Question 1

Lean accounting initiatives are based on the belief that only a small fraction of the total time and effort in an organisation actually adds value for the end customer.

Accepted Answer

Lean accounting initiatives focus on identifying and eliminating non-value-added activities in order to improve efficiency and reduce costs. This is based on the idea that only a small percentage of the total time and effort in an organization is actually adding value for the customer.

Question 2

Friedman's view of the 'Flat World' involves moving back to embrace the best of the past features of management accounting.

Accepted Answer

Friedman's 'Flat World' concept refers to globalization and the leveling of the playing field in terms of commerce and competition, not specifically about management accounting practices.

Question 3

A Friedman's 'flattner' in his discussion of 'flat world' theory is:

Accepted Answer

Friedman's 'flattner' in his discussion of 'flat world' theory refers to the technological advancements that have made the world more interconnected and flattened the playing field for businesses and individuals. The rise of the personal computer and the development of the internet were early examples, but outsourcing (especially to countries with lower labor costs) has also had a significant impact. Therefore, all of the above options are considered 'flattners' according to Friedman.

Question 4

Friedman's 'flattners' involve accelerating the connecting of the unconnected.

Accepted Answer

Friedman's 'flattners' do involve accelerating the connecting of the unconnected.

Question 5

Strategic management accounting is essentially theoretical in nature.

Accepted Answer

Strategic management accounting involves practical approaches and techniques for managing and evaluating financial information to inform and guide strategic decisions in an organization.

Question 6

The value-based management (VBM) technique takes a holistic approach to the management of an organisation and focuses on the underlying 'drivers' of value.

Accepted Answer

The statement accurately describes the value-based management technique.

Question 7

'Control' in the text, is commonly used as a short-form term for managerial control and/or managerial control system tools.

Accepted Answer

The statement is true as the term 'control' is frequently used to refer to managerial control and management control system tools, which are used for monitoring and regulating organizational activities to achieve its objectives.

Question 8

A future direction which enables the focusing of an organisation's resources and decision making around a common theme, is a definition of:

Accepted Answer

A strategy is defined as a future direction that enables an organization to focus its resources and decision making around a common theme. Planning involves the creation of specific plans and goals to achieve the organization's strategy. Budgeting involves the allocation of financial resources to support the plans and goals. Control involves monitoring performance to ensure that plans and goals are being achieved. Therefore, strategy is the best choice as it encompasses all other elements and provides the overarching direction for an organization.

Question 9

Good internal control systems should aim to eliminate risk.

Accepted Answer

Good internal control systems cannot completely eliminate risk, but they can minimize and manage it to an acceptable level. The purpose of internal controls is to identify and manage risks, not to eliminate them entirely.

Question 10

Rather than having a backward focus strategic management accounting looks to the future.

Accepted Answer

Strategic management accounting is forward-looking in nature and involves the use of financial and non-financial data to support long-term decision-making, planning, and performance evaluation. It is focused on identifying and exploiting opportunities for growth and improvement, rather than simply analyzing past performance.

Question 11

In management accounting, designing and managing global networks, controlling them through techniques such as empowerment and creating value through integration is know as:

Accepted Answer

The term used in the question description relates to network orchestration, which involves designing and managing global networks, controlling them through techniques such as empowerment, and creating value through integration. Options A, C, and D do not accurately describe this concept.

Question 12

Management control systems have one main role; to facilitate decisions by providing relevant and timely information to support decision making.

Accepted Answer

The answer of Management control systems have one main role;...

Question 13

Porter classifies strategy into either cost leadership or product differentiation.

Accepted Answer

Porter's generic strategies include cost leadership, differentiation, and focus. However, he does classify strategy as either cost leadership or product differentiation.

Question 14

Management accounting is now seen as a useful vehicle by which to implement economic theory and social and environmental change.

Accepted Answer

This statement is true. Management accounting can be a tool for implementing economic theory by analyzing financial data to make informed business decisions. It can also be used to promote social and environmental change by measuring and reporting on companies' impact on society and the environment, and identifying areas for improvement.

Question 15

'Relevance Lost' by Johnson and Kaplan ,was published in 1995.

Accepted Answer

'Relevance Lost' by Johnson and Kaplan was published in 1987.

Question 16

The value-based management (VBM) technique, was proposed by Kaplan and Norton.

Accepted Answer

The Value-Based Management (VBM) technique does not originate from Kaplan and Norton; they are known for developing the Balanced Scorecard. VBM is a management approach that ensures corporations are run consistently on value (usually shareholder value).

Question 17

Prior to the 1980's accounting for internal control did not have a strategic component.

Accepted Answer

Prior to the 1980's, internal control was mostly viewed as a means of ensuring accuracy and reliability of financial statements, with less emphasis on its role in achieving overall organizational objectives and strategies. It wasn't until the 1980's that the importance of internal control in achieving strategic goals became more widely recognized.

Question 18

Overproduction is a non-value added activity.

Accepted Answer

Overproduction adds no value to the final product and can lead to waste, increased inventory costs and inefficient production processes.

Question 19

Which of these are is not included within the scope of current management accounting?

Accepted Answer

Compliance with international accounting standards falls under the scope of financial accounting, not management accounting. Management accounting is focused on providing information for internal decision-making and planning, while financial accounting is concerned with providing accurate and reliable financial statements for external users. B and C are both included within the scope of current management accounting as companies are increasingly considering environmental and social factors, as well as intangible assets (such as intellectual property) when making business decisions.

Question 20

Early writers on strategic management believed that better control would occur within an organisation if the management accounting function was more closely aligned to the financial accounting.

Accepted Answer

Early writers on strategic management actually emphasized the importance of aligning the management accounting function more closely with strategic planning and decision-making processes, rather than solely focusing on its alignment with financial accounting. This was to ensure that management accounting could better support strategic objectives and provide relevant information for internal decision-making.

Quiz 12: Strategy and Control