Advanced

(a) Budgetary controls have been likened to a system of thermostatic control.

(i) In what respects is the analogy inappro¬ priate? (10 marks)

(ii) What are the matters raised in

(a) (i) above that need to be considered when setting a structure for an effective budgetary control system? (8 marks)

(b) Describe the pre-conditions which should exist if budget variance analysis is to be of value to an organization. (7 marks)

(Total 25 marks) CIMA Stage 4 - Control and Audit