PDF Management Accounting - Sample Assignment

Running head: MANAGEMENT ACCOUNTING
Management Accounting: Design of Performance Measurement System
Student Name:
University Name:

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Table of Contents
1. Introduction..................................................................................................................................2
2. Infographic for performance measurement system.....................................................................3
3. Design and Operation of the performance measurement system................................................4
3.1 Justification for selecting the system.....................................................................................5
4. Conclusion...................................................................................................................................6
Bibliography....................................................................................................................................7

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1. Introduction
This report is focused on performance measurement system for an organization “KPMG”
so that they can measure their financial performance. An infographic has been designed to
present working and key aspects of the financial performance system. The detailed discussions
has been presented in this report to illustrate the design and operation of performance
measurement system for the organization.

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2. Infographic for performance measurement system

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3. Design and Operation of the performance measurement system
Performance measurement is long recognized by academics as well as practitioners from
a wide variety of functional disciplines. This concept is prominent from the past and is required
in almost any field or sector to determine the performance based on certain areas or criteria. A
performance measurement system is required to identify the key issues which is more flexible
and suitable to measure performance instead of detailing specific measures. There are basically
two types of Performance measurement system being widely used that is Balance Scorecard and
EFQM Business Excellence Model. Both the systems provide a structure approach so that
opportunities for improvement can be identified along with the threats, strategy of translating
companies. The systems help organizations to achieve desired goals and their targets by
executing specific tasks.
The system that has been selected for the organization “KPMG” for their Audit
department to measure the financial performance is Balance Scorecard. This system fulfills the
three basic functions that is the measurement system along with the strategic management
system and the tool required for communication. The core method being used by this system is
elaborating and implementing vision and mission of the organization into fixed targets. This
system uses a unique technique for balancing strategies of the organization. This system would
eventually ensure equality of the short as well as long term goals in context to the required inputs
and outputs. The system converts the intelligible set of financial as well as non-financial
indicators of performance so that the organization is able to measure their performance suitably
to excel in future. The introduction of Balance Scorecard system means the goals and indicators
along with strategic actions are assigned to a concrete view of the organization. The system will
provide clarity of vision and the strategy that has been adopted by the organization. The

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organization will be able to constantly monitor their strategy in terms of financial performance so
that they could achieve better benefits. Balance Scorecard is divided into four major components
that is financial, customer, business process and growth with learning out of which financial
component will be utilized particularly for the Audit department of KPMG. The financial
component will help to measure the performance of Audit department in KPMG in terms of the
financial aspects. The introduction of this system in the organization will provide enhanced
financial performance which in turn would facilitate business benefits.
3.1 Justification for selecting the system
Balance Scorecard has been chosen for this particular organization as it would help to
describe, implement and manage strategy throughout the organization at all levels. This system
will assist the organization to develop better performance system rather than a system which is
solely depending on the financial measures. This system will help the organization to provide the
with facility to balance them in context to perspectives related to four strategy that is finance,
customer, internal processes and overall learning as well as growth. The balancing of the
strategies means equability among the short and long term goals with the required inputs and
outputs. The system will assist the organization to measure their performance in terms of
external and internal factors with respect to financial and non-financial indicators. The chosen
system will help to integrate performance measures in terms of operational objectives at a
suitable level. The system is not being used as an improvement tool which emerges as a
drawback but it is used a controlling tool which will help the organization to retain their financial
performance. The system concentrates on the strategic goals of the organization so that could
gain competitive advantage in the market by fulfilling their business objectives. The system will

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help the organization in consistent monitoring of their strategy. Finally, the system will also offer
clarity about the vision and strategy being adopted by the organization.
4. Conclusion
From the overall discussions, it can be concluded that chosen performance measurement
system is suitable for the organization. The chosen performance measurement system will help
KPMG to measure their financial performance so that they can make strategic decisions for
future. The design the system is such that it would help them to achieve business benefits based
on the statistics that could be retrieved from the system.

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Bibliography
Akkermans, H.A. and Van Oorschot, K.E., 2018. Relevance assumed: a case study of balanced
scorecard development using system dynamics. In System Dynamics (pp. 107-132). Palgrave
Macmillan, London.
Kenny, G. and Bourne, M., 2015. Performance measurement. Wiley Encyclopedia of
Management, pp.1-3.
Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate strategy.
Auerbach Publications.
Shen, Y.C., Chen, P.S. and Wang, C.H., 2016. A study of enterprise resource planning (ERP)
system performance measurement using the quantitative balanced scorecard
approach. Computers in Industry, 75, pp.127-139.
Upadhaya, B., Munir, R. and Blount, Y., 2014. Association between performance measurement
systems and organisational effectiveness. International Journal of Operations & Production
Management, 34(7), pp.853-875.
Valmohammadi, C. and Ahmadi, M., 2015. The impact of knowledge management practices on
organizational performance: A balanced scorecard approach. Journal of Enterprise Information
Management, 28(1), pp.131-159.