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Management accounting and control (s-12 -1-4))
Finance & Accounting
Pages 15 (3765 words)
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.
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. ...
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