Financial Control Through Variance Analysis

Date of Submission

1987

Document Type

Thesis

Degree Name

Master of Science in Accounting

Department

Accounting

Advisor

Robert McDonald

LCSH

Cost accounting--Mathematical models, Managerial accounting--Mathematical models, Analysis of variance

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1987 no. 14

Abstract

A consideration of the premise that effective corporate financial control requires constant attention not only to results as achieved, but as compared to expectations. Methods are discussed to facilitate realistic financial planning, and to determine the significance of deviations from those plans.

A survey is made of the literature describing pertinent factors in the design of variance analysis systems, and in interpreting information derived from them. The investigation starts with emphasis on cost centers, and moves on to special problems arising in the control of divisional operations. Finally, variance analysis in the service and non-profit sectors is considered.

The conclusion reached is that there currently exist many variance analysis techniques which are not generally used which would have beneficial effects on financial control. The general concepts involved in providing continual feedback from the past to facilitate evaluation of the present and dynamic planning for the future will promote more effective financial control.

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