ACC210 Ch1 Set 2

Question 1

Strategies

Answer 1

the direction that the organisation intends to take over the long term, to meet its mission and achieve its objectives

Question 2

Corporate strategy

Answer 2

decisions about the types of businesses in which to operate, which businesses to acquire and divest, and how best to structure and finance the organisation

Question 3

Business strategy (competitive strategy)

Answer 3

the way a business competes within its chosen market

Question 4

Strategy implementation

Answer 4

putting plans into place to implement and support a chosen business strategy

Question 5

Competitive advantage

Answer 5

the advantage that a business may have over another, which are difficult to imitate

Question 6

Cost leadership

Answer 6

a business strategy where a firm is a low-cost producer that allows the business to sell its goods or services at a lower price than competitors

Question 7

Product differentiation

Answer 7

a business strategy whereby a firm derives competitive advantage from offering goods or services that have characteristics different from those offered by competitors

Question 8

Strategic planning

Answer 8

long-term planning to achieve the organisation’s objectives, usually undertaken by senior managers

Question 9

Planning

Answer 9

a broad concept that is concerned with formulating the direction for future operations

Question 10

Budget

Answer 10

a detailed plan summarising the financial consequences of an organisation’s operating activities for a specified future time period

Question 11

Control

Answer 11

putting mechanisms in place to ensure that operations proceed according to plan and that objectives are achieved

Question 12

Control systems

Answer 12

the systems and procedures that provide regular information to assist in control

Question 13

Contingency theory

Answer 13

assumes that the design of an organisation’s management accounting system may be influenced by (is contingent on) a range of factors including the external environment, technology, organisational structure, organisational size, strategy, and organisational and national culture

Question 14

Institutional theory

Answer 14

states that the design of an organisation’s management accounting system may be influenced by the need for legitimacy and the tendency for firms to imitate the ‘good practice’ from other organisations

Question 15

Staff management

Answer 15

managers who support the activities of an organisation as a whole, and are only indirectly involved in the operations of a business

Question 16

Line management

Answer 16

managers who are directly involved in the core activities of the business

Question 17

Date - The focus on management accounting

Answer 17

Prior to 1950:- Cost; cost determination and financial control 1965:- Profitability; provision of information for planning and control 1985:- Waste reduction; reduction of waste through strategic cost management 1995:- Resource management and value creation; creation of value through strategic resource management – the effective and efficient use of all resources

Question 18

Code of Ethics for Professional Accountants

Answer 18

The Code of ethics with which CPAs and CAs are required to comply, issued by Accounting Professional and Ethical Standards Board (APESBA)

Question 19

Fundamental principles of the Code of Ethics for Professional Accountants?

Answer 19

• Integrity - Objectivity - Independence - Professional competence and due care - Confidentiality - Professional behaviour