CONTROL

Control : Budgetary control, non-financial control, human aspects of

control.
 CONTROLLING
• Process of evaluating actual performance & if necessary, taking corrective actions so that the performance
is in accordance with planned performance.
Nature:
• A Managerial function
• Dynamic process: it sets & changes standard as per situational requirements
• Continuous process : not one time action
• Action oriented : as it indicates the areas of performance in which control actions can be taken
• Control as Forward looking : as one can control future happenings not the past. In light of past
performance mangers suggest corrective actions for future period.
• Control as Backward looking : as control action is based on past performance.
 CONTROLLING PROCESS
Step 1 — Establish objectives and standards.
Step 2 — Measure actual performance.
Step 3 — Compare results with objectives and standards.
Step 4 — Take corrective action as needed
 Budgetary control
• Budgetary control is a process of comparing the actual results with the
corresponding budget data in order to identify whether both match or
differ and rectify factors causing mismatch.
• Types of Budgets
1. Based on coverage of functions –
Functional Budgets :
Master Budget:
• Based on Nature of activities covered – Capital & Revenue
Budget.
• Based on Time period - Short Term, & Long Term.
• Based on flexibility adopted- Fixed Budget &Flexible Budgets.
 Other techniques of control
• Break even analysis
• ABC Analysis
• EOQ
• PERT & CPM
• FINANCIAL RATIO ANALYSIS
QUALITY CONTROL THROUGH QUALITY
CIRCLES
 Human Resource Accounting
• human resource is most precious resource . Organization has taken
measures to not only develop but measure the value of this resource.
• American Accounting Association has defined Human Resource
Accounting as : it is a process of identifying & measuring data about
human resources & communicating this information to interested parties.
• Thus, HR accounting is primary involved in measuring the various
aspects related to human assets.
Objectives
 Methods of valuation of human assets
• historical cost
• Replacement cost
• Standard cost
• Present value of future earnings
• Expected realizable value
Problems in HR Accounting