ACCA

This article outlines the issues which are central to the understanding and assessment of performance measurement. It has become increasingly important for organisations to develop systems of performance measurement which not only reflect the growing complexity of the business environment but also monitor their strategic response to this complexity. The need for good performance management is an ongoing issue which […]

This article provides a brief overview of two models which can assist accountants, not only in the determination of business strategy, but also in the appraisal of business performance. Porter’s Five Forces Model The use of Porter’s five forces model (see Figure 1) will help identify the sources of competition in an industry or sector. The model has similarities with

The term ‘charity’ refers to the practice of benevolent giving. Charities are established for general or specific philanthropic purposes. They are one type of not-for-profit organisation, but with several additional distinguishing features: they exist entirely to benefit defined groups in society as their purposes are philanthropic, they can usually avail themselves of favourable tax treatment, and for this reason have

This article explains some of these features. The first part of the article broadly describes the generic characteristics of not-for-profit organisations. The second part of the article takes a specific and deeper look at charities, which are one of the more important types of not-for-profit organisations. Several papers in the ACCA Qualification may feature questions on not-for-profit organisations. Although many

Public sector organisationsPublic sector organisations come in many shapes and forms. The most obvious examples are schools and hospitals, police forces and local transport providers, but there are many less visible organisations such as regulatory bodies. The objectives of public sector organisations are very different from those of commercial organisations, and this can make performance management more complicated. The following

Transfer prices are almost inevitably needed whenever a business is divided into more than one department or division In accounting, many amounts can be legitimately calculated in a number of different ways and can be correctly represented by a number of different values. For example, both marginal and total absorption cost can simultaneously give the correct cost of production, but

The second part of an article on Economic Value Added (EVA focuses on how to interpret the calculated EVA and its use as both an organisational and divisional performance measure. Relevant to ACCA Qualification Paper P5 In the first part of this article, we considered the rise in popularity of Economic Value Added – or EVA – as an alternative

In the first part of two articles, we look at an alternative performance measurement system, Economic Value Added – or EVA – which has gained widespread use among companies such as Siemens, Coca Cola and Herman Miller. Relevant to ACCA Qualification Paper P5 A successful performance measure evaluates how well an organisation performs in relation to its objectives. Since the

In this second article on the risks of uncertainty, we build upon the basics of risk and uncertainty addressed in the first article published in April 2009 to examine more advanced aspects of incorporating risk into decision making In particular, we return to the use of expected values and examine the potential impact of the availability of additional information regarding

Clearly, risk permeates most aspects of corporate decision making (and life in general), and few can predict with any precision what the future holds in store Risk can take myriad forms – ranging from the specific risks faced by individual companies (such as financial risk, or the risk of a strike among the workforce), through the current risks faced by