Building quality Activity 6

Feedback for Activity 6

The key problems with measures are:

It is often difficult to establish the right measures, as a result of which the internal audit function may prioritise items that are easy to measure.
Measures should focus on outcomes (such as improvements to business processes) rather than outputs (such as number of internal audit recommendations implemented). But outcomes are difficult to measure. So, there is a tendency to rely on ‘proxy’ output measurements.
The measurement itself may have a negative affect on performance – unrealistically high measures will be ignored as unattainable, whilst low measures may lead to complacency.
Performance measures are often expressed in quantifiable terms. The advantage of quantitative measures is that they provide diagnostic feedback that can be easily collated and communicated. However, there are drawbacks to relying on quantitative measurements, most obviously, important aspects of performance, such as interpersonal and communication skills, which are difficult to quantify, become undervalued.
It is possible to game measures – to change behaviour in order to achieve a good score on the measure.