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Advanced Multiple Choice Quiz
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1The problem with incrementalism is that:
(Learning Objective 1 Ch 17)
A)activities are not under the control of management.
B)there is too much uncertainty about future budgets.
C)it encourages managers to be over-concerned with their salary increases.
D)activities become institutionalised through the budget and there is a reluctance to ask questions about fundamental purposes.


2Which of the following desirable features is not recommended in a performance measurement system?
(Learning Objective 2 Ch 17)
A)the measurements system should have a large number of performance indicators.
B)the performance measurement system must be comprehensive including non-financial as well as financial indicators.
C)there must be a system of feedback and review to ensure that the information flows enable the organization to learn and adapt from its experience.
D)the system should be aligned with the rewards/penalties that managers and other employees receive for achieving performance targets.


3Organisational control systems:
(Learning Objective 2 Ch 17)
A)always penalise ethical decision making.
B)rely entirely on formal controls.
C)may help to embed corporate social responsiveness.
D)are just another name for budgeting.


4Which of the following of four basic levers of control is most similar to traditional budgeting?
(Learning Objective 3 Ch 17)
A)diagnostic control systems that are used to motivate and monitor.
B)belief systems that inspire and direct.
C)boundary systems that limit opportunism.
D)interactive control systems that stimulate organisational learning.


5Corporate governance is:
A)a technique for costing in service organisations.
B)a development of budgeting and standard costing.
C)as a minimum, concerned with protecting the interests of the suppliers of capital.
D)another name for local government management.


6A risk management system should mean that a company will:
(Learning Objective 5 Ch 17)
A)avoid all risks.
B)reject any attempt to categorise risk.
C)consider the likelihood of risks materialising.
D)establish risk-avoiding controls irrespective of their costs.


7The Performance Prism:
(Learning Objective 5 Ch 17)
A)recognises that stakeholders make contributions to the organisation.
B)derives performance measures from strategy.
C)focuses on maximising shareholder wealth.
D)is designed to focus on social objectives.


8Which of the following is not a reason for adopting Environmental Management Accounting?
(Learning Objective 6 Ch 17)
A)Reduce corruption
B)Respond to Increasing environmental regulation
C)Improve profitability
D)Respond to a wider responsibility to the community


9Which of the following problems associated with output related performance indicators is mostly prevalent in public rather than private sector organisations?
(Learning Objective 7 Ch 17)
A)Myopia- the concentration on short-term results
B)The misrepresentation of financial results
C)Gaming- deviant budgetary behaviour such as hiding reserves
D)Ossification – a reluctance to innovate or take risks


10Zero-based budgeting:
(Learning Objective 7 Ch 17)
A)Is an approach to budgeting that solely applies to public sector organisations
B)Is an approach in which managers are required to justify all budgeted expenditures, not just changes in the budget from the previous year
C)Is best carried out on a quarterly basis
D)Should be undertaken on a routine basis





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