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Management accounting and control (5-8)
Finance & Accounting
Pages 15 (3765 words)
Name Professor’s Name Course Date Answer 5 Within the accounting profession be it financial and management accounting, the accountants deal with several transactions on a day to day basis whether in a commercial or an industrial enterprise. Whether the business or organization is small or big, accounting is of great consequence with regards to effective and efficient management and administration.
In this context we can comfortably say that knowledge and insights from budgeting are helpful in designing budgetary systems and setting of budgets for organizations (Wildavsky & Swedlow 2001). The ability to effectively formulate budgetary systems and set budgets through insights from budgets is very important for any given form of organization. This is because such tools can be used in the setting of standards of performance, motivating the stakeholders of the organization and providing the tools used for the measurement of results which are direly needed in the fulfillment of the organizational goals. The process of budgeting normally begins from a zero based perspective (Wiseman 2010). The organization starts from zero and determines the need of each department and program. This approach tends to provide a more accurate budget as opposed to an allowed incremental increase each year. Budgets are meant to be conservative hence there needs to be an overestimation when it comes to the expenses while the revenues require to be underestimated. This is for the sake of flexibility required in the system hence assisting in the design of a budgetary system. ...
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