CMA Final · Cost and Management Audit · Evaluation of Corporate Image
Which of the following is a lagging indicator rather than a leading indicator when a management auditor tracks corporate image over time?
The decline in brand-related sales share reported at year end is a lagging indicator, because it records the result of image change after it has happened. Engagement scores, weekly complaints and vendor payment timeliness provide early warning and are therefore leading indicators.
- AEmployee engagement score from an internal survey
- BNumber of social media complaints per week
- CDecline in brand-related sales share reported at year endCorrect
- DShare of vendor payments made within agreed terms
Explanation
Lagging indicators show the consequences of image after it has already changed, such as a fall in brand-related sales share reported at year end. Engagement scores, weekly complaints and payment timeliness give early signals of perception and so are leading indicators. Hence the year-end sales share is the lagging one.
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