ACCA Applied Knowledge · Management Accounting · Sources of data
A manager is deciding whether to rely on a cost estimate. The estimate was obtained from a respected supplier's published price list, but the manager does not know whether the list is still current. Which quality of good information is the manager questioning, and which would a verified current quote improve?
The manager is questioning accuracy and the reliability of the source. A current, verified quote from the supplier would give a figure that can be trusted, whereas an out-of-date price list may be wrong even though the supplier is respected.
- AUnderstandability; improved by a shorter report
- BAccuracy and reliability of the source; improved by confirming the price is currentCorrect
- CCompleteness; improved by adding more suppliers' details only
- DCost-effectiveness; improved by buying a bigger database
Explanation
Doubt about whether the price list is up to date concerns accuracy and reliability of the information. A verified current quote gives an authoritative, accurate figure. Understandability is not at issue, and adding more suppliers addresses completeness rather than the currency of the figure.
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