24. What are the dangers of budgeting ? It creates inflexibility There is a possibility of over or under budgeting (both the situation create problems) budget creates rigidity Budgets takes away attention from main objectives People give more importance to budget (not to the ultimate goals of the organisation ).

25. Effective budgeting ? The budget should be related to the goals of the organisation. Budget should be able to link the performance to the mission and vision of the organisation There should be flexible budgeting budget should be formulated by employee participation Budget should be actually implemented Budget limiting factors must be specified

26. How else can control be maintained ? Personal observation Guidance Feedback Statistical Data analysis Ratio analysis Break Even Analysis Analysis of financial data