Audit of the budgeting system

Prof, what Advice would You offer:

 

• Audit the reliability of management reporting;
• Analysis of the budgeting system and management accounting to identify problem areas;
• Development of recommendations to implement the necessary changes;

 

Management accounting has become an integral element of the management system for the majority of Ukrainian companies, as well as budgeting.

 

Correctly put, the budgeting system and management reporting allows the owner and managers of the company:

 

• To set financial benchmarks for the activities and monitor their achievement;
• To analyze the deviation of actual indicators from planned to identify and resolve problems;
• To analyze the costs of the company and units, to identify the facts of inefficient use of resources;
• To analyze the revenues and costs for activities, products, services, to determine which products generate profits and which do not;
• To anticipate financial difficulties and to take measures proactively.

 

Management accounting and budgeting system is the financial, intellectual and labor costs, which is worth remembering. However, these costs do not always yield appropriate results. Is often effective element of the financial management system, the company gains the set of uninformative labels that have no real managerial value. But it's not so bad. It happens that in the result of an illiterate, the statement of management accounting of the company's management takes wrong decisions based on unreliable financial data. Such decisions can result in huge losses.