Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 13TF
Creating an expectation of punishment causes firm morale to deteriorate and often results in lower productivity.
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An objective of responsibility accounting is to:
a) Provide information that helps managers make optimal decisions.
b) Reward managers who have unfavorable variances.
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c) Decrease productivity.
d) Punish managers for variances based on factors outside of their control.
Cost accounting logic can lead managers to keep their resources busy all the time, increasing productivity with no regard to demand. What is the negative result of this effect?
Why might a manager exhibit a behavioral tendency to inappropriately consider sunk costs in making a decision?
Chapter 4 Solutions
Fraud Examination
Ch. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Why is it important to inform outside vendors of...Ch. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 1TFCh. 4 - Prob. 2TFCh. 4 - Prob. 3TFCh. 4 - Prob. 4TFCh. 4 - Prob. 5TFCh. 4 - Prob. 6TFCh. 4 - Prob. 7TFCh. 4 - Prob. 8TFCh. 4 - Prob. 9TFCh. 4 - Prob. 10TFCh. 4 - Prob. 11TFCh. 4 - Prob. 12TFCh. 4 - Creating an expectation of punishment causes firm...Ch. 4 - 1. People will often be dishonest if they are...Ch. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 10MCQCh. 4 - Prob. 11MCQCh. 4 - Prob. 12MCQCh. 4 - Prob. 13MCQCh. 4 - Prob. 1SCCh. 4 - Prob. 2SCCh. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Case 5 While performing an audit of TCC...Ch. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Prob. 13SCCh. 4 - Prob. 14SC
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Managers often assume a strictly linear relationship between cost and the level of activity.How can this practice be defended in light of the fact that many costs are curvilinear?arrow_forwardManagers often assume a strictly linear relationship between cost and volume. How can thispractice be defended in light of the fact that many costs are curvilinear?arrow_forwardManagers often assume a strictly linear relationship between cost and the level of activity.Under what conditions would this be a valid or invalid assumption?arrow_forward
- Managers should pay little attention to bottleneck operations since they have limited capacity for producing output. True or False True Falsearrow_forwardWhy is a declining margin of safety over a period of time an issue of concern to managers?arrow_forwardUsing the revenue per employee ratio as an indicator for productivity will lead to outsourcing of personnel, even when it increases cost.True or false? And why?arrow_forward
- Explain with an example why managers find it difficult to adopt a decision alternative even when the relevance cost analysis shows the superiority of this decision alternative to maximize operating income over other decision alternatives. What might the company do to reduce the pressure on management and decrease the ethical conflict?arrow_forwardCriticisms of return on investment as the only performancemeasure include:a. ROI focuses on short-term decisions.b. ROI is focused on only one component of the value chain.c. Managers evaluated based only on ROI are sometimesmotivated not to make an investment that is in the bestinterest of the organization as a whole.d. All of the above.arrow_forwardWhy should managers worry about product overcosting or undercosting?arrow_forward
- Explain how absorption costing can enable a manager to increase production solely for the purpose of inflating profit but prevents a manager from doing this if variable costing is used.arrow_forwardWhich of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.arrow_forwardPerverse Effects of Some Performance Measures. There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For example, suppose the marketing department is held responsible only for increasing the performance measure “total revenues.” Increases in total revenues may be achieved by working harder and smarter, but they can also usually be achieved by simply cutting prices. The increase in volume from cutting prices almost always results in greater total revenues: however, it does not always lead to greater total profits. Those who design performance measurement systems need to keep in mind that managers who are under pressure to perform may take actions to improve performance measures that have negative consequences elsewhere. Required: For each of the following situations, describe actions managers might take to show improvement in the performance measure…arrow_forward
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