyalty.
B)discretion.
C)competence.
D)All of the above are correct.

Accepted Answer

Professional codes of ethics typically contain broad moral principles that address a range of values and behaviors, including loyalty to clients or employers, discretion in handling confidential information, and competence in providing services. Therefore, all of the choices (A, B, and C) are correct.

Question 7

________ is when an employee alters his or her actions specifically in an attempt to manipulate a performance indicator.
A)Gaming the performance indicator
B)Data falsification
C)Smoothing
D)Change management

Accepted Answer

Gaming the performance indicator refers to the act of manipulating or misrepresenting data to give the impression of higher performance. This can include actions such as selecting easier tasks, ignoring certain aspects of the job, or manipulating data to make it appear more favorable.

Question 8

________ occur(s)when a superior simply tells subordinates what their budget will be.
A)Authoritative budgeting
B)Stretch targets
C)Consultative budgeting
D)Budget slack

Accepted Answer

Authoritative budgeting occurs when a superior simply tells subordinates what their budget will be without any input from them. This type of budgeting can lead to resentment and low morale among subordinates who feel that they have been left out of the process. It also does not allow for creativity or innovation, as subordinates are not given the opportunity to provide input or suggest alternative approaches.

Question 9

Smoothing is a form of earnings management.

Accepted Answer

Smoothing involves manipulating earnings to reduce fluctuations and create a more consistent trend over time. This is done to present a more favorable picture to investors, but it can be considered a form of earnings management because it may not accurately reflect the true financial performance of the company.

Question 10

When a manager's and employee's goals are aligned with organizational goals,it is referred to as:
A)a diagnostic control system.
B)the intensity factor.
C)goal congruence.
D)monitoring.

Accepted Answer

When a manager's and employee's goals are aligned with organizational goals, it is referred to as goal congruence. This means that their efforts are focused on achieving common objectives, which leads to increased effectiveness and efficiency in achieving organizational goals.

Question 11

Pressures on managers to act unethically include all of the following EXCEPT:
A)pressures to act in the long-run best interest of the shareholders.
B)solicitations for confidential information.
C)requests to falsify reports.
D)requests to bias information in favor of certain stakeholders.

Accepted Answer

Pressures to act in the long-run best interest of the shareholders do not necessarily lead to unethical behavior. In fact, acting in the long-run best interest of the shareholders often requires ethical behavior to ensure the sustainability and reputation of the company. The other options present situations where managers may be pressured to act unethically.

Question 12

Intrinsic rewards are any rewards that one person provides to another to recognize a job well done.

Accepted Answer

Extrinsic rewards are any rewards that one person provides to another to recognize a job well done.

Question 13

The type of control that focuses on measuring and comparing employee performance against stated objectives is called:
A)task control.
B)monitoring.
C)results control.
D)preventative control.

Accepted Answer

Results control measures and compares employee performance against stated objectives or targets. It focuses on achieving predetermined outcomes and results, rather than narrowly focusing on tasks or activities. Task control refers to ensuring that employees are following specific procedures or steps to complete a task, while monitoring involves keeping track of employee activities and progress. Preventative control involves taking proactive steps to prevent potential problems or issues from arising.

Question 14

An interactive control system should be used to achieve goal congruence when:
A)human behavior needs to be controlled.
B)there is a large degree of strategic uncertainty.
C)systems are allowed to run in a routine fashion.
D)the behavior of employees needs to be inspected while they are performing a task.

Accepted Answer

An interactive control system is best used when there is a large degree of strategic uncertainty. This type of system allows for real-time adjustments to be made based on changing circumstances, which can help ensure that overall goals are being achieved. It is not specifically designed to control human behavior or inspect employee performance. While it can be used in routine situations, it is most effective in dynamic environments where flexibility and adaptability are critical.

Question 15

When sales people are evaluated strictly on sales quotas:
A)they will attempt to sell as much high price merchandise as possible.
B)they are likely to have buy-in.
C)they always become unmotivated.
D)none of the above

Accepted Answer

When evaluated strictly on sales quotas, salespeople are incentivized to maximize their sales, often by focusing on high-priced merchandise to meet or exceed their targets.

Question 16

Which of the following is an essential element of employee empowerment?
A)allowing employees to participate in decision making
B)ensuring employees understand the information they are generating
C)ensuring employees understand the information they are using
D)All of the above.

Accepted Answer

All of the options listed are essential elements of employee empowerment. Allowing employees to participate in decision making ensures they have a voice in how their work is done and can contribute their ideas and expertise. Ensuring employees understand the information they are generating and using helps them make informed decisions and feel confident in their work. Both of these elements are necessary for true employee empowerment.

Question 17

Budgeting slack is most likely to occur when a firm uses the budget only as a planning device and not for control.

Accepted Answer

Budgeting slack occurs when people ask for more resources than they need.

Question 18

Hierarchical organizations with many layers of management are referred to as flat organizations.

Accepted Answer

Hierarchical organizations with many layers of management are referred to as tall organizations.

Question 19

When the operating budget is used as a control device,managers are more likely to be motivated to budget higher sales than actually anticipated.

Accepted Answer

When the operating budget is used as a control device, managers are less likely to be motivated to budget higher sales than actually anticipated.

Question 20

To the extent that an ethical hierarchy exists,________ have the least authority.
A)societal norms
B)groups norms
C)personal norms
D)legal rules

Accepted Answer

Personal norms refer to an individual's own moral compass, values, and beliefs. They are considered the lowest level in the ethical hierarchy as they only apply to the individual and may not be shared by others. Societal norms, group norms, and legal rules are considered to have higher authority as they apply to larger groups of people and have more widespread acceptance and enforcement.

Quiz 9: Behavioral and Organizational Issues in Management Accounting and Control Systems

Feedback systems that monitor organizational outcomes and correct any deviations from predetermined performance standards are referred to as:

Explain why it is important to integrate the organizational code of ethics into the management accounting and control system.

Feedback systems that force a dialogue among all organizational participants about the data that are coming out of the system and what to do about the data are called:

To the extent that an ethical hierarchy exists,________ have the highest authority.

Authoritative budgeting occurs when a superior simply tells subordinates what their budget will be.

Codes of ethics developed by professional organizations reflect broad moral principles such as:

________ is when an employee alters his or her actions specifically in an attempt to manipulate a performance indicator.

________ occur(s) when a superior simply tells subordinates what their budget will be.

Smoothing is a form of earnings management.

When a manager's and employee's goals are aligned with organizational goals,it is referred to as:

Pressures on managers to act unethically include all of the following EXCEPT:

Intrinsic rewards are any rewards that one person provides to another to recognize a job well done.

The type of control that focuses on measuring and comparing employee performance against stated objectives is called:

An interactive control system should be used to achieve goal congruence when:

When sales people are evaluated strictly on sales quotas:

Which of the following is an essential element of employee empowerment?

Budgeting slack is most likely to occur when a firm uses the budget only as a planning device and not for control.

Hierarchical organizations with many layers of management are referred to as flat organizations.

When the operating budget is used as a control device,managers are more likely to be motivated to budget higher sales than actually anticipated.

To the extent that an ethical hierarchy exists,________ have the least authority.