Question

Management by exception:

causes managers to be buried under voluminous paperwork.
means that all differences will be investigated.
means that only unfavorable differences will be investigated.
means that material differences will be investigated.

Answer 1

Answer: Statement D

Step-by-step explanation: In the management by exception, only those issues that can bring major differences in result are brought to the attention of management. Management by exception involves analyzing of financial and operational results of an entity.

Thus, from the above we can conclude that management by exception means investigating the material differences whether they are favorable or unfavorable.