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CMA Final · Cost and Management Audit · Evaluation of Corporate Image

Which of the following is a limitation faced by a management auditor when evaluating corporate image?

The main limitation is that corporate image is subjective and perception based, so it cannot be measured precisely. No statutory formula exists, net profit alone does not determine it, and stakeholder opinion is the very foundation of image, which makes evaluation depend on surveys and judgement.

  1. AImage is largely subjective and perception based, so it is difficult to measure with precisionCorrect
  2. BImage can always be computed by a fixed statutory formula
  3. CImage is determined solely by the reported net profit
  4. DImage has no connection with stakeholder opinion

Explanation

Corporate image rests on perceptions, which vary by group and over time, so measurement is imprecise and depends on surveys and judgement. No statutory formula exists, profit alone does not decide it, and stakeholder opinion is its very basis.

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