ACCA Applied Knowledge · Management Accounting · Sources of data
Which of the following is a disadvantage of using external sources of data rather than internal sources for management accounting purposes?
External data may be less reliable or not tailored to the organisation's needs, because it is gathered by others for different purposes. It can be used for forecasting and is often public, and it is not always cheaper than internal data.
- AExternal data is never available to the public
- BExternal data may be less reliable or not tailored to the organisation's specific needsCorrect
- CExternal data cannot be used for forecasting
- DExternal data is always cheaper to collect than internal data
Explanation
External data is collected by others for their own purposes, so it may not match the organisation's needs and its accuracy may be uncertain. It is often available publicly and is used for forecasting. It is not always cheaper, so the other statements are false.
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