The auditor’s individual scorecard Auditors in a big-four auditing firm are evaluated on a set of balanced scorecard information.

The individual balanced scorecard (IBSC) is developed for senior auditors, who are responsible for generating sufficient profit for the firm, for managing an audit team, for training young professionals and for continuously improving the quality of their own work. The IBSC comprises information on six performance dimensions:

● Market visibility (how well-known is the auditor in the market for audit services?)

● Client orientation (what is the quality of the auditor-client relationship?)

● Team guidance (how well does the auditor coach assistant auditors?)

● Personal effectiveness (how well organised is the auditor?)
● Performance (what was the auditor’s contribution to firm performance?)
● Professionalism (to what extent is the auditor capable of improving the quality of their work?)
1. Try to relate the six performance dimensions to the different task areas of the senior auditor in this firm.

a. Are all responsibility areas sufficiently covered?

b. Which performance measurement dimensions would you remove?

c. What performance dimensions would you add?
2. Design two to three specific performance indicators for each of the six dimensions of the IBSC. Each indicator needs to be an objective measure of performance or conduct.
3. An audit firm generally has two main strategic priorities:

a. Make profit for its shareholders (or partners) to secure the economic future of the firm.

b. Exercise an independent audit of the client’s financial reporting quality.
Re-evaluate the IBSC developed under requirement 2 for each of the two different roles of the auditing firm.