Accounting performance measurement: a review of its purposes and practices

Despite recent developments in reporting non-financial measures of performance such as the Balanced Scorecard, the mainstay of management control systems remains the reporting of accounting numbers. This paper reviews the different roles that accounting performance measures fulfil and points out the dangers in using measures designed for one role for another purpose. The three roles discussed are accounting numbers as a tool of financial management, as an overarching business objective and as a mechanism for motivation and control. It concludes by recognising the important but not exclusive role occupied by such measures and placing their use in a wider context.