ACCA FR · Chapter 14 · Question 14 of 15
Performance in a not-for-profit entity such as a charity is often assessed using 'value for money'. What are the three Es that make up value for money?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Economy, efficiency and effectiveness
Explanation
Value for money is assessed through economy (obtaining resources at the lowest cost for the right quality), efficiency (the relationship between inputs and outputs) and effectiveness (how well objectives are achieved). Profit-based ratios are less relevant because the primary objective of a not-for-profit entity is not profit.
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