ACCA Strategic Professional · Advanced Performance Management · Management reports
Karlow Retail's board receives a quarterly report showing revenue, profit and customer complaints. The CFO wants the report to support forward-looking decisions rather than just explain the past. Which change is most consistent with this aim?
Including rolling forecasts and leading indicators such as order pipeline and satisfaction trends makes the report forward looking. These help the board anticipate results and act early, whereas more historical variance analysis, extra decimals or narrative-only reporting do not improve the predictive value.
- AAdding a detailed variance analysis for the prior year only
- BIncluding rolling forecasts and leading indicators, such as order pipeline and customer satisfaction trends, alongside actual resultsCorrect
- CReplacing all numbers with narrative commentary
- DIncreasing the number of decimal places reported
Explanation
Forward-looking reporting uses forecasts and leading indicators that predict future performance. Historical variances and extra precision remain backward looking, and narrative alone removes the quantitative basis for decisions.
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