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Advanced Management Accounting Course Notes

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Advanced Management Accounting Course Notes
CGA-CANADA ADVANCED MANAGEMENT ACCOUNTING [MA2] EXAMINATION March 2011 Marks
30

Time: 3 Hours
Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note:
11/2 marks each

a.

Which of the following is a disadvantage of outsourcing? 1) 2) 3) 4) Outsourcing increases transaction costs. Outsourcing limits a firm’s flexibility. Outsourcing increases risks. Outsourcing increases operating costs.

b. Which of the following is an example of a formal control system within an organization? 1) 2) 3) 4) c. Corporate culture Ethics and values Management style Strategic plans

Which of the following best describes the Sullivan Principles as a control system? 1) 2) 3) 4) A set of standards used to measure social responsibility in enterprises A set of principles describing the norms and expected behaviour of all employees A set of measures to help determine whether a company is performing to expectations A formal information system designed to focus managers’ attention on key strategic issues

d. Agency theory makes some simplifying assumptions about people’s behaviour. Which of the following is an example of these assumptions? 1) 2) 3) 4) e. People are self-interested and irrational. People are honest and maximize wealth. People are rational and maximize wealth. People are honest and self-interested.

The assertion that managers should be held responsible for only those decisions over which they have authority is related to what principle? 1) 2) 3) 4) The agency principle The authority principle The controllability principle The management principle

Continued...
EMA2M11 ©CGA-Canada, 2011 Page

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