Performance Indicators Are Important for Assessing Whether Any Identified Process

question 14

Essay

Performance indicators are important for assessing whether any identified process risks are currently a significant problem. Problems may arise because risks are not effectively controlled or controls are not operating effectively. For each of the following process risks associated with an automotive manufacturer, like DaimlerChrysler, provide examples of measures that can be used as performance indicators.

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Definitions:

Consolidated Balance Sheet

A balance sheet that aggregates the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries, presenting the financial position of the entire group.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, essentially representing the owners' claim on the company.

Book Value

The net value of a company's assets found on its balance sheet, calculated as total assets minus intangible assets and liabilities.

Fair Market Value

The price at which an asset would change hands in a transaction between a willing buyer and seller, both having reasonable knowledge of all relevant facts.