The best way to achieve more accurate and achievable budgets is to:
A) have the budget committee monitor actual results on a frequent basis so that quick punitive action can be taken when actual results do not comply with budgeted expectations.
B) have the budget prepared by top executives only.
C) have all employees participate in the preparation of the budget.
D) let it be known that budget variances will not be tolerated.

Question

Quizplus · Accepted Answer

Involving all employees in the preparation of the budget can lead to increased engagement and ownership, which can result in more accurate and achievable budgets. It also allows for input and perspectives from various departments and levels of the organization, which can lead to more realistic expectations and goals. Monitoring actual results and taking punitive action may create a negative and punitive culture, while having top executives only prepare the budget may result in a lack of diverse perspectives and input. Letting it be known that budget variances will not be tolerated may create fear and discourage employees from being proactive in identifying and addressing budget issues.

The Best Way to Achieve More Accurate and Achievable Budgets