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CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority

A manager is given wide authority to commit company funds but is never required to report on or justify how the funds were used. Which is the most likely consequence?

The most likely consequence is risk of misuse of authority. When a manager holds wide power over funds but never has to report or justify decisions, nothing checks that power. Accountability is the balancing mechanism, so its absence invites arbitrary or careless use of authority.

  1. AGreater accountability and tighter control
  2. BRisk of misuse of authority because authority is not balanced by accountabilityCorrect
  3. CAutomatic improvement in morale and zero conflicts
  4. DElimination of the need for responsibility

Explanation

Authority without a matching accountability mechanism lets power be exercised arbitrarily, inviting abuse and poor decisions. The other options contradict this because the stem describes no reporting. Accountability is the check that balances authority.

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