CMA Final · Cost and Management Audit · Management Reporting Issues and Analysis
In the context of management reporting, which feature best describes an exception report?
An exception report highlights only those items where actual performance departs from plan or standard beyond a set tolerance. It supports management by exception, letting managers focus on significant deviations instead of reading through every routine transaction.
- AIt lists every transaction of the period in date order
- BIt highlights only those items where actual results deviate from the plan beyond a set toleranceCorrect
- CIt summarises the statutory auditor's opinion for shareholders
- DIt presents projected cash flows for the next five years
Explanation
An exception report works on management by exception: only variances or events outside a predetermined tolerance are reported. Listing all transactions is a detailed ledger or journal report, not an exception report. Statutory opinions and long-range cash projections serve different purposes.
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