Advanced A major feature of the world economy is the high proportion of employment in service industries, and the development of large service organisations such as banks, insurance companies, and hotel groups.

You are required to explain:

(a) how and why control of a large service organisation differs from that of a large manu¬ facturing organisation; (8 marks)

(b) the problems of tracing costs to products in service industries and the uses of the cost information that can be obtained; (6 marks)

(c) how the control of quality in service industries differs from that in manufacturing industry, and suggest three appropriate measures for quality in a large-scale competitive service organisation. Indicate briefly how the measurements would be made. (Possible examples of such industries include banks, insurance companies and large professional firms, but an organisation in another industry may be selected: the choice should be indi¬ cated.) (6 marks)

(Total 20 marks) CIMA Stage 4 Management Accounting -

Control and Audit