Response to the following problem:
Exercising control What Next?
According to its annual report, Next has the following arrangements:
The Board is responsible for approving semi-annual Group budgets. Performance against budget is reported to the Board monthly and any substantial variances are explained. BA at the controls BA makes it clear that it too uses budgets and variance analysis to help keep control over its activities. The annual report says:
A comprehensive management accounting system is in place providing financial and operational performance measurement indicators to management. Detailed management accounts are prepared monthly to cover each major area of the business. Variances from plan are analysed, explained and acted on in a timely manner. The board of directors of these businesses will not seek explanations of variances arising at each branch/flight/department, but they will be looking at figures for the businesses as a whole or the results for major divisions of them. Equally certainly, branch/department manager will receive a monthly (or perhaps more frequent) report of variances arising within their area of responsibility alone.