AN EVALUATION OF BUDGETS AND BUDGETARY CONTROL SYSTEMS IN MEDIUM SCALE INDUSTRIES
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AN EVALUATION OF BUDGETS AND BUDGETARY CONTROL SYSTEMS IN MEDIUM SCALE INDUSTRIES
ABSTRACT
During the research, the researcher discovered the cause of some of the problems faced by some medium-sized industries, and it was discovered that the English adage “If you fail to plan, you plan to fail” is having an effect on many of these industries.
As a result, the research was able to produce something useful not only to the medium-sized industries, but also to any organisation, profit or non-profit.
Secondary data is used to acquire information in order to achieve this goal. This includes the utilisation of journals, magazines, textbooks, and a variety of other resources.
It was also discovered that management has a significant role to play, and their actions have an impact on budgeting and control measures.
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Any organisation, public or private, that fails to plan is planning for failure; thus, planning may be defined as the act of creating and clarifying objectives and goals, as well as determining the policies, policies, and processes required to meet these aims and goals.
This research will shed light on several budgetary systems used in medium-sized enterprises. Budgeting consists of both budgetary planning and budgetary control.
Accountants and business managers must keep an emphasis on plan control, comparing actual operations to planned operations to find variances from which corrective action can be taken, especially in present economic climate.
Nigeria has been facing economic volatility in recent years, which has resulted in illegal economic activity. As a result, the budgeting approach used in numerous medium-sized sectors has been rendered ineffective,
having a significant influence on budgetary management due to the disparity in variances that has resulted. In fact, this has a significant impact on the profitability of medium-sized industries.
Budgetary control, as defined by the chartered institute of management accountants (CIMA), is “the establishment of budgets relating the responsibilities of executives to the requirement of a policy, and the continuous comparison of actual performance with budgeted result either to secure by individual actions, the objectives of such policies on to provide a basis for its” revision.
It is consequently the role of management to guarantee that all of the organization’s various operations are coordinated by developing action plans for the future time.
Budgets are the common name for these thorough plans.
Budgetary control and standard costing techniques are recognised as the two primary control approaches available to the management accountant when examining any organization’s budgetary system.
This is due to the fact that both techniques are involved.
a) Establishing a goal
a) Historical cost accumulation
d) Matching actual results to targets.
d) Taking corrective action in the identified variance.
Hopefully, this study would be of tremendous benefit to Nigerian medium-scale enterprises in broadening their knowledge of budgetary control and the adoption of an appropriate budgeting system in a certain economic scenario.
1.2 STATEMENT OF THE PROBLEM
The budgetary system is a difficulty for medium-sized enterprises all around the world. The issue is finding a suitable budgetary system for different sectors of operation that will not have an adverse effect on the budgeted income of a medium-sized manufacturing industry,
as well as taking necessary corrective measures on the variance highlighted as a result to reduce deviation from the standard set.
Whether a medium-sized industry uses a fixed, flexible, control, or rolling and programming budgeting method, the budget requires constant review and change to reflect changing conditions in the business environment.
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