Management accounting and control (s-12 -1-4)) Coursework

Management accounting and control (s-12 -1-4)) - Coursework ExampleIn 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 governings 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 conditionive action throughout the budgetary process. Existence of clear organisations objectives Management of public and large mystical 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 do at specific finish of time. An organisation has objectives and subsidiary objectives that influ ence 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 organisations effectiveness and efficiency, which means have direct effect on organisations budget (Bunce et al., 1995). The extent to which clear objectives apply in the background 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 have to the utilization of the existing resources as reflect ed 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 blameless 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 parceling 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