ABSTRACT
A budget acts as a standard of measure against which actual performance may be compared. The Institute of Cost and Management Accountants defines budgetary control as ‘the establishment of budgets, relating the responsibility of executives to the requirements of a policy and the continuous comparison of actual with budgeted results, either to secure by individual action the objective of that policy, or to provide a basis for its revision’. Budgetary control therefore involves:
• setting targets; • monitoring progress; • taking corrective action when necessary.
