Exam 13: Performance Measurement and the Balanced Scorecard

A balanced scorecard is a measurement system that incorporates financial measures that tell the result of actions already taken and operational measures that are the drivers of future financial performance.

The Friendly Bank has been offering online banking facilities for several months, and wants to determine whether customer usage has increased over the period since the inception of the facilities. Which of the following KPIs would be the most appropriate to achieve the bank's outcome?

A business introduced employee training for all production staff, and discovered that product quality improved, which resulted in an increase in sales and ultimately profit. Based on this information, which of the following statements would be the least correct?

People constantly use information to evaluate their environment and help them make important decisions. One such evaluation method used by corporations is called the 'Balanced Scorecard'.

Of the following statements regarding strengths and weaknesses of measures, which statement does not apply to non-financial measures?

Benefits of the balanced scorecard include:

Which of the following is an example of a performance measure that is appropriate for an investment centre but not a profit centre or cost centre?

A key performance indicator that measures which direction a firm should be taking is termed a strategic KPI.

Which of the following statements regarding performance assessment is incorrect?

The Big Bed Furniture chain has identified as one of its major KPIs the average number of items bought per customer visit. In identifying this KPI, which of the following perspectives is Big Bed most likely to be targeting?

The balanced scorecard:

Which of the following factors under management's control distinguishes an investment centre from a profit centre?

The balanced scorecard:

Which of the following would not be categorised as an outcome KPI?

Participation by responsible managers in the setting of budgets enhances the probability of effective planning and control within an organisation.

Over the past two years, the Orange Bank has closed numerous country branches and significantly reduced staff numbers. In the same period, the bank has posted record profits and paid its top executives significant salary increases. However, the bank has also received a significant increase in customer complaints. In an attempt to redress the situation, the bank has decided to improve its image, and one major focus is to determine the average waiting time for calls to be answered. Which of the following would best describe this KPI?

A manager is responsible for all costs of producing product X but does not set the selling price. This means the manager is responsible for a cost centre.

An operating KPI measures whether a business is moving in the right direction.

The finance director of AKP Ltd has observed that outstanding debtors have significantly increased in the past two months. An examination of possible causes has determined that part of the problem may be the new computerised invoicing system, which, due to input errors, has sent a number of accounts to wrong addresses. The director has asked the credit department to determine how many accounts have been sent to wrong addresses. This indicator would be classified as:

An objective or outcome of performance assessment in an organisation is not to: