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Basic Question 8 of 16
Which of the following statements represent shortcomings of the post-audit process?
II. Forecasts may be "wrong" due to unanticipated circumstances.
III. Forecasts are "wrong" due to the decisions of managers no longer employed by the company.
I. Forecasts are always "wrong" to some extent.
II. Forecasts may be "wrong" due to unanticipated circumstances.
III. Forecasts are "wrong" due to the decisions of managers no longer employed by the company.
User Contributed Comments 7
| User | Comment |
|---|---|
| amamed213 | Can someone explain why III is correct ? |
| Oarona | It is correct because when people who control the process leave unexpectedly, it is hard to compare the forecast with the actual results |
| peteypete | It is also hard to match the previous manager's skills and knowledge of similar proejcts with a new manager. |
| johntan1979 | III is open to a lot of interpretations. For instance, the reason they are no longer employed by the company could be that they were fired because of poor judgment or decision. |
| Bududeen | The reason being that forecasts are based on judgements; as such different managers have different approach to forecast and implementation. |
| assiduous | Not sure if anyone else read the question differently but I think the word "limitations" should have been used in lieu of "shortcomings." Reading the question as written, leads me to think I am being asked how to assess whether or not my own post-audit process needs improvement. |
| Shaig | Agree |
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Learning Outcome Statements
describe principles of capital allocation and common capital allocation pitfalls
CFA® 2024 Level I Curriculum, Volume 2, Module 5.