ACCA PM · Chapter 1 · Question 8 of 9
Which of the following best explains why traditional management accounting reports are often considered inadequate for strategic planning?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) They focus mainly on internal, historical and financial data, whereas strategic planning needs external, forward-looking and non-financial information
Explanation
Strategic planning is long-term and outward-looking, requiring information about markets, competitors and the wider environment, much of it non-financial and uncertain. Traditional management accounting systems mainly record internal, historical financial data, which limits their usefulness for this purpose.
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