QUESTION a

Management at Seaforth Nursing Home is concerned about the provision of financial information for internal use, as there have been a number of unforeseen budget overspends recently and certain decisions have had a financial impact exactly opposite to that which was expected. The nursing home's accounting system provides only sufficient information to meet the requirements of external parties as required by statute and other regulations and no further analysis beyond this purpose.

REQUIRED:

Explain the possible actions to improve the situation to the management of Seaforth Nursing Home, in view of the weaknesses of their current approach to internal provision of financial information.