The following statements have been made about zero base budgeting.
(1) The zero base budgeting process seeks to identify long-term benefits and improvements, even if they are sometimes made at the expense of short-term profitability.
(2) A barrier to the use of zero base budgeting is the possibility that management may not have the skills to apply it.
Which of the above statements is/are true?
The answer is: 2 only.
Only the second statement is correct. The zero base budgeting process seeks to identify short-term benefits and improvements, and there is a risk that these may be implemented at the expense of longer-term objectives. ZBB calls for management skills that managers often lack.
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A government is trying to assess schools by using a range of financial and non-financial factors. One of the chosen methods is the percentage of students passing five exams or more.
Which of the three Es in the value for money framework is being measured here?
The following statements have been made about measuring performance in not-for-profit organisations:
(1) Output does not usually have a market value, and it is therefore more difficult to measure 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?
The senior manager is suspicious of a local manager’s accounts and thinks that the profit performance may have been overstated.
Which of the following would be a plausible explanation of an overstatement of profit?
Which of the following statements regarding standard setting is correct?
When setting performance measurement targets it should be considered that there is the possibility that managers will take a short term view of the company and may even be tempted to manipulate results in order to achieve their targets.
Which of the following would assist in overcoming the problems of short-termism and manipulation of results?
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