Skip to main content

Budgetary planning and control

  • Chapter
Accounting for Management Control

Summary

Budgetary planning and control is the most visible use of accounting information in the management control process. By setting standards of performance and providing feedback by means of variance reports, the accountant supplies much of the fundamental information required for overall planning and control.

However, budgetary information serves a variety of potentially conflicting purposes within an organization. Budget standards may be set as motivational targets or as best estimates of expected outcomes. Reported actual results compared with those budget standards may be used as a means of evaluating the performance of managers or the units for which they are responsible. Thus budgetary figures are subject to a variety of pressures for bias and manipulation.

These problems become most severe in conditions of high uncertainty and when there is a great deal of inter-dependence between organizational sub-units; yet these are the circumstances in which the budgetary system is most needed. The way in which managers use the admittedly imperfect accounting information with which they are provided is crucial to effective control. Thus, although accounting information has a vital role to play, it has to be used in a manner that takes account of its imperfections and limitations.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

eBook
USD 9.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

Copyright information

© 1990 Clive Emmanuel, David Otley and Kenneth Merchant

About this chapter

Cite this chapter

Emmanuel, C., Otley, D., Merchant, K. (1990). Budgetary planning and control. In: Accounting for Management Control. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-6952-1_7

Download citation

  • DOI: https://doi.org/10.1007/978-1-4899-6952-1_7

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-412-37480-7

  • Online ISBN: 978-1-4899-6952-1

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics