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Q.1) Explain briefly features of an IDEAL management control system?

Management control is a process of assuming that resources are obtained and used effectively and efficiently in the
accomplishment of the organizations objectives. It is a fundamental necessity for the success of a business and hence
from time to time the current performance of the various operations is compared to a predetermined standard or ideal
performance and in case of variance remedial measures are adopted to confirm operations to set plan or policy.
Some of the features of A!A"EE!# $%!#&%L S'S#E are as follo(s)
#otal System) MANAGEMEN !"N#"$ %&%EM is an overall process of the enterprise 'hich aims to fit
together the separate plans for various segments as to assure that each harmonizes 'ith the others and that the
aggregate effect of all of them on the 'hole enterprise is satisfactory.
onetary Stan*ar*) MANAGEMEN !"N#"$ %&%EM is built around a financial structure and all the
resources and outputs are e(pressed in terms of money. he results of each responsibility centre in respect to
production and resources are e(pressed in terms of a common denominator of money.
Definite pattern) It follo's a definite pattern and time table. he 'hole operational activity is regular and
rhythmic. It is a continuous process even if the plans are changed in the light of e(perience or technology.
$oor*inate* System) It is a fully coordinated and integrated system.
Emphasis) Management control re)uires emphasis both on the search for planning as 'ell as control. *oth
should go hand in hand to achieve the best results.
+unction of e,ery manager) Manager at every level as to focus to'ards future operational and accounting data+
ta,ing into consideration past performance+ present trends and anticipated economic and technological changes.
he nature+ scope and level of control 'ill be governed by the level of manager e(ercising it.
Existence of goals an* plans) MANAGEMEN !"N#"$ %&%EM is not possible 'ithout predetermined
goals and plans. hese t'o provide a lin, bet'een such future anticipations and actual performance.
+or(ar* loo-ing) MANAGEMEN !"N#"$ %&%EM is on the basis of evaluation of past performance
that the future plans or guidelines can be laid do'n. Management !ontrol involves managing the overall activity
of the enterprise for the future. It prevents deviations in operational goals.
$ontinuous process) It is a continuous process over the human and material resources. It demands vigilance at
every step. -eciding+ planning and regulating the activities of people associated in the common tas, of attaining
the objectives of the organization is a the primary aim of MANAGEMEN !"N#"$ %&%EM.
.eople oriente*) It is the managers+ engineers and operators 'hich implement the ideas and objectives of the
management. he coordination of the main division of an organization helps in smoother operations and less
friction 'hich results in the achievement of the predetermined objectives.
Scope of control
MANAGEMEN !"N#"$ %&%EM is an important process in 'hich accounting information is used to
accomplish the organizations objectives. herefore the scope of control is very 'ide 'hich covers a very 'ide range
of management activities.
.olicies control) %uccess if a business depends on formulation of sound policies and their proper
$ontrol o,er organi/ation) It involves designing and organizing the various departments for the smooth
running of the business. It attempts to remove the causes of such friction and rationalizes the organizational
structure as and 'hen the need arises.
$ontrol o,er personnel) Anything that the business accomplishes is the result of the action of those people 'ho
'or, in the organization. It is the people+ and not the figures+ that get things done.
$ontrol o,er costs) he cost accountant is responsible to control cost sets+ cost standards+ labour material and
over heads. .e ma,es comparisons of actual cost data 'ith standard cost. !ost control is a delicate tas, and is
supplemented by budgetary control systems.
$ontrol o,er techni0ues) It involves the use of best methods and techni)ues so as to eliminate all 'astages in
time+ energy and material. he tas, is accomplished by periodic analysis and chec,ing of activities of each
department 'ith a vie' to avoid an eliminate all non/essential motions+ functions and methods.
$ontrol o,er capital Expen*iture) !apital budget is prepared for the 'hole concern. Every project is evaluated
in terms if the advantage it accrues to the firm. 0or this purpose capital budgeting+ project analysis+ study of cost
of capital etc are carried out.
%,erall control) A master plan is prepared for overall control and all the departments of the concern are
involved in this procedure.