What is a limitation of using financial budgets?
A) They can be so detailed that they are cumbersome and expensive.
B) They can become a substitute for objectives.
C) They can hide inefficiencies if done only on precedent.
D) They are sometimes used as instruments of tyranny.
E) All of the above

Question

Quizplus · Accepted Answer

All of the options listed are limitations of using financial budgets. Financial budgets can be too detailed, leading to additional costs and time spent creating and maintaining them. They can also become a substitute for objectives, where the focus becomes solely on meeting the budget rather than achieving the desired outcomes. Additionally, if budgets are created based solely on past performance, inefficiencies may be hidden, and opportunities for improvement missed. Finally, financial budgets can be used as instruments of tyranny, where managers impose them without input and use them to control and punish employees.

What Is a Limitation of Using Financial Budgets