Which of the following statements is true of a post-investment audit?
A) It encourages managers to overstate the expected cash inflows from projects and accept projects they should reject.
B) It helps managers avoid optimistic estimate errors.
C) It does not help senior management to recognize problems in the implementation of the project.
D) It provides managers with feedback about the performance of a project to determine if any variance from expectations were the result of the overly optimistic estimates of because of implementation issues.

Question

Quizplus · Accepted Answer

A post-investment audit provides managers with feedback about the performance of a project to determine if any variance from expectations were the result of overly optimistic estimates or implementation issues. It helps identify areas where improvements can be made and avoids the replication of errors in future projects. It does not encourage managers to overstate expected cash flows or hide implementation issues as it is a tool used to evaluate the success of the project.

Which of the Following Statements Is True of a Post-Investment