Which of the following statements, regarding the existence of multiple objectives in not-for-profit organisations, is/are correct

(1) They ensure goal congruence between stakeholders.

(2) Compromise between objectives can be problematic.

(1) only

(2) only

Both (1) and (2)

Neither (1) nor (2)

A government is looking at assessing hospitals by reference to a range of both financial andnon-financial factors, one of which is survival rates for heart by-pass operations andanother is ‘cost per successfully treated patient’.

Which of the three E’s in the ‘Value For Money’ framework is not measured here

Economy

Effectiveness

Efficiency

Externality

Explain the potential benefits of operating a transfer pricing system within a divisionalisedcompany.

Division Y of Chardonnay currently has capital employed of $100,000 and earns an annual profitafter depreciation of $18,000. The divisional manager is considering an investment of $10,000 inan asset which will have a ten-year life with no residual value and will earn a constant annual profitafter depreciation of $1,600. The cost of capital is 15%.

Calculate the following and comment on the results.

(i) The return on divisional investment before and after the new investment

(ii) The divisional residual income before and after the new investment

Divisional performance measures

【論述題】

Compare and contrast the use of residual income and return on investment in divisionalperformance measurement, stating the advantages and disadvantages of each.

The following statements have been made about measuring performance in not-for-profitorganisations:

(1) Output does not usually have a market value, and it is therefore more difficult tomeasure effectiveness.

(2) Control over the performance can only be satisfactorily achieved by assessments of‘value for money’.

Which of the above statements is/are true

(1) only

(2) only

Neither (1) nor (2)

Both (1) and (2)

The senior manager is suspicious of a local manager’s accounts and thinks that the profitperformance may have been overstated.

Which of the following would be a plausible explanation of an overstatement of profit

Delaying payments to payables

Shortening the useful economic life of a non-current asset

Overstatement of a prepayment

Overstatement of an accrual

Which of the following statements regarding standard setting is correct

Imposed standards are more likely to be achieved

Managers across the organisation should be targeted using the same standards

Standards should be set at an ideal level with no built in stretch

Participation in standard setting is more motivating than where standards areimposed

When setting performance measurement targets it should be considered that there is thepossibility that managers will take a short term view of the company and may even betempted to manipulate results in order to achieve their targets.

Which of the following would assist in overcoming the problems of short-termism andmanipulation of results

Rewards should be linked to a wider variety of performance measures includingsome nonfinancial measures

Managers should only be rewarded for the results achieved in their own departments

Any capital investment decision should be judged using the payback method ofinvestment appraisal

Setting targets involving the overall performance of the company will be moremotivating for managers

Stakeholders will have different objectives and companies may deal with this by having arange of performance measures to assess the achievement of these objectives.

Which of the following statements is true in relation to stakeholders

The aim of all performance measures should be to increase short term profit

The only interest of the government is that companies pay their taxes

Shareholders will be looking for increasing dividends and increased share price

Only internal stakeholders need to be considered by companies