Answer to Question #69908 in Accounting for Amber

Question

Describe the role that performance indicators could have achieving organisational success and compliance with organisational internal controls

Answer 1

Performance indicators plays a great role in internal control. They helps to measure the results of internal control and achieving some goals of businesses.
KPIs (key performance indicators) are metrics of efficiency of doing business. Companies are checking internal control with using of KPIs. They are created
with the help of operations and key support functions, like finance, HR and accounting. Every company will have its own KPIs according to its specialisation.
Performance indicators will help organization save time and get organized.
KPIs should follow the SMART criteria.
Specific
Measurable
Achievable,
Relevant
Time phased.
KPIs are using special metrics (financial, customers, employees metrics)
Determining the most important indicators help to build effective bussines strategy and achieve goals of organization.
For example, using metrics of percentage of product defects, manager can make conclusions about the need to increase the quality of production in different ways.