I’m trying to study for my Accounting course and I need some help to understand this question.
Is it important for a company to follow a strict budget even though they may be experiencing phenomenal profits? Do you think that there will be a bias towards greed when creating the budget for this company? Explain.
How does management greed influence budget decisions?
Please consider each of the questions separately in this post. It is important for you to understand the value of the budget as a blueprint for the business – even in times of exceptional “good news”.
It is also important to consider the role of greed within the budgeting process of the firm. Perhaps you might want to think about the budget as a communication to employees about what ownership and management believes is its focus.
You might even want to see if any other of the exceptional “bad boys” in the business world were reflecting their greed even within their budgeting documents.