Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which component is NOT typically a focus of financial managers?

1. Investments in new equipment

2. Credit policy formulation

3. Product pricing surveys

4. Distribution of dividends

The correct answer is: Product pricing surveys

Financial managers primarily concentrate on areas that directly influence the financial condition and performance of a company. This includes managing investments, creating credit policies, and overseeing dividend distribution. Focusing on investments in new equipment aligns with the financial manager's role of ensuring that the capital allocation generates a satisfactory return. Similarly, formulating credit policies is essential as it affects the company’s liquidity and risk management, helping to balance credit sales and collections more effectively. The distribution of dividends is also a critical area of focus, as it involves decisions regarding shareholder returns, which can influence investor satisfaction and company valuation. In contrast, product pricing surveys generally fall outside the typical scope of financial management. While understanding market dynamics is vital, pricing decisions are more closely linked to marketing and operational strategies rather than core financial management responsibilities. Financial managers typically use the outcomes of these surveys to assess potential impacts on revenue and profitability, but they are not primarily tasked with conducting them.