CMA Final · Cost and Management Audit · Management Reporting Issues and Analysis
Which of the following is the most appropriate way to design reports for different levels of management in a company?
Reports should match the level of the user: top management receives summarised, strategic and exception-based information, while operating managers receive detailed and frequent information about the areas they control. This avoids information overload and supports responsibility-based control.
- AGive all levels the same detailed report so nobody is left out
- BGive top management summarised, strategic and exception-based information and operating managers detailed, frequent information on their own areasCorrect
- CGive top management detailed daily data and operating managers only annual summaries
- DGive reports only to the board, since operating managers do not need them
Explanation
Reporting should follow the responsibility and information needs of each level. Top management needs summarised, forward-looking and exception-based data, while operating managers need detailed and frequent data on matters they control. The options reversing this or giving identical reports cause overload or too little information.
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