The Controllability Principle states that the evaluation of a managers performance should consist of only those factors
Question:
The Controllability Principle states that the evaluation of a manager’s performance should consist of only those factors under a manager’s control. The limited empirical evidence, however, suggests that the allocation of uncontrollable costs for responsibility accounting purposes is widespread and that the controllability principle often does not appear to be applied in practice (Drury & El-Shishini 2009).
Which of the following statements are consistent with recent research relating to divisional performance measurement in the United Kingdom?
Note: There may be multiple answers.
Group of answer choices
The dominant divisional performance metric seems to be residual income.
Organizations may not fully apply the Controllability Principle when the focus is on the economic performance of the division, rather than the performance of the divisional manager.
Operating profit is commonly believed to be the most important metric used to evaluate the performance of divisional managers.
There is a significant and direct relationship between the level of autonomy for divisional managers and strict adherence to the Controllability Principle.
Statistics for Business and Economics
ISBN: 978-0134506593
13th edition
Authors: James T. McClave, P. George Benson, Terry Sincich