Question & Answer: Management can develop accounting systems to closely track costs and identify deviations from expe…..

MANAGEMENT CAN USE MANAGERIAL COSTING FOR AS A CONTROL AND DIRECTION.

MANAGERIAL COSTING WILL PROVIDE DIRECTION BY STANDARD COST SCHEDULE WHICH CONTAINS THE STANDARD DATA OF COST AND RESOURCES TO BE USED FOR PARTICULAR ACTIVITY LEVEL.

IF ANY ONE HAVE TRIED TO MAKE FRAUD, THE PERFORMANCE WILL BE DEVIATED FROM THE STANDARD DATA PROVIDED.

AT THE PARTICULAR INTERVAL, ASSESSMENT WILL BE MADE BY COMPARING THE ACTUAL PERFORMANCE WITH THE STANDARDS SET.

ANY VARIANCE FROM STANDARD IS FOUND IN ASSESSMENT, THEN VARIANCE ANALYSIS REPORT WILL BE PREPARED WITH DETAILED ANALYSIS.

THIS WILL BE HELPFUL IN FINDING ANY MAL PRACTICES RUNNING IN THE ENTITY.

ANOTHER SUCH TOOL IS MAKING BUDGETS.