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Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
CHAPTER 1
The Role of Accounting Information in Ethical Management Decision Making
CHAPTER LEARNING OBJECTIVES
- Describe the process of strategic management and decision making.
- Identify the types of control systems that managers use.
- Explain the role of accounting information in strategic management.
- Explain the information systems and information that is relevant for decision making.
- Describe how business risk affects management decision making.
- Appreciate how biases affect management decision making.
- Determine how managers make higher-quality decisions.
- Explain the importance of ethical decision making. 1 / 4
- - 2 Test Bank for Cost Management, Third Canadian Edition
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
TRUE-FALSE STATEMENTS
- A vision statement is one way to clarify an organization’s basic purpose and ideology.
Answer: True
Difficulty: Easy
Learning Objective: Describe the process of strategic management and decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Most managers follow a standard template and format when writing a vision statement.
Answer: False
Difficulty: Easy
Learning Objective: Describe the process of strategic management and decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- A vision statement helps employees understand how to deal with various stakeholder groups.
Answer: True
Difficulty: Easy
Learning Objective: Describe the process of strategic management and decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Organizational core competencies are the tactics that managers use to take advantage of the
vision.
Answer: False
Difficulty: Easy
Learning Objective: Describe the process of strategic management and decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Accounting information is the only thing managers need to make financial decisions.
Answer: False
Difficulty: Easy
Learning Objective: Explain the role of accounting information in strategic management.
CPA: Management Accounting
Bloomcode: Knowledge
- / 4
The Role of Accounting Information in Ethical Management Decision Making 1 - 3
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
- Accounting information is used to monitor operations by comparing actual results to planned
results.
Answer: True
Difficulty: Easy
Learning Objective: Explain the role of accounting information in strategic management.
CPA: Management Accounting
Bloomcode: Knowledge
- Accounting information cannot be used to motivate employee behavior.
Answer: False
Difficulty: Easy
Learning Objective: Explain the role of accounting information in strategic management.
CPA: Management Accounting
Bloomcode: Knowledge
- Cost accounting information is used for both external reporting and internal decision making.
Answer: True
Difficulty: Easy
Learning Objective: Explain the role of accounting information in strategic management.
CPA: Management Accounting
Bloomcode: Knowledge
- Cost accounting information, such as the valuation of ending inventory, is shown on external
financial statements.
Answer: True
Difficulty: Easy
Learning Objective: Explain the role of accounting information in strategic management.
CPA: Management Accounting
Bloomcode: Knowledge
- Because accounting information is highly objective and quantitative in nature, it is not subject to
uncertainties or management bias.
Answer: False
Difficulty: Easy
Learning Objective: Identify the types of control systems that managers use.
Learning Objective: Appreciate how biases affect management decision making.
CPA: Management Accounting
Bloomcode: Knowledge 3 / 4
- - 4 Test Bank for Cost Management, Third Canadian Edition
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
- Uncertainty and bias reduce decision quality.
Answer: True
Difficulty: Easy
Learning Objective: Identify the types of control systems that managers use.
Learning Objective: Appreciate how biases affect management decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Uncertainties cause decision makers to ignore weaknesses in a preferred course of action.
Answer: False
Difficulty: Easy
Learning Objective: Identify the types of control systems that managers use.
CPA: Management Accounting
Bloomcode: Knowledge
- Uncertainties and biases do not affect external financial reports, because they are based on
objective standards.
Answer: False
Difficulty: Easy
Learning Objective: Identify the types of control systems that managers use.
Learning Objective: Appreciate how biases affect management decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Because we can never completely remove biases and uncertainty from decision-making,
higher-quality decision processes are often imprecise.
Answer: True
Difficulty: Easy
Learning Objective: Identify the types of control systems that managers use.
Learning Objective: Appreciate how biases affect management decision making.
CPA: Management Accounting
Bloomcode: Knowledge
- Higher-quality decisions result from higher-quality information, reports, and decision-making
processes.
Answer: True
Difficulty: Easy
- / 4
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