GL/FRS Control Issues Quiz

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What does 'span of control' refer to?

The number of departments within the organization

The number of managers in the organization

The number of employees directly under a manager's supervision (correct)

The number of years a manager has been in control

How should managers apply 'management by exception'?

By involving themselves in every minor detail

By focusing on potential problem areas only (correct)

By ignoring any changes or key factors

By delegating all decisions to subordinates

Which type of information is recommended for managers with narrow spans of control?

Detailed reports (correct)

No reports needed

High-level strategic reports

Summary reports

In the context of management principles, what does 'management level' refer to?

The hierarchy of management positions within the organization Signup and view all the answers

What do reports focusing on changes in key factors aim to identify?

Potential problems or issues Signup and view all the answers

'Management by exception' suggests that managers should primarily focus on which areas?

'Problem areas' requiring attention Signup and view all the answers

Which factor does Responsibility Accounting refer to?

Formalization of tasks Signup and view all the answers

What does the principle of Responsibility and Authority define?

The obligation to achieve desired results and the power to make decisions Signup and view all the answers

Which management function defines the vertical reporting channels through which information flows?

Responsibility and authority Signup and view all the answers

Which principle structures the firm around tasks performed rather than around individuals’ unique skills?

Formalization of tasks Signup and view all the answers

What is the power to make decisions within the limits of responsibility called?

Authority Signup and view all the answers

Which factor is related to the obligation to achieve desired results in management?

Responsibility Signup and view all the answers

How does segregation of duties help maintain control in the organization?

G/L clerks should not have recordkeeping responsibility for special journals or subsidiary ledgers. Signup and view all the answers

What is a key control issue related to transaction authorization in the text?

Journal vouchers must be authorized by a manager at the source dept. Signup and view all the answers

Why is limiting database access to authorized individuals crucial according to Sarbanes-Oxley?

To prevent errors and misrepresentations in financial statements. Signup and view all the answers

What can unauthorized access to the G/L result in?

Errors, fraud, and misrepresentations in financial statements. Signup and view all the answers

Why is independent verification important in the context of GL/FRS control issues?

It helps ensure accuracy by reconciling journal vouchers and summaries. Signup and view all the answers

Which statement is true about access controls based on the text?

Access controls are crucial to limit database access to authorized individuals. Signup and view all the answers