ACTIVITY BASED MANAGEMENT Definition

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ACTIVITY BASED MANAGEMENT (ABM) converts Activity Based Costing (ABC) into a system to manage an organization. Activity Based Management not only focuses on product, service, customer, channel costing, it also emphasizes: cost drivers (root cause analysis), action plans to improve to achieve strategic objectives, and, performance measures for activities and processes.

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EXPLANATORY, in accounting, is a paragraph added to an audit report to explain something, such as the reason for a qualified or adverse opinion.

EXTEND, in math, means to multiply one number by another (e.g. to test extensions is to test the accuracy of multiplication done by the client). To extend audit procedures is to apply additional audit procedures to obtain more evidence.

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