A company, which has many branch stares, has decided to use its best-performing stare as a benchmark organization far the purpose of analyzing the accuracy and reliability of branch stare financial reporting.
Which one of the fallowing is the most likely measure to be included in a financial benchmark?
- High turnover of employees.
- High level of employee participation in setting budgets.
- High amount of bad debt write-offs. IT
- High number of suppliers.
Answer(s): C
Explanation:
Internal benchmarking is the application of best practices in one part of the organization e.g., a high-performing branch store) to its other parts other branches). This process requires, among other things, use of quantitative and qualitative measures. A key indicator financial performance measurement is the amount of bad debt write-offs. A high level of bad debt write-offs could indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt write-offs may result-Fr-am recording fictitious sales.