Which of the following is true about designing an accounting-based performance measure?
A) The decisions made in steps are followed in a hierarchial order.
B) The issues considered in each step are independent.
C) Management's beliefs are not required during the analyses.
D) Behavioral criteria are important when evaluating the steps.

Question

Quizplus · Accepted Answer

Behavioral criteria are important when evaluating the steps involved in designing an accounting-based performance measure. This is because, while the steps themselves may be independent, they are ultimately informed by the beliefs and behaviors of the people making the decisions. Therefore, understanding the behavioral criteria involved can help to ensure that the performance measure is designed in a way that will effectively motivate and incentivize the desired behaviors in the organization.

Which of the Following Is True About Designing an Accounting-Based