Topic: BUDGETARY CONTROL A PANACEA FOR EFFECTIVE MANAGEMENT DECISION MAKING (A CASE STUDY OF ETERNITY LTD SAPELE)

Chapter One

INTRODUCTION

1.1 Background of the Study

Monetary and other financial sector policies is a fiscal programmed which perform specific role including, helping to stabilize the economy, aiding management in decision making, regulation of the supply to money through credit control measured and the rate of interest enhancing the efficiency of resources used in this role should however, be seen in varying dimension and prospective of the domestic economy management. A budget is an annual plan of financial statement made by the government, which spelt out estimated government revenue and proposed expenditure for the coming financial year. Accordingly, budgeting can be deemed as a process of taking deliberate measures as moving the relevant economy system from its current state towards a specific desired state. INSE quell to that, the revenue and expenditure programme as well as the fiscal monetary, trade and other development policies enunciated to move the socio – economic system from the present, state to the desired state. The success or otherwise of budgeting process obtaining in the security at any point in time. The efficiency of budgetary is control as aids to management in decision making is the kernel of this research. According to chartered institute of management accounting (CIMA), London has defined the budget as a financial aid for quantities statement prepaid and approved prior to a defined period of time, of the policy to be pursed during that period for the purpose of attaining a given objectives. It may increase income, expenditure and the employment of capital. Horngren (2000) in his view said budgets are formal qualification of management plans. A plan of action expressed in figures. Thus budget express future plan in a formal and precise manner, budget makes possible a comparison of actual results with plans it makes uses of preformed financial statements. Many people leads to relate the term budget with only expenditure that is the sum of money they intent to spend or are allowed to spend on a particular activity. To this group, budget could be constructed to mean that I have got to budget my salary for the month with a motive of spending only #40,000 for sanitary items and entertainments. However, the term has a more positive meaning to it in the business world. Budget is an important tool for financial planning and control.

1.2 Statement of Problem

The major problem with implementation of budget is the time it takes to compute the process as a result of policies in budgeting. The main objectives of budget implementation with its control and monitoring function is to ensure that the policies and programmed are dutifully implemented in other to ensure the achievement of the desired result and raising revenue. Thus, the question arises. Why do management carryout the budgeting? What are their needs, does it really play significant roles in decision making? All these problems are intended to be provided with solution at the end of this research

1.3 Aim and Objectives of the Study

The aims of the study is to definite the degree to which budget and budgetary control leads to the desired result of the organization. That is the study expects to ascertain whether budget control aids in decision making in the firm. The other objectives are as follows. 1. To determine to what extent budget control aid Eternit Ltd Sapele,DeltaStatein decision making. 2. To expand the existing revenue by exploring new sources. 3. To determine to what degree the budget control implementation can yield the desired result.

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