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Unit 3: Behavioural Considerations
Self Assessment Notes
Multiple Choice Questions:
5. The set of values or aspirations that underscore what an organization stands for or believes
in are referred to as:
(a) Policies (b) strategies
(c) Super ordinate (shared goals) (d) Objectives
6. Which of the following types of organizations depends on the values and beliefs of the
organization to steer performance?
(a) Bureaucracies (b) Market based
(c) Clan (d) None of the above
3.6 Functions of the Controller
The term controller refers to the person who is responsible for designing and operating the
management control system. In many organizations, the title of the person is chief financial
officer. The controller performs the following functions:
1. Designing and operating information and control systems.
2. Preparing financial statements and financial reports (including tax returns) for shareholders
and other external parties.
3. Preparing and analyzing performing reports, interpreting these reports for managers and
analyzing program and budget proposals from various segments of the company and
consolidating them into an overall annual budget.
4. Supervising internal audit and accounting control procedures to ensure the validity of
information, establishing adequate safe guards against theft and fraud and performing
operational audits.
5. Development of personnel in his function and participating in the education of management
personnel in matters relating to controller function.
It may be noted that Chief Financial Officer (CFO) is responsible for both the controller functions
(as discussed above) and also the treasury function. The controller and the treasurer report to
CFO. Since we have not discussed the treasurer’s function, we use the narrower term controller.
!
Caution Earlier, the controller (or CFO) was responsible for processing the information
required by the management control system. Currently, companies typically have a Chief
Information Officer (CIO) who carries on that function. In some companies, CIO reports to
the CFO whereas in others CIO reports to the senior management.
Relation to Staff Function: The controller’s function is a staff function. Though the controller is
usually responsible for the design and operation of the management control system which
collects and report information the use of this information to the responsibility of line
management CEO or business unit managers. The controller may be responsible for developing
and analyzing control measurements and for recommending actions to management. Other
possible work may include monitoring adherence to spending limits as laid down by Chief
executive, controlling the integrity of the accounting system and safe guarding company assets
from theft and broad (which is also known as Risk Management).
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