Question 1

Objectivity in management accounting
What is meant by the following statement? 'The objectivity of the management accounting process is largely a myth.'

Accepted Answer

The answer of Objectivity in management accounting
What is meant by...

Question 2

Accountants with a CPA qualification are only able to work as financial accountants.

Accepted Answer

While a CPA qualification is primarily focused on financial accounting, it also covers other areas such as taxation, auditing, and management accounting. This allows CPAs to work in various fields, including financial analysis, auditing, consultation, and management.

Question 3

Organisations prepare a mission statement that describes the desired future position and/or goals of the organisation.

Accepted Answer

The answer of Organisations prepare a mission statement that describes...

Question 4

There is no overlap between the two accounting streams management and financial accounting.Graduate Attribute: Problem Solving

Accepted Answer

There is overlap between management and financial accounting in terms of their basic principles and concepts, such as recording financial transactions, preparing financial statements, and analyzing financial data. However, the focus and purpose of each stream may differ, with management accounting being more geared towards internal decision-making and financial accounting being more focused on external reporting and compliance.

Question 5

The theory that suggests that a firm's management accounting system is influenced by factors such as the external environment and technology is called contingency theory.

Accepted Answer

Contingency theory proposes that a firm's management accounting system is not universal, but rather contingent upon various factors such as the external environment, technology, organizational structure, and strategy.

Question 6

The increased information needs of modern organisations have meant that management accounting has had to change its focus over the years.

Accepted Answer

With the increased complexity of business operations, globalization, and technological advancements, management accounting has evolved to provide more detailed and timely information to support strategic decision-making. Management accountants now focus on providing insights into not just financial performance, but also non-financial aspects such as customer satisfaction, employee engagement, and sustainability.

Question 7

Which of the following is not a widely recognised professional accounting body?
A) The Institute of Production Accountants
B) CPA Australia
C) The Institute of Chartered Accountants
D) The Institute of Management Accountants

Accepted Answer

The Institute of Production Accountants is not a widely recognised professional accounting body. CPA Australia, The Institute of Chartered Accountants, and The Institute of Management Accountants are all well-known professional accounting bodies.

Question 8

The systems and procedures implemented to provide regular information to assist with control are called control systems.

Accepted Answer

Control systems are indeed implemented to provide regular information to assist with control.

Question 9

Behavioural issues are not taken into consideration when developing management accounting systems.Graduate Attribute: Problem Solving

Accepted Answer

Behavioural issues should be taken into consideration when developing management accounting systems. This is because human behavior can affect the effectiveness of such systems. For example, if the system is too complex or difficult to use, employees may be less likely to input data accurately or use the system at all. Therefore, management accountants should consider the ways in which employees will interact with the system and design it in a way that promotes accurate and efficient data input and use.

Question 10

When a firm adopts a strategy of being a low-cost producer and sells its products at a price lower than its competitors,the firm is said to be using a strategy of cost leadership.

Accepted Answer

This is true as cost leadership strategy aims to achieve lower costs than competitors and sell products at a lower price, while still maintaining a profit margin.

Question 11

Staff management and line management both have indirect responsibilities to the operations of an organisation.

Accepted Answer

Line management directly oversees the operations of an organization, while staff management provides support and advice to line management, thus having an indirect role.

Question 12

The costing system is the part of the accounting information system that is common to both financial and management accounting.

Accepted Answer

The costing system is used in both financial and management accounting to measure the cost of production, inventory, and goods sold. It is an important part of the accounting information system as it helps in making informed decisions relating to pricing, profitability, and cost control.

Quiz 1: Management Accounting: Information for Creating Value and Managing Resources

Objectivity in management accounting What is meant by the following statement? 'The objectivity of the management accounting process is largely a myth.'