Principles of Accounting II
Manager’s Performance Evaluation
Please respond to BOTH of the following questions:
- Should we evaluate a manager’s performance on the basis of controllable or non-controllable costs? Why?
- Is it ethical for a manager that is responsible for overseeing a sales department whose compensation is based on the level of sales to be involved in the preparation of the sales reports? Why or why not? What internal controls should be in place in this situation to avoid fraud from occurring?