Explain a flexible budget. How is a flexible budget related
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Explain a flexible budget. How is a flexible budget related to a static budget?
What is responsibility accounting? Explain the purpose of responsibility accounting.
What do you believe the future holds for the Sarbanes-Oxley Act? Explain
What is the objective of internal auditing? Is the scope of internal auditing limited to financial statement audits? Explain.
Do you believe the Securities Acts of 1933 and 1934 were necessary? Explain.
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Solution Summary
Explain a flexible budget. How is a flexible budget related to a static budget?
What is responsibility accounting? Explain the purpose of responsibility accounting.
What do you believe the future holds for the Sarbanes-Oxley Act? Explain
What is the objective of internal auditing? Is the scope of internal auditing limited to financial statement audits? Explain.
Do you believe the Securities Acts of 1933 and 1934 were necessary? Explain.
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Explain a flexible budget. How is a flexible budget related to a static budget?
A flexible budget is a budget that basically remains flexible and is able to be adjusted as necessary due to changes in volume. The flexible budget can be reconstructed under different scenarios to allow management to determine the optimal quantities (volume) that can be used in production. The flexible budget can be revised with little inconvenience. A static budget does not change - it stays static and is inflexible to changes in volume. Many companies don't use static budgeting any longer because it is not as effective as a flexible budget. In today's times when demand and economic factors can change in a short amount of time, the static budget proves to be less useful than the flexible budget. The static budget cannot change, even as volume and other internal and/or external conditions change.
What is responsibility accounting? Explain the purpose of responsibility accounting.
Responsibility accounting is a relatively new term in the accounting and finance industries. Responsibility accounting is the practice where managers are held responsible for revenue and expenses. These two areas are the areas that management directly controls. Because there is direct control from management, management is held accountable in these areas. This is particularly important in terms of costs, because a variety of costs can be controlled through various ...
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