Accounting in Context and Budgetary Control

Unit 5: Accounting Principles
Accounting in Context and Budgetary Control
Part-1 (LO1&4)

Table of Contents
Introduction......................................................................................................................................3
The purpose of the accounting function within an organisation......................................................3
The accounting function within the organisation in the context of regulatory and ethical
constraints........................................................................................................................................4
The accounting function meets organizational, stakeholder, and societal needs.............................5
The role of accounting in informing decision making to meet organisational, stakeholder and
societal needs within complex operating environments..................................................................5
Preparing a cash budget from given data for an organization using a spreadsheet.........................6
The benefits and limitations of budgets and budgetary planning, and control for an organization.7
The corrective actions to problems revealed by budgetary planning and control for effective
organisational decision making.......................................................................................................7
The budgetary control solutions and their impact on organisational decision making to ensure
efficient and effective deployment of resources..............................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
Because the future is fluid and hard to anticipate, it is essential to plan ahead and to do it in a
manner that will have a significant and long-lasting impact on the value of the business in the
long run. The planning aspect of accounting comes into play at this point. An exhaustive study
was conducted on ARAMCO, which is really the current topic of an analysis that encompasses a
variety of topics including accounting tasks, ethical constraints, and cash budgeting. This study
was conducted because ARAMCO continues to operate on a massive scale and has thus gained a
significant market share.
The purpose of the accounting function within an organisation.
In a nutshell, the practice of accounting involves gathering, analyzing, and disclosing data on the
flow of financial resources. A business manager has a variety of purposes for running his or her
company, all of which contribute to the accounting process. The accounting function serves a
variety of purposes within an organization, some of which are listed below:
 When a transaction (cost) is registered, it is essential that all monetary inputs and outputs
be tracked. There is a risk that important information may be overlooked if these items
are left off the list. Financial reporting and tax payments are likely to become
problematic, which might lead to legal issues for the company.
 On a routine basis, monitor the news to ensure that your financial reports are updated.
The proprietors and managers of the organization were able to keep track of everyone and
everything that entered and exited the premises by using this technology. In addition to
that, the graph illustrates whether or not the activity level is growing or decreasing. If you
want to ensure that all of your payments are paid in full and on time, you should check
the balances of your accounts every day.
 An organization's managers are responsible for ensuring that the company's resources are
properly allocated and managed in order to function smoothly. A manager's
responsibilities include the effective administration of a company's finances, participation
in decision making, and the resolution of operational issues.
 It's all going to work out perfectly as long as the transactions are recorded and kept track
of. It is possible to exercise more command over the company's current financial