The internal audit activity has undertaken an audit of the shipping and receiving department of a department stOrE chain. The best engagement tool for this purpose most likely is
Answer(s): D
Process function) benchmarking studies operations of organizations with similar processes regardless of industry. Thus, the benchmark need not be a competitor Or even a similar entity}. This method may introduce new ideas that provide a significant competitive advantage. The advantage of process benchmarking is that it permits a wider choice of benchmarked organizations. Thus, the best practices for a shipping and receiving function may not be found in the same industry}.
Using the balanced scorecard approach, an organization evaluates managerial performance based on
Answer(s): B
The trend in managerial performance evaluation is the balanced scorecard approach. Multiple measures of performance permit a determination as to whether a manager is achieving certain objectives at the expense of others that may be equally or more important. These measures may be financial or nonfinancial and usually include items in four categories: I) financial; 2) customer; 3) internal business processes; and 4) learning, growth, and innovation.
On a balanced scorecard, which of the following is not a customer measure?
Customer measures include market share and its trend, service response time, delivery performance, warranty returns, expense, complaints, and survey results. Economic value added, or E1 A, is a financial measure.
Under the balanced scorecard concept, employee satisfaction and retention are measures used under which of the following perspectives?
Answer(s): C
The balanced scorecard is an accounting report that connects the firm's critical success factors CSFs) determined in a strategic analysis to measures of its performance. CSFs are financial and nonfinancial measures. For the learning, growth, and innovation perspective, the CSFs may be development of new products, promptness of their introduction, human resource development, morale, and competence of the workforce. Measures of employee satisfaction, retention, and competence may include RD personnel qualifications, hours of training, skill set levels attained, personnel turnover, and personnel complaints and survey results.
On a balanced scorecard, which is more of an internal process measure than an external- based measure?
Answer(s): A
Cycle time is the manufacturing time to complete an order. Thus, cycle time is strictly related to internal processes. Profitability is a combination of internal and external considerations. Customer satisfaction and market share are related to how customers perceive a product and how competitors react.
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