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CMA Final · Cost and Management Audit · Management Reporting Issues and Analysis

Which of the following is an essential feature of a management report that is meant to support decision making rather than merely record history?

A decision-oriented management report should be relevant and forward looking, presenting information in a form that points to action and, where suitable, recommendations. Reports full of historical entries, without comparisons or issued only annually, do not help managers decide in time.

  1. AIt should be forward looking and relevant to the decision, with clear recommendations where appropriateCorrect
  2. BIt should contain every historical entry made in the books of account
  3. CIt should avoid comparisons so that results are not influenced
  4. DIt should be prepared only once a year after the annual audit

Explanation

Decision support requires relevance, forward-looking content and clarity of action. Including all entries creates clutter, avoiding comparisons removes context, and annual reporting is too infrequent for control and decisions.

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