Question 1: Select the most appropriate answer for the below statements:

1. Control involves:
   1. Establishing and evaluating benchmarks
   2. Evaluating actual performance by comparing with benchmarks established
   3. Measuring actual performance
   4. Evaluating benchmarks
2. Management control is:
   1. Control conducted by accountants
   2. Control conducted by quality-assurance staff
   3. Control by staffs as independent check on performance
   4. Control conducted by managers
3. Informal factors in a good goal congruence process will:
   1. Reduce formal factors, and thus simplifying formal management control systems
   2. Influence the design of formal factors
   3. Increase formal factors
   4. Not influence the design of formal factors
4. In a functional model, functional managers have to control:
   1. Expenses of functions
   2. Outputs of functions
   3. Expenses and outputs of functions
   4. Profits of functions
5. Macro control over transfer pricing is conducted because of adverse impact of transfer pricing on:
   1. Tax collection
   2. Balance of trade
   3. Balance of payments
   4. All of the above statements
6. Revenue and profit centers are different in terms of:
   1. Inputs of centers
   2. Outputs of centers
   3. Objectives of centers
   4. All of the above statements
7. Expense and profit centers are different in terms of:
   1. Outputs of centers
   2. Objectives of centers
   3. A and B
   4. Inputs of centers
8. Management control in auditing firms should focus on:
   1. Costs, because auditors have the tendency of much emphasizing on quality and disregard cost implications
   2. Quality, because poor quality of audits can exert very wide negative impacts on so many users of audit results
   3. A and B
   4. A or B
9. For control purposes, budgets should be:
   1. Feasible and challenging

9. 2. Comprehensive and detailed
   3. A and B
   4. A or B
10. Management control in service organizations should:
    1. Use both financial and nonfinancial measures
    2. Use financial measures only
    3. Use nonfinancial measures only
    4. Use budgets rather than Balanced Score cards