In this control model, there are several actions that ought to be subjected to control as argued by Otley and Berry (1980). In their argument, the authors point out four conditions of control. i. Existence of clear organisation’s objectives ii. The outputs of the budgetary process should be measurable iii. The effect of the control actions must be predictable iv. The organisation should be able to implement a corrective action throughout the budgetary process. Existence of clear organisation’s objectives Management of public and large private organisations is sometime hard to attain the desired ends. Activities and various operations should be monitored closely and action should be taken in order to achieve the intended objectives. Objectives drive an organisation in pursuing any activity. It dictates what ought to be done at specific period of time. An organisation has objectives and subsidiary objectives that influence its course of actions. Setting clear objectives is one of the functions of modern management both in private and public sector. Measurement of goal attainment both financially and in terms of meeting demands of stakeholders is paramount. The issue of goal attainment cannot be achieved without confronting the issue of organisation’s effectiveness and efficiency, which means have direct effect on organisation’s budget (Bunce et al., 1995). The extent to which clear objectives apply in the context of budgeting As suggested by Otley and Berry (1980), objectives for budgetary process under control must exist; otherwise without them the control process is meaningless to the organisation. Well defined objectives compel an organisation to work without certain resource and time constraints. Most organisations around the world defined their objectives which ought to be achieved within budgeted resources. The objectives act a guide to the utilization of the existing resources as reflected in the budget. The authors further suggest that the budgeting control process is influenced directly by the objectives to be attained during a specified period of time. It is demeaning for organisation to spend its resources on unbudgeted things since it will undermine the attainment of well defined objectives. Without objectives, the budgeting process will be aimless hence the entire concept of budgetary control becomes inappropriate. As the business operations progresses, an organisation continually monitors the world around and compares its current state with its objectives. Is the organisation in the correct route in respect to its budgeting process? Is its spending within the appropriate budget limit? Is the organisation avoiding resource strain? The objectives helps an organisation makes a budgetary observations by the use of measurable aspects of budget. The outputs of the budgetary process should be measurable Most literature advocate for adoption of performance based budgeting (PBP) as a primary way of attaining efficiency in the management of public resources. The sole aim of this concept is to link performance information with effective management and allocation of public or organisational resources. It emphasizes the significance of singling out measurable outcomes and effectively allocating resources to facilitate the realization of these outcomes. According to Otley
Management Accounting and Control Name: Course Name: Instructor: Date: Question One From an accounting and financial perspective, a budgetary process is no more than a mere plan for income and spending, usually for a specific period of time. However, this might not be the case since actual spending and revenues of entities tend to deviate from the budget…
These changes are in the form of corporate strategy, business strategy and even in day to day operations. Before introducing the change, companies conduct in-depth analysis of its strengths as well as weaknesses. They also evaluate the external environment (political, economic, social, technical, legal and environmental) to identify external threats as well as opportunities.
It states the best in management accounting advise such as how to apply the budgeting process, the impacts of a budget and how to incorporate a budget in an organization. I can use this to illustrate the role played by a budget in management accounting. This book concludes that budgeting is important in managing a business and this is true since it forecasts profitability, costs and thus used for decision making.
According to Henry Fayol, To manage is to forecast and to plan, to organize, to command, to co-ordinate, to control, to foresee and provide means to examine the future and drawing up the plan of action. (Bagad 2009). The primary role of any management is to motivate the individuals or employees of the organization through coordination and cooperation, so the allocated work is done.
This has prompted the use of the balance scorecards approach which enables the organizations to balance the internal and process measures with results and the financial measures which gives the managers a complete picture of the organization as well as the areas where they should make improvements (Lipe and Salterio 2000).
As time passes on, the roles of the accountant keeps changing. In addition, they become more diversified enabling the roles of the accountant to be viewed in varied forms of activities. Management accountant hence applies several forms of concepts and practices in the process of budgeting.
Finance is all about managing and utilizing the funds of an entity from different angles and to assess them with different provisions organisations have to undertake different decisions in total (V.S.BAGAD, 2008, pp.52). Managing the funds and increasing the shareholder’s equity is not the only provision and lawsuit of an entity but it mainly depends on certain things.
The detailed charter for the project is as follows (Kendrick, 2012):
Reasons for undertaking the project: the company has, in the past few fiscal years, experienced financial loss and depression in the revenues of the company. This could
It provides a preliminary delineation of roles and responsibilities outlines the project objectives, identifies the reference of authority for the future of the project.
Project charter was discussed by (Tom
In addition, hundreds of employees had to be laid off and many of its stores located across the US had to be closed. Although Tesco seemingly performed well in other parts of the world, it failed badly in the
The case presents an alternative choice in this regard and relevant cost that will be incurred. In the development stage, the feasibility of the new product in terms of production and profitability will be assessed and alongside pertinent budgets will be prepared. The
12 pages (3000 words)Coursework
Hire a pro to write a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Let us find you an essay for FREE
Contact us via Live Chat, call us at +16312120006or send an email to firstname.lastname@example.org