# Internal information quality and performance metric selection Why accurate metric selection is crucial for financial performance measurement - **Source:** [Journal of Accounting and Economics](https://www.sciencedirect.com/journal/journal-of-accounting-and-economics) - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/010ad1d8-ce59-46a0-8cf0-bfa7878294e3 ## Importance of performance measurement The performance metrics companies use in strategic decisions play a key role in accurately assessing financial health. Wrong metric selection can lead to serious resource allocation errors. ## Impact of information quality Research reveals a strong link between the accuracy of internal information flow and the effectiveness of performance measurements. Quality data enables managers to make more precise decisions. ## Metric selection criteria The study emphasizes that company size, industry dynamics and strategic goals must be considered when selecting financial metrics. One-dimensional approaches can be misleading. ## Data management practices Corporate data management systems need improvement for effective performance measurement. Automation and AI-powered analytics can increase metric accuracy. ## Industry differences Research results show that optimal performance metrics vary across industries. Measurement criteria differ significantly between service sector and manufacturing companies. ## Impact on strategic decisions Well-chosen performance indicators help companies gain competitive advantage in all processes from investment decisions to operational improvements. ## Sources covering this story - https://www.sciencedirect.com/science/article/pii/S0165410126000376?dgcid=rss_sd_all — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._