Accounting essay

timer Asked: Nov 30th, 2015

Question description

“The traditional budget is a rigid tool and should therefore be discarded in practice”. Should the traditional budgetary model be abandoned as suggested above?

 Critically evaluate this claim in the light of recent external pressures from the capital market for timely and accurate information. 

Please support your answer with theoretical arguments and practical examples from lectures and academic journal articles highlighting the extensive use of budgetary system more recently.

Keep to a maximum of 2500 words in total. Please ensure that references are used correctly and in accordance with Royal Holloway School of Management guidelines. Some suggested readings for this question are shown below:

1. Otley, David (2001) Extending the boundaries of management accounting research, British Accounting Review, 33, (2001), pp. 243-261.

2. Van der Stede, Wim (2000) The relationship between two consequences of budgetary control, Accounting, Organizations and Society, 25, (2000), pp. 609-622.

3. Ryan, Bill (2007) Budgeting, the individual and the capital market: a case of fiscal stress. Accounting Forum, 31, (2007), pp. 384-397.


The following are some of the key reminders and things to go over to do well.

1. The assignment is research based debate: answer not found in one source or textbook.

2. Avoid straightforward advantages and disadvantages: that will be deemed too 'descriptive'.

3. Be analytical and critical.

4. Think about what is 'traditional budgeting': not clearly defined but may include incremental budgeting, static budget comparisons with actual results: wrong?

5. Introduce the role of  flexible budgeting and other more progressive budgeting like ABB. ZBB and Kaizen budget but be critical as you make the propositions.

6. The can be various things you may add in between- no fixed answer but a clear structure is very important as it will tell a paint picture.

7. Evaluate the reasons leading to the extended use of the budget through quarterly reporting etc.

8. Any more sustainable basis for budgeting and evaluate whether the budget should be discarded or not.

9. This is ONLY a GUIDE and by no means exhaustive or an answer to the essay.

10. You need at least 15-20 good journal articles which means a good student will probably research about 25-30 articles before narrowing down to the most important.

11. Don't cheat or pad your references. We shall find you out.

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