Deck 11: Performance Measurement

Question 1

Which of the following statements is untrue?

A) Accountants' views of the measures that can be included in a management accounting performance measurement system have broadened considerably since the 1980s.
B) In the 1980s a concern arose that accounting systems put too much emphasis on a backward looking orientation.
C) In the 1980s a concern arose that accounting systems had too much of an inward looking tendency, with little attention given to an organisation's external commercial environment.
D) The 1980s saw growing importance attached to contribution margin management.
E) The 1980s saw development of a view that management accounting should develop more of a strategic orientation.

Answer 1

D

Question 2

Which of the following is not a shortcoming of financial performance measures?

A) Financial performance measures focus on results not causes.
B) Financial performance measures suffer from having a backward-looking orientation.
C) Financial performance measures focus on a limited performance dimension.
D) Financial performance measures can promote short-term focused behaviour.
E) All of the above are shortcomings of financial performance measures.

Answer 2

E

Question 3

Which of the following is not an example of the type of balance that should be sought in a performance measurement system?

A) Employ a mix of financial and non-financial performance measures.
B) Employ a mix of lag and lead performance measurement indicators.
C) Employ a mix of internal and external performance measures.
D) Employ a mix of labour and machine oriented performance measures.
E) Employ a mix of objective and subjective performance measures.

Answer 3

D

Question 4

Which of the following is not a bias found in traditional management accounting systems?

A) The performance measures have a financial orientation.
B) The performance measures have a lead indicator orientation.
C) The performance measures have an internal orientation.
D) The performance measures have an objective orientation.
E) All of the above orientations are found in traditional accounting performance measurement systems.

Question 5

Which of the following is not a key feature of the balanced scorecard?

A) It is structured around four key performance dimensions: financial, customer, internal processes and learning & growth.
B) It is a strategy based framework.
C) It represents a cause-effect integrated framework of performance measures.
D) Performance measures used at senior levels need to be translated into more operational performance measures at lower organisational levels.
E) Its performance measures have a qualitative and non-financial orientation.

Question 6

With respect to the balanced scorecard, which of the following statements is not true?

A) Financial performance measures tend to be lag indicators.
B) Customer performance measures provide a mix of lead and lag measures.
C) Internal process performance measures tend to be lead indicators.
D) Learning & growth performance measures tend to be lag indicators.
E) Lead indicators provide a pointer to the future.

Question 7

With respect to the balanced scorecard, training hours per employee and an employee motivation index are measures that relate to:

A) The financial performance dimension
B) The customer performance dimension.
C) The internal process performance dimension.
D) The learning & growth performance dimension.
E) None of the above.

Question 8

With respect to the balanced scorecard, the proportion of rooms meeting standard presentation is a measure that relates to:

A) The financial performance dimension
B) The customer performance dimension.
C) The internal process performance dimension.
D) The learning & growth performance dimension.
E) None of the above.

Question 9

Measures that monitor aspects of hotel performance that represent the outcome of actions already taken are called:

A) Outcome indicators
B) Lead indicators
C) Lag indicators
D) Summative indicators
E) Development indicators.

Question 10

Which of the following is not a lag indicator?

A) Proportion of returning customers
B) Labour cost per room sold
C) Share price growth
D) Training hours per employee
E) Average duration of customer relationship.

Question 11

With respect to the balanced scorecard, time to process check-ins and number of customer billing errors are measures that relate to:

A) The financial performance dimension
B) The customer performance dimension.
C) The internal process performance dimension.
D) The learning & growth performance dimension.
E) None of the above.

Question 12

Which of the following statements is untrue?

A) Accountants' views of the measures that can be included in a management accounting performance measurement system have broadened considerably since the 1980s.
B) Financial performance measures tend to focus on performance in a specific time period that has past.
C) Improved employee morale has a forward-looking dimension as it points towards a likely reduction in staff turnover and increase in the care and quality of service provided.
D) Financial measures are robust and can be used to measure a range of factors that include customer loyalty and employee morale.
E) If managers focus too much on short term performance, they may take steps that damage an organisation's long term success.

Question 13

Which of the following statements is untrue?

A) Several years may elapse before the negative implications of some cost-cutting measures are felt.
B) Lag measures monitor aspects of performance that represent the outcome of actions already taken.
C) A preference for accurate and verifiable measurement can result in organisations placing too much emphasis on those activities that lend themselves to objective measurement.
D) Traditional accounting performance measurement systems tend to be externally focussed and based on a high proportion of lead indicators.
E) The difference that can occur between the time when a managerial action is taken and the time when the financial results of the action are felt is a shortcoming of financial performance measurement systems.

Question 14

Which of the following is not one of the four key balance dimensions that should be considered when designing a performance measurement system:

A) Financial vs Non-financial measures
B) Lag vs lead measures
C) Internal vs external measures
D) Objective vs subjective measures
E) Timely vs untimely measures.

Question 15

Which of the following statements is untrue?

A) Lead measures focus on measuring the actions or factors that drive outcomes.
B) A performance measurement system should be linked to strategy and pursuit of an organisation's mission.
C) Timely reporting signifies that measures have greater relevance for management decision making and enables managers to take early corrective action if it is required.
D) Managers rarely have complete control over the outcomes of any particular aspect of an organisation's activities.
E) Performance measures should be stated in a negative manner, not a positive manner, in order to ensure that managers treat the measures seriously.

Question 16

With respect to the balanced scorecard, employee absenteeism is a measure that relates to:

A) The financial performance dimension
B) The customer performance dimension.
C) The internal process performance dimension.
D) The learning & growth performance dimension.
E) None of the above.

Question 17

Which of the following statements is untrue?

A) Accountants' views of the measures that can be included in a management accounting performance measurement system have evolved little since the 1980s.
B) Financial performance measures tend to focus on performance in a specific time period that has past.
C) Improved employee morale has a forward-looking dimension as it points towards a likely reduction in staff turnover and increase in the care and quality of service provided.
D) Financial measures have limitations as they cannot measure all dimensions of organisational performance, such as customer loyalty and employee morale.
E) If managers focus too much on short term performance, they may take steps that damage an organisation's long term success.

Question 18

Which of the following statements is untrue?

A) Several years may elapse before the negative implications of some cost-cutting measures are felt.
B) Lead measures monitor aspects of performance that represent the outcome of actions already taken.
C) A preference for accurate and verifiable measurement can result in organisations placing too much emphasis on those activities that lend themselves to objective measurement.
D) Traditional accounting performance measurement systems tend to be internally focussed and based on a high proportion of lag indicators.
E) The difference that can occur between the time when a managerial action is taken and the time when the financial results of the action are felt is a shortcoming of financial performance measurement systems.