any process that directs the activities of individuals toward the achievement of organizational goals.
the use of rules, regulations, and authority to guide performance.
control based on the use of pricing mechanisms and economic information to regulate activities within organizations.
control based on the norms, values, shared goals, and trust among group members.
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.
principle of exception
a managerial principle stating that control is enhanced by concentrating on the exceptions to or significant deviations from the expected result or standard.
the control process used before operations begin, including policies, procedures and rules designed to ensure that planned activities are carried out properly.
the control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed.
control that focuses on the use of information about previous results to correct deviations from the acceptable standard.
an evaluation of the effectiveness and efficiency of various systems within an organization.
an evaluation conducted by one organization, such as a CPA firm, on another.
a periodic assessment of a company's own planning, organizing, leading, and controlling processes.
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.
procedures used to verify accounting reports and statements.
activity-based costing (ABC)
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.
a report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity.
the values of the various items the corporation owns.
the amounts a corporation owes to various creditors.
the amount accruing to the corporation's owners.
profit and loss statement
an itemized financial statement of the income and expenses of a company's operations.
a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities.
a leverage ratio that indicates the company's ability to meet its long-term financial obligations.
return on investment (ROI)
a ratio of profit to capital used, or a rate of return from capital.
focusing on short-term earnings and profits at the expense of longer-term strategic obligations.
control system combining four sets of performance measures: financial, customer, business process, and learning and growth.
price charged by one unit for a good or service provided to another unit within the organization.