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CMA Final · Cost and Management Audit · Basics of Management Audit

A management auditor is assessing the 'effectiveness' of a company's marketing department. Which measure is the most appropriate test of effectiveness as distinct from efficiency?

Effectiveness means achieving the objectives set, so the best test is whether the department met its planned market share and sales targets. Expense ratios and calls per day measure efficiency of resource use, and training completion only shows activity, not goal achievement.

  1. ASelling expenses per rupee of sales compared to the previous year
  2. BNumber of sales calls made per salesperson per day
  3. CExtent to which the department achieved its planned market share and sales targetsCorrect
  4. DPercentage of sales staff who completed training

Explanation

Effectiveness measures achievement of intended objectives, so comparing actual market share and sales with planned targets is the test. The expense-per-rupee ratio and calls per day are input-output efficiency measures, and training completion is an activity indicator that does not show goals were achieved.

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