ABSTRACT
A second technique introduced in this chapter is variance analysis. ‘Variance’ is the accounting term for any difference between an actual and budgeted amount. Variance analysis relates to the responsibility accounting issues introduced in the previous chapter as it involves the isolation of factors contributing to variances. Greater appreciation of what factors lie behind a particular variance supports responsibility accounting through enhanced accountability. The chapter concludes with a description of benchmarking, a technique that has commanded increasing attention as a financial management tool in the last few years.
