Question 1. Performance evaluation in most f

29 Jun Question 1. Performance evaluation in most f

Question
1. Performance evaluation in most firms is applied at:

A. Many different levels from top management down to individual production and sales employees.

B. All levels of production, but only top levels of sales.

C. Top and mid-management levels only.

D. Lower and mid-management levels only.

E. The mid-management level only.

2. Risk aversion is by:

A. Lack of a strategic emphasis in decision making.

B. Use of non-strategic performance measurement systems.

C. Presence of uncertainty in a manager’s environment.

D. A manager’s inability to deal with stress.

3. The process by which managers at all levels in the firm gain information about the performance of tasks within the firm and judge that performance against pre-established criteria is:

A. Performance measurement.

B. Employee inspection.

C. Goal congruence.

D. Managerial evaluation.

E. Management control.

4. Operational control has a management-by-exception approach in contrast to management control, which is more consistent with:

A. The management-by-incentives approach.

B. The management-by-objectives approach.

C. The “hands off” approach.

D. A non-quantitative set of measures.

E. A non-qualitative set of measures.

5. A strategic business unit (SBU) consists of a well-defined set of controllable operating activities over/about which the SBU manager is:

A. Knowledgeable.

B. Responsible for strategy.

C. Responsible for strategy and execution.

D. Responsible for strategy, execution, and performance.

6. The objectives of management control of the manager include:

A. Cost, quality, and functionality.

B. Management by objectives.

C. Management by exception.

D. Motivation, incentive and fairness.

E. Identification, response and performance.

7. The principal-agent economic model applied to employment contracts deals primarily with the two management performance aspects of:

A. Rights and duties.

B. Uncertainty and lack of observability.

C. Performance and reward.

D. Controllability and responsibility.

E. Risk and motivation.

8. The “risk-averse” manager will be improperly biased to:

A. Seek out decisions with uncertain outcomes.

B. Make risky decisions.

C. Avoid decisions with uncertain outcomes.

D. Maximize his or her own risk and minimize the company’s risk.

E. Use resources beyond his/her control.

9. In properly developing formal systems at the team level that will have the desired impact on employees’ performance, the management accountant should recognize any existing informal systems and:

A. Make plans to eliminate these informal systems.

B. Simply formalize them into the system being developed.

C. Try to eliminate them prior to system development.

D. Not let these “culture” aspects affect system development.

E. Try to capture valued “culture” aspects in the formal system.

10. The common factor among control systems in hiring practices, promotion policies, and strategic performance measurement is:

A. Management sets expectations for desired employee performance.

B. Employee-determined expectations for desired employee performance.

C. Coordination of activities.

D. Communication of results.

11. Among the benefits of centralized management in a firm is (are):

A. Effective goal congruence.

B. Utilization of top management expertise.

C. Effective participation by all levels of management.

D. A higher level of motivation for divisional managers.

12. The benefits of decentralized management in a firm include all the following except:

A. Ability of SBU managers to use their local knowledge effectively.

B. Ability of SBU managers to make more timely decisions.

C. Motivation provided by the freedom and responsibility of a decentralized environment.

D. Improved coordination among divisional managers.

13. The need for coordination between the production and the selling function will impact the choice of:

A. Profit, cost or revenue center.

B. Manager for the firm.

C. Formal or informal control systems.

D. Profitability goal for the firm.

E. Control measures to prevent fraud.

14. By not distinguishing between direct and indirect costs in their performance reporting, many companies:

A. Generate more useful control potential for managers.