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CMA Final · Cost and Management Audit · Management Reporting Issues and Analysis

Which statement about the use of a 'balanced scorecard' in management reporting is correct?

The balanced scorecard reports performance through four perspectives: financial, customer, internal business process, and learning and growth. It supplements financial measures with non-financial ones, giving management a broader view. It is a voluntary internal tool and not a statutory report.

  1. AIt restricts reporting to financial measures such as profit and ROI
  2. BIt reports performance across financial, customer, internal business process and learning and growth perspectivesCorrect
  3. CIt is a statutory report required to be filed with the Registrar under company law
  4. DIt replaces budgeting and variance analysis entirely

Explanation

The balanced scorecard complements financial measures with non-financial perspectives: customer, internal process, and learning and growth. It is a voluntary management tool, not a statutory filing, and it does not replace budgets.

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