The limitations of financial performance measures ________.
A) lead management to use accelerated depreciation methods
B) make it easy for companies to create goal congruence
C) lead management to use the net book value of assets
D) can be overcome by taking a broader view of performance with a balanced scorecard

Question

Quizplus · Accepted Answer

Financial performance measures have limitations that may not adequately capture the overall performance of a company. This can lead management to focus on short-term financial goals at the expense of long-term growth and sustainability. To overcome these limitations, companies can use a balanced scorecard approach, which incorporates both financial and non-financial metrics. This can provide a more comprehensive view of overall performance and help ensure that all areas of the business are aligned towards the same goals. Accelerated depreciation methods, net book value of assets, and goal congruence are not related to the limitations of financial performance measures.

The Limitations of Financial Performance Measures ________