Where there is an insignificant adverse variance, management is best advised to:

Question

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Keeping the variance under review allows management to monitor any potential trends or patterns that may be emerging. Ignoring it completely may lead to larger variances down the line, while investigating immediately and in full detail may not be cost-effective for an insignificant variance. Compensating for an adverse variance with an insignificant favorable variance may also not be the best approach as each variance should be analyzed on its own merit.

Where There Is an Insignificant Adverse Variance, Management Is Best