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ACCA Applied Knowledge · Management Accounting · Sources of data

A company wants a reliable estimate of average daily time spent by staff on a task. Which of the following is the main reason that using a published industry study (secondary data) could produce a misleading budget?

Published industry data may mislead because it was collected for another purpose, so its definitions, timing or conditions may differ from the company's own situation. That reduces its relevance, though secondary data can be quantitative and can often be assessed for reliability.

  1. AThe study may have been based on definitions, timing or conditions different from the company's ownCorrect
  2. BSecondary data can never be checked for accuracy
  3. CPublished studies are always biased towards large firms
  4. DSecondary data cannot be quantitative

Explanation

Secondary data was collected for another purpose, so definitions, units, time period or operating conditions may differ from the company's situation, reducing relevance. It is not true that it can never be checked, is always biased, or is never quantitative.

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