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Performance Evaluations and Accounting Function

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Both financial information and non-financial information is used to measure performance for product lines, divisions, and individuals associated with the business. Reflect on using financial information to evaluate performance in for a business segment and a manager in charge of a business segment.


Accounting was developed to record and summarize transactions and for control purposes. How is accounting used today, other than for its original intent? Is financial information a good tool for performance evaluations (individual and organizational)? If so, do you advocate a specific format? If not, what do you suggest?

Please provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and Include references in APA format.

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1. Accounting has had some major shifts over the past few years. Accounting has expanded from bean counting with limited purpose, to having a much greater use and bigger role in business decisions. Accounting today consists of analyzing the numbers and the business environment and then telling management a more accurate assessment of how the company is performing, has performed in the past and steps that could be taken to improve for the ...

Solution Summary

This solution of 279 words discusses three main ways in which the accounting function has changed in performance evaluations. Reference used is included.

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Question about Functions of Managerial accounting

Operations deals with how the company is performing. Operations may be refined into different manufacturing processes such as design, materials procurement, assembly, testing and so on.

A VP of operations has asked you to make a presentation at the weekly status meeting on how to improve the efficiency and effectiveness of each manufacturing sub processes individually and as a whole.

She states that to drive performance, you will need to examine accounting-based data on material, labor, and overhead costs. These types of information are not disclosed in financial reports for lenders and owners. Rather cost information relates to how to operate now and moving forward. External reports are more backward-looking about how an entity DID operate. While there will be a strong relation between operation profits and profit per the external financial statements, the way that profitability is measured can vary greatly especially since profits on an external financial report are defined according to strict definitions. Nevertheless, the VP of operations finds the relation between operation profits and profit per the external financial statements most useful. You are to present your findings and recommendation at this meeting.

Describe the functions of managerial accounting and the external uses of accounting.

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