Key Terms Ch 16 Flashcards
Procedures used to verify accounting reports and statements.
Accounting Audits
A method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities.
Activity Based Costing (ABC)
A frank and open-minded discussion of four basic questions aimed at continuous improvement.
After-Action Review
The values of the various items the corporation owns.
Assets
Control system combining four sets of performance measures: financial, customer, business process, and learning and growth.
Balanced Scorecard
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders’ equity.
Balance Sheet
the process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences; also called budgetary controlling.
Budgeting
The use of rules, regulations, and authority to guide performance.
Bureaucratic Control
Control based on the norms, values, shared goals, and trust among group members.
Clan Control
The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed.
Concurrent Control
Any process that directs the activities of individuals toward the achievement of organizational goals.
Control
A liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities.
Current Ratio
A leverage ratio that indicates the company’s ability to meet its long-term financial obligations.
Debt-Equity Ratio
An evaluation conducted by one organization, such as a CPA firm, on another.
External Audit
Control that focuses on the use of information about previous results to correct deviations from the acceptable standard.
Feedback control
The control process used before operations begin, including policies, procedures, and rules designed to ensure that planned activities are carried out properly.
Feedforward control
A periodic assessment of a company’s own planning, organizing, leading, and controlling processes.
Internal Audit
The amounts a corporation owes to various creditors.
Liabilities
An evaluation of the effectiveness and efficiency of various systems within an organization.
Management Audit
Focusing on short-term earnings and profits at the expense of longer-term strategic obligations.
Management Myopia
Control based on the use of pricing mechanisms and economic information to regulate activities within organizations.
Market control
A managerial principle stating that control is enhanced by concentrating on the exceptions to or significant deviations from the expected result or standard.
Principle of Exception
An itemized financial statement of the income and expenses of a company’s operations.
Profit and Loss Statement
A ratio of profit to capital used, or a rate of return from capital.
Return on Investment (ROI)
Expected performance for a given goal; a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed.
Standard
The amount accruing to the corporation’s owners.
Stockholder’s Equity
Price charged by one unit for a good or service provided to another unit within the organization.
Transfer Price
