Chapter 6 Flashcards
Management accounts are:
used internally to manage the business
forward looking and historical
include a cash flow forecast
include budgetary info
Financial accounts are:
financial reporting is regulated by standards + statue
used by shareholders
Mainstream Ltd’s finance director is establishing an effective system in the finance function for
producing management accounting reports. Which issue should be the finance director’s primary
consideration?
A The information needs of the company’s managers
B The need for effective internal control mechanisms
C The need for cost-effectiveness
D The need for effective information security
A
Which statement about critical success factors (CSFs) for a business is true?
A Low costs will always be a CSF; high sales revenue will always be a CSF.
B Low costs will always be a CSF; high sales revenue will not always be a CSF.
C Low costs will not always be a CSF; high sales revenue will always be a CSF.
D Low costs will not always be a CSF; high sales revenue will not always be a CSF.
D - high quality might be more important than costs; high margins might be more important than revenue
organisations to improve reporting of economic, environmental + social impact
GRI = global reporting initiative
triple bottom line approach
TCFD focus:
Task Force on Climate-Related Financial disclosure = financial impact of climate change
CDSB focus
Climate Disclosures Standards Board = focus on natural capital
GRI
global reporting initiative standards - improve reporting of economic, environmental and social impact
triple bottom line approach
with GRI - improve reporting of economic, environmental and social impact
fundamental qualitative features of FS
relevance
faithful representation
enhancing qualitative features
verifiability
comparability
understandability
timeliness
Planning info
helps people plan
Operational info
helps people carry out their day-to-day activities
Tactical info
short-term issues + opportunities ie monthly variance reports
Strategic info
long-term decision making
monthly variation reports - type of info:
tactical information
how is data / information processed: to be effective it must be:
CATIVA
Completeness
Accuracy
Timeliness
Inalterability
Verifiability
Accessibility
control totals - accuracy, completeness, both
and
data verification or validation?
validation - both
range checks - accuracy, completeness, both
and
data verification or validation?
validation
accuracy
Ranger plc’s information systems manager wants all data on the company’s databases to be the same
as their sources and not to have been accidentally or deliberately altered, destroyed or disclosed. His
concern, therefore, is with:
A data accuracy
B data integrity
C data authenticity
D data completeness
b
part of ACIANA
secure info system - qualities acronym
ACIAN
Accessibility
Confidentiality
Integrity
Authenticity
Non-repudiation - the avoidance of reject
Authorisation
The directors of Royguard plc have recently decided to establish an extensive management
information system within one of its subsidiaries. In arriving at this decision, the directors were likely
to have been conscious that the subsidiary’s operations were largely characterised by:
A structured decisions
B unstructured decisions
C non-programmable decisions
D non-routine decisions
A - structured decisions: reduced to a series of rules
Zing plc’s information system automatically maintains a log of user activity. This log contains details
of identity, log-on and log-off times and details of processing carried out and access attempts made.
All transactions are tagged to identify the person responsible for that processing. The log-on details
of the user determine processing access.
Requirement
Which three of the following control objectives does this system effectively address?
A prevention
B detection
C deterrence
D correction
E accuracy
F completeness
A B C
