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

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

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

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)

A government is trying to assess schools by using a range of financial and non-financialfactors. One of the chosen methods is the percentage of students passing five exams ormore.

Which of the three Es in the value for money framework is being measured here

Economy

Efficiency

Effectiveness

Expertise

The public service funding system operates on the basis that performance against non-financial objectivesleads to a reduction in the level of funding. True or false

True

False

Economy means cost cutting. True or false

True

False

For a not for profit organisation with multiple objectives, which aspect of performance is the mostdifficult to assess

Financial

Economy

Efficiency

Effectiveness

A government body uses measures based on the 3Es to measure value for money generated by apublicly funded hospital. It considers the most important performance measure to be 'cost persuccessfully treated patient'

Which of the 3Es best describes the above measure

Externality

Economy

Efficiency

Effectiveness

Which TWO of the following are most likely to be performance measures for a not for profitorganisation

(1) Efficient resource allocation.

(2) Return on investment (ROI) and residual income (RI)

(3) Minimising the cost of resources used.

(4) Success measured against competition

1 and 2

2 and 3

3 and 4

1 and 3