NATIONAL STANDARDS: United States - BUSPROG - Reflective Thinking
STATE STANDARDS: United States - v1 - ACBSP-APC-26 - Management Functions
United States - v1 - AICPA-08 - FN-Decision Modeling
United States - v1 - IMA-14 - Decision Analysis
KEYWORDS: Bloom's - Applying
Chapter 1
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NOTES: Time Estimate - 15 min.
DATE CREATED: 10/7/2016 9:26 AM
DATE MODIFIED: 10/7/2016 9:26 AM
QUESTION ID: JFND-GO33-GINU-1C3S
QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTTU-Y3DF-GCHD-Q3DD-8Y41-4CUR-GRH1-43UR-GO4N-43UG-
GOHN-43JW-GAHU-1CTT-GIDI-GWN8-EPRW-EMJA-8FUD-1CJS-GAHS-CPUD-GCSU-
YCTU-CESS-EQMR-GOSU-C3J1-GCSU-RCJA-CA5G-R3MG-E7JI-YT4D-JFNN-4OTI-
GO4W-NQNBEE
154. What is the role of the controller in an organization? Describe some of the activities over which he or she has control.
ANSWER: The controller is responsible for both internal and external accounting. These responsibilities
usually include such diverse activities as taxes, SEC reports, cost accounting, budgeting,
internal auditing, financial accounting, and systems accounting.
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
LEARNING OBJECTIVES: COCM.HANS.18.1-3 - LO: 01.03
NATIONAL STANDARDS: United States - BUSPROG - Ethics
STATE STANDARDS: United States - v1 - ACBSP-APC-26 - Management Functions
United States - v1 - AICPA-06 - BB-Resource Management
United States - v1 - IMA-07 - Cost Management
KEYWORDS: Bloom's - Understanding
NOTES: Time Estimate - 10 min.
DATE CREATED: 10/7/2016 9:26 AM
DATE MODIFIED: 10/7/2016 9:26 AM
QUESTION ID: JFND-GO33-GINU-1C3I
QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTTU-Y3DF-GCHD-Q3DD-8Y41-4CUR-GRH1-43UR-GO4N-43UG-
GOHN-43JW-GAHU-1CTT-GIDI-GWN8-EPRW-EMMD-8Y4U-KATW-CEHG-EPDN-
GASS-EATA-CRSU-EC3O-GOSU-13JO-COSS-ECTZ-GA5S-E3JZ-E7JI-YT4D-JFNN-
4OTI-GO4W-NQNBEE
155. You are a management accountant for the Eastern Division of Strong Enterprises. Your longtime friend, Alana
Rodriguez, is the Eastern Division manager. Alana was instrumental in helping you obtain your current position. Because
the manager's annual bonus is based on the amount of profit the Eastern Division reports for the year, Alana has asked you
to "massage the numbers" to make the Eastern Division appear more profitable.
Considering the Standards of Ethical Conduct for Management Accountants, how would you respond to Alana Rodriguez'
request?
ANSWER: According to the Standards of Ethical Conduct for Management Accountants, management
accountants have a responsibility to "perform their professional duties in accordance with
relevant laws, regulations, and technical standards." Therefore, if "massaging the numbers"
involves violating any laws, regulations, or technical standards, it would violate the
Standards of Ethical Conduct for Management Accountants. In addition, the Standards of
Ethical Conduct for Management Accountants indicate that management accountants have a
responsibility to communicate information fairly and objectively and to disclose all relevant
information that could be expected to influence a user.
POINTS: 1
Chapter 1
Copyright Cengage Learning. Powered by Cognero. Page 86
DIFFICULTY: Challenging
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
LEARNING OBJECTIVES: COCM.HANS.18.1-4 - LO: 01.04
NATIONAL STANDARDS: United States - BUSPROG - Ethics
STATE STANDARDS: United States - v1 - ACBSP-APC-26 - Management Functions
United States - v1 - AICPA-11 - FN-Reporting
United States - v1 - IMA-16 - Business Applications
KEYWORDS: Bloom's - Applying
NOTES: Time Estimate - 15 min.
DATE CREATED: 10/7/2016 9:26 AM
DATE MODIFIED: 10/7/2016 9:26 AM
QUESTION ID: JFND-GO33-GINU-1C3W
QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTTU-Y3DF-GCHD-Q3DD-8Y41-4CUR-GRH1-43UR-GO4N-43UG-
GOHN-43JW-GAHU-1CTT-GIDI-GWN8-EPRW-EMJZ-CO5G-GCJT-GH5D-RC5F-GYSU-
1PTU-8RSS-GC3W-GOSU-EAMR-GYSU-CPT1-GF1S-EA3I-E7JI-YT4D-JFNN-4OTI-
GO4W-NQNBEE
156. Discuss how the goal of profit maximization is affected by ethical considerations. What incentives are there for
managers to manipulate accounting data in unethical ways in order to increase profits?
ANSWER: The objective of profit maximization should be constrained by the requirement that profits
are achieved through legal and ethical means. Because performance evaluation and rewards
for managers often are linked to reported profits, managers might manipulate accounting data
to show increased profits in order to increase their own bonuses. The evaluation and reward
system should be designed to discourage unethical behavior.
POINTS: 1