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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?

A

Economy

B

Efficiency

C

Effectiveness

D

Expertise

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?

A

(1) only

B

(2) only

C

Neither (1) nor (2)

D

Both (1) and (2)

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?

A

Delaying payments to payables

B

Shortening the useful economic life of a non-current asset

C

Overstatement of a prepayment

D

Overstatement of an accrual

Which of the following statements regarding standard setting is correct?

A

Imposed standards are more likely to be achieved

B

Managers across the organisation should be targeted using the same standards

C

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

D

Participation in standard setting is more motivating than where standards are imposed

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?

A

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

B

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

C

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

D

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