Advanced (a) The investigation of a variance is a funda- ' mental element in the effective exercise
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Advanced
(a) The investigation of a variance is a funda- ' mental element in the effective exercise of control through budgetary control and stan¬ dard costing systems. The systems for identi¬ fying the variances may be well defined and detailed yet the procedures adopted to deter¬ mine whether to pursue the investigation of variances may well not be formalized.
Critically examine this situation, discuss¬ ing possible effective approaches to the inves¬ tigation of variances. (15 marks)
(b) Explain the major motivational factors which influence managers in their actions to elim¬ inate variances from budget. (10 marks)
(Total 25 marks) CIMA Stage 4 Management Accounting Control and Audit
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