Tag: organization of commerce and management

Questions Related to organization of commerce and management

Arrange the process of control in proper form
(1) Follow through
(2) Establishment of goals and standards
(3) Corrective action
(4) Measurement of actual performance
Select the correct answer from the option given below -

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. (4), (@), (3), (1)

  2. (2), (3), (4), (1)

  3. (4), (1), (3), (2)

  4. (2). (4), (3), (1)

Show answer
Correct Option: D
Explanation:

The process of control is as follows:

  • The goals for the organisation and standards for the work are established
  • The actual performance by the employees are then measured
  • After the measurement is over, the results are observed and then corrective action is taken
  • Finally, there is a follow up procedure carried out by the management to ensure everything is as per standards and specific goals are achieved

Which of the following is/are non-traditional control device(s) of control system?

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. Zero base budgeting

  2. Standard costing

  3. Budgetary control

  4. All of above

Show answer
Correct Option: A
Explanation:

Zero based budgeting is a type of budget which is prepared from scratch. It is not based  on any previous budgets. All the expenses are freshly justified for each new period.

Which of the following would not be an appropriate procedure for testing the general control activities of an information system?

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. Inquiries of a client personnel

  2. Inspecting computer logs

  3. Testing for the serial sequence of source documenyts

  4. Examination of the organizational chart to determine the segregation of duties.

Show answer
Correct Option: C
Explanation:

For testing general control activities of an information system, testing for serial sequence of source documents is not an appropriate procedure. It is done only to ensure if financial statements are prepared accurately having all necessary transactions recorded.

When would "auditing around the computer" be appropriate?

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. When controls over the computer system are strong.

  2. When controls over the computer system are non-existent.

  3. When controls over the computer system are adequate.

  4. It is never appropriate to audit around the computer.

Show answer
Correct Option: B
Explanation:

Auditing around the computer is one of the methods of evaluating a client's computer controls. It picks source documents randomly and verifies the outputs with the inputs. This method can only exist when controls over the computer system are non-existent.

Miscellaneous
If a manager supervises large number of subordinate then it is known as -

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. Wider span of control/Flat organization

  2. Narrow span/ Tall organization

  3. Efficient span/ efficient organization

  4. Good span/ good organization

Show answer
Correct Option: A
Explanation:

The span of management is related to the horizontal levels of the organization structure. It is of two types- wide and narrow. With the wider span, there will be less hierarchical levels and hence flat.

When would an auditor typically not perform additional tests of a computer systems controls?

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. When the assessed level of control risk is at a minimum.

  2. When computer controls appear to be strong and risk is at a minimum.

  3. When controls appear to be weak .

  4. When inherent risk is st a maximum.

Show answer
Correct Option: C
Explanation:

Auditors sometimes perform additional tests to ensure that the computer systems control are working perfectly or not. If the controls appear to be weak there is no need to perform additional tests.

A cross relationship can be calculated using a formula of _______.

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. n

  2. n(n-1)

  3. n(2^n-1 + n-1)

  4. None of the above

Show answer
Correct Option: B
Explanation:

While the subordinates work under the same superior, they also interact amongst themselves. These are the relationships amongst subordinates known as cross relationship. The formula of cross relationship is n(n-1), where n= number of subordinates. 

According to Graicunas Theory, the maximum number of subordinates considered appropriate is ______.

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. 3

  2. 5

  3. 6

  4. 8

Show answer
Correct Option: C
Explanation:

According to Graicunas Theory, the maximum number of subordinates considered appropriate is 6. The formula for Gracuinas Theory is n(2n/2 + n + 1) where n= number of subordinates.

_______________ involves selective control or control at strategic points.

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. Management by exception

  2. Critical point control

  3. Span of control

  4. All of the above

Show answer
Correct Option: A
Explanation:

Management by exception is a special skill of managing by attending only to exceptionally important matters and taking vital decisions. Routine matters are to be handled by the lower- level officers. It involves selective control or control at strategic points.

Identify the benefit(s) of control by exception.

organization of commerce and management management by objectives (mbo) and management by exception (mbe) meaning and definition of mbo meaning and definition of mbe controlling

  1. Better utilization of resources

  2. Speeds up decision-making

  3. Provides motivation for employees

  4. All of the above

Show answer
Correct Option: D
Explanation:
The benefits of control by exception are:
  • It allows the manager to prioritise his time for important issues 
  • Since the manager devotes more time for important  issues it speeds up decision-making. 
  • The subordinates are given authority to make decisions on routine matters by the executives which provides them motivation.