Accounting and Management Systems
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Questions and Answers

What is a main reason why managers support certain accounting standards?

  • To increase transparency
  • To minimize information costs (correct)
  • To increase the complexity of financial reports
  • To reduce the power of shareholders
  • What is the concept of 'accounting as a mythology' used to?

  • Manipulate financial reports
  • Communicate financial information
  • Create accounting standards
  • Justify and rationalize managerial decisions (correct)
  • What is a purpose of preparing accounting reports?

  • To minimize information costs
  • To communicate financial information to users (correct)
  • To increase management compensation
  • To deceive stakeholders
  • What is 'accounting as a magic' comparable to?

    <p>A magician's tricks</p> Signup and view all the answers

    What is an example of 'accounting as a magic'?

    <p>Using accounting techniques to disguise loss-making investments</p> Signup and view all the answers

    What is 'accounting as economic goods' part of?

    <p>A wider information set</p> Signup and view all the answers

    What are the two components of accounting as a language, according to Hawes (1972)?

    <p>Symbols and grammatical rules</p> Signup and view all the answers

    What is the primary purpose of accounting in the context of intra-corporate politics?

    <p>To shape company policies and further management's aims</p> Signup and view all the answers

    What drives the accounting standard setting process, according to the text?

    <p>Political process and special interest groups</p> Signup and view all the answers

    What is the role of accounting in the context of communication?

    <p>To translate economic events and transactions into words and numbers</p> Signup and view all the answers

    What can be inferred about accounting reports in the context of intra-corporate politics?

    <p>They are used to convince management to allocate resources</p> Signup and view all the answers

    What can be inferred about the selection of accounting techniques in the context of accounting standard setting?

    <p>They are selected to maximize the utility of special interest groups</p> Signup and view all the answers

    What is the primary role of accounting according to the Committee on Terminology of the American Institute of Certified Public Accountants?

    <p>To record, classify, and summarize financial transactions and events</p> Signup and view all the answers

    What period of accounting history saw managers being given initiative and insights on how to use assets?

    <p>Asset-utilisation period</p> Signup and view all the answers

    What is the role of accounting in intra-corporate politics?

    <p>To exercise power and influence within the organization</p> Signup and view all the answers

    What is the concept of accounting as mythology?

    <p>The idea that accounting is a neutral and objective practice</p> Signup and view all the answers

    What is the role of accounting in communication?

    <p>To provide financial information to stakeholders</p> Signup and view all the answers

    What is the potential consequence of accounting being used as a tool for manipulation?

    <p>Misleading financial information</p> Signup and view all the answers

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