ACCA Applied Knowledge · Management Accounting · Performance measurement - application
Which of the following is a commonly stated limitation of the balanced scorecard?
A common limitation is that the balanced scorecard can contain too many measures, which makes it hard to focus on priorities and may cause information overload. It does include customer measures and non-financial measures, and it can be used by non-profit organisations.
- AIt concentrates only on short-term financial results
- BIt ignores the views of customers
- CIt can include too many measures, making it hard to focus on prioritiesCorrect
- DIt cannot be applied to non-profit organisations
Explanation
The balanced scorecard uses four perspectives, so it does not focus only on short-term financial results and it includes customer views. It can be used in non-profit bodies. A real drawback is that having many measures can blur priorities and cause information overload.
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