Summary : Accounting, Budgeting and Control Systems

286 Words2 Pages
Accounting, Budgeting and Control Systems in their Organizational Context: Theoretical and Empirical Perspectives by : Eric G. FlamHoltz The process of exercising control in an organization is significantly more complex than conventional managerial accounting theory suggests. Budgeting and even an accounting system cannot be viewed as a control system per se; rather, they must be seen as a part of a carefully designed total system of organizational control. If the linkages between budgeting and an accounting measurement system and the other prerequisites of a control system are not adequate, then the system may not fulfil its intended functions. In addition if a firm culter and its core control system are note synchronized it is not likely that even a well integrated core system will actualy influence behavior in its intended ways. Case studies: 1. Medium sized residential real estate company : Conentional budgeting and control system This study aimed to test whether a budget is a control system or a component of the overall control system in a company. 2. Small distributor of industrial abrasives : accounting system and organizational. This study aimed to see whether the accounting system can function as part of the control system in a company. 3. Very large US financial institution: Organiztional culture and zero based budgeting as control mechanism. This study aimed to test whether a budget is a control system or a component of the overall control system in a company. Conclusion The need for a different orientation of the role that accounting and budgeting play in the control process as well as a broader concept of control it self. Organization Control system : Organizational environtment consist of : 1. Organizational Culture 2. Organizational Structure 3. Core system (planning, operations, measurement and

More about Summary : Accounting, Budgeting and Control Systems

Open Document