Article Abstract:
A survey of 402 firms in nine industry categories indicates that successful firms: (1) encourage company-wide commitment to budgets, (2) identify connections between immediate, medium-term, and long-range budgetary objectives, (3) develop detailed procedures for budget preparation, and (4) analyze variances in the budget and correct them. The survey, sponsored by the National Association of Accountants, was conducted among firms categorized as successful according to price-to-earnings ratios, self-identified financial performance, self-identified budgetary effectiveness, and average returns on equity for the past five years. In addition to discussions of the four budget-related qualities the survey identified, ten steps to more effective budgeting are discussed: (1) commitment by senior management to the budgeting process, (2) establishment of realistic budgetary goals, (3) assignment of budgetary objectives within managers' responsibility ranges, (4) assessment of senior management's goals prior to preparing departmental budgets, (5) identification of how short-term objectives help to achieve long-range goals, (6) treatment of the budgeting process as a major company project, (7) standardization of the routine aspects of the budgeting process, (8) regular reviews of actual operating results in comparison to budget, (9) discipline of mid-level managers who play "budget games," and (10) periodic auditing of the budgeting process.
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Article Abstract:
A survey was conducted to identify the similarities and differences among the accounting practices of Korean, Japanese, and US companies. Survey results reveal the similarities among management accountants in all three countries in many areas, including tendencies to be short-term oriented and to emphasize sales when determining objectives. US firms considered indirect labor costs to be variable, but Korean and Japanese firms considered these costs to be fixed. Some 43 percent of Korean firms used single plant-wide rates as their most widely used overhead application rate, while 68 percent of Japanese firms used work-center group rates, and 38 percent of US firms used individual work-center rates. Approximately 90 percent of all of the firms placed the most importance on sales in their income statements.
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Article Abstract:
A survey of the nation's 70 largest banks and savings and loan associations reveals that cost accounting remains an important management tool: 87 percent of respondents had cost accounting systems in place or were planning for them at the time of survey. Product development and pricing was the main perceived objective of cost accounting systems, receiving 219 or a possible 245 points as an identified goal in the survey. The next most popular goal was the achievement of cost reductions, with 186 points. A response rate of 69 percent was achieved for the survey, which is seen as an indication of the importance which managers attach to cost accounting practices and policies.
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