Revision question on budgeting (Adopted from ACCA & NBAA NOV. 2009 &2012)



Budgeting may be viewed as a relevant technique in facilitating the assessment of business performance from initial planning to actual results. It will be necessary, however, to consider how to overcome factors that may limit its effectiveness.
REQUIRED:

    1. Critically discuss the arguments for the use of budgeting in the implementation of FOUR aspects of the performance cycle.
    1. Briefly explain THREE advantages that may be claimed in the use of activity based budgeting rather than traditional incremental budgeting system.
  1. Suggest FOUR reasons why advocates of a “Beyond Budgeting” philosophy may not regard a major annual budget preparation exercise as effective use of resources.

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