Skip to eBook contentSkip to Chapter linksSkip to Content links for this ChapterSkip to eBook links

Chapter16: Managerial Control

Key Terms

p. 579

Accounting audits, p. 563 Procedures used to verify accounting reports and statements.

Activity-based costing (ABC), p. 563 A method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities.

Assets, p. 564 The values of the various items the corporation owns.

Balanced scorecard, p. 574 Control system combining four sets of performance measures: financial, customer, business process, and learning and growth.

Balance sheet, p. 564 A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity.

Budgeting, p. 559 The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences; also called budgetary controlling.

Bureaucratic control, p. 551 The use of rules, regulations, and authority to guide performance.

Clan control, p. 551 Control based on the norms, values, shared goals, and trust among group members.

Concurrent control, p. 555 The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed.

Control, p. 550 Any process that directs the activities of individuals toward the achievement of organizational goals.

Current ratio, p. 566 A liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities.

Debt-equity ratio, p. 566 A leverage ratio that indicates the company's ability to meet its long-term financial obligations.

External audit, p. 559 An evaluation conducted by one organization, such as a CPA firm, on another.

Feedback control, p. 555 Control that focuses on the use of information about previous results to correct deviations from the acceptable standard.

Feedforward control, p. 555 The control process used before operations begin, including policies, procedures, and rules designed to ensure that planned activities are carried out properly.

Internal audit, p. 559 A periodic assessment of a company's own planning, organizing, leading, and controlling processes.

Liabilities, p. 564 The amounts a corporation owes to various creditors.

Management audit, p. 559 An evaluation of the effectiveness and efficiency of various systems within an organization.

Management myopia, p. 567 Focusing on short-term earnings and profits at the expense of longer-term strategic obligations.

Market control, p. 551 Control based on the use of pricing mechanisms and economic information to regulate activities within organizations.

Principle of exception, p. 554 A managerial principle stating that control is enhanced by concentrating on the exceptions to or significant deviations from the expected result or standard.

Profit and loss statement, p. 564 An itemized financial statement of the income and expenses of a company's operations.

Return on investment (ROI), p. 566 A ratio of profit to capital used, or a rate of return from capital.

Standard, p. 552 Expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed.

Stockholders' equity, p. 564 The amount accruing to the corporation's owners.

Transfer price, p. 575 Price charged by one unit for a good or service provided to another unit within the organization.

2011 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.