Performance Measurement and Control
Financial and non-financial performance, responsibility centres, transfer pricing, public and not-for-profit performance and sustainability.
How to study ACCA Applied Skills
Build on Applied Knowledge, use the correct UK law and tax versions, practise workplace-style digital responses and keep each independent 50% pass decision visible.
Core concepts
Concept 1
A balanced performance system links strategy to financial, operational, customer, people and sustainability measures.
Exam cue: Identify the organisation's objective and responsibility centre before selecting a measure.
Concept 2
Divisional measures and transfer prices influence behaviour, autonomy, goal congruence and reported performance.
Exam cue: Test whether a transfer price supports both divisional decisions and group goal congruence.
Concept 3
Public and not-for-profit performance requires economy, efficiency, effectiveness and mission outcomes where profit is insufficient.
Exam cue: Separate controllable performance from external conditions and measurement distortion.
Risk pitfalls and guardrails
Using one short-term financial measure as a complete performance assessment.
Guardrail: Do not reuse a legal rule, tax amount, reporting format, audit phrase or finance formula without checking scope, date, units and evidence.
Comparing divisions without adjusting for different assets, risks or delegated authority.
Guardrail: Do not reuse a legal rule, tax amount, reporting format, audit phrase or finance formula without checking scope, date, units and evidence.
Treating low spending as effective public-service performance without assessing outcomes.
Guardrail: Do not reuse a legal rule, tax amount, reporting format, audit phrase or finance formula without checking scope, date, units and evidence.
Memory anchors
ROI
Return on investment divides controllable profit by controllable investment but can discourage beneficial investment.
Residual Income
Residual income subtracts a capital charge from controllable profit.
Goal Congruence
Goal congruence aligns local decisions with the organisation's overall objectives.
Three Es
Public and not-for-profit performance considers economy, efficiency and effectiveness.
Balanced Scorecard
A balanced scorecard combines linked financial and non-financial strategic perspectives.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
Management identifies dependable on-time delivery as essential to its competitive strategy. What term describes this prerequisite for success?
Which measure belongs to the customer perspective of a balanced scorecard?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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