Budgeting as an Accounting Method in Managerial Accounting

MANAGERIAL ACCOUNTING: 1
Executive summary
This report discusses about a concept of a budgeting as an accounting method. It has a
literature review of the topic with the relevant analysis of the topic through journals. These
two articles, which are chosen for the analysis focuses on the concept of traditional budgeting
and new approaches of budgeting.

MANAGERIAL ACCOUNTING: 2
Contents
Introduction...........................................................................................................................................2
Explanation of Budgeting......................................................................................................................2
Explanation of purpose of two studies undertaken to understand budgeting.........................................7
Similarities and differences in two studies............................................................................................8
Four specific outcomes or lessons learned from the two studies’ research findings that will be useful
for management accountants in Australian companies........................................................................10
Conclusion...........................................................................................................................................11
References...........................................................................................................................................13

MANAGERIAL ACCOUNTING: 3
Introduction
This report brings out the discussion on budgeting based on managerial accounting. A budget
is a pre-determined statement of cost of project. To control the cost of a project, a budget plan
estimates the cash flow associated with the control. A final cost provides a baseline to assess
the financial performance of the project. The extent to which cost is within the detailed cost
estimation, the project is still under the financial control. As soon as the cost overruns, the
possibility of occurring problems become severe. Preparation of budget follows an
organisational pattern of responsibility and authority. Budget provides a control system
through which both feed forward and feedback are connected.
The purpose of using feedback can enable organisation to find out the variation between
executed budget and the actual performance. This report bring out the discussion on two
reviewed articles of renowned journals named Auditing & Accountability Journal. Both
articles have discussed two different viewpoints. First has discussed the case study of Main
freight that layouts and follows non-budgeting method in its management control system. The
another article highlights the public budgeting that determines how public administration
operates with the modern and new approaches of budgeting.
Explanation of Budgeting
According to Leoissac, (2018), Budgeting is a procedure of making a strategic plan that
elaborates how to spend the money. A systematic expenditure plan of money that determine
in advance that how the assigned money to an task will be spent or how the business plan do
the things to use the particular sum of money for a particular task to attain maximum
satisfaction. Budgeting is an inseparable of business operations because it is an economic
concept that resources are always scare. Experts plays an important role in accomplishing
their goals or set objectives through proper planning by applying their knowledge and
experiences to make a plan. Once experts prepare the budget and starts using the scare