Oswald & Rutabaga,CPAs,brought in an HR Consulting Firm to Evaluate

question 38

Multiple Choice

Oswald & Rutabaga,CPAs,brought in an HR consulting firm to evaluate the firm's performance management system.The firm has offices in six locations,and the manager of each location rates the office's staff members using a 5-point rating scale.After studying the appraisal results from the past three years,the consultants reported that they cannot make comparisons among the offices.Which of the following is the most likely problem?

• A) The consultants aren't qualified to analyze this type of rating system.
• B) One office has exceptional people,so contrast errors are occurring.
• C) The managers let their opinion of one quality color their opinion of others.
• D) The managers are making distributional errors,each using only part of the rating scale.
• E) The managers tend to give higher ratings to people they consider similar to themselves.

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Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, representing profitability.

Stockholders' Equity

This represents the ownership interest of shareholders in a corporation, calculated as total assets minus total liabilities.

Decrease Total Assets

A reduction in the overall value of a company's assets, which may result from expenses, losses, or distributions to owners.