Kingdom of Saudi Arabia

‫المملكة العربية السعودية‬

Ministry of Education
‫وزارة التعليم‬
Imam Abdulrahman Bin Faisal University ‫جامعة اإلمام عبدالرحمن بن فيصل‬
College of Business Administration
‫كلية إدارة األعمال‬

Accountants’ competence in
Budgeting and forecasting

Financial budgeting and Accounting

(Project)

Instructor: Dr. xxxxxxxxxxx

Section: xxx

Student Name ID Number

1. Introduction

Budgeting and Financial planning is a process of allocating resources in better promising

financial ways to meet strategic goals and organizational objectives. The Financial planning

takes the form of budgets and widely used form of budgets is Budgeted Financial Statements

where the foundation of Budgeted Financial Statements is Detail given which include; sales

revenue forecasts, the production forecasts, Operations budget forecasts and other estimates.

Collectively, all these budgets parts are referred to as the Master Budget in business planning

and forecasting.

Accounting development has been since long year ago and has dome highly technical and

advanced to levels unimagined. The Major course being technology has been changed in a

very fast rate in recent years. Due to this, Entire businesses have been automated leading

another orientation of job market. The structure of the employees and employment in the

businesses and how the business work is done. The job of accountants in the modern bases is

not different; it has been transformed from manual job to computerized accounting. In fact,

the information technology and its radical change make the collect, processes and store

accounting or finance related information which use to control and manage business

activities different. This also includes training the employees through improving their

competences in budgeting and forecasting in each industrial setup industrial companies to

train their workforce on the use of programs and applications of modern electronic

accounting methods.
 2. Objectives/ Interest of Research

The Planning or Profit, known as the master budgeting, Is the most important techniques in

management accounting. There are two phases in budgeting process: which are; planning and

control. Preparing a budget compels management to recognize and assign values to all

departments like the marketing departments, production departments, and financial departments

including allowing them to help in making important decisions. The major importance of

preparing a budget is to obtain financial measure of the impact of net income decisions, business

financial position, and entire business cash flows.

The single change in a consequence can easily require major computational changes in all

budgets and supporting budget schedules. The modern world of computers and special financial

budgeting software removes the drudgery and many tediousness of budgets preparing a revising

the budget once and once more. The value increase and utility of a computerized budget

programs is that it allows the budget user to change decisions so that an immediate updating of

all budgeting elements are better accomplished

3. Basic Concept Definitions

There exist major terms in business planning and forecasting as major tools of budgeting process

and other terms thereof. A budget is a financial tool used in estimating expected income and

incurred expenses. It helps on how to invest and finances to change over a period and check

actual financial transactions for each period and make comparison to your planned transactions.
 The budgeting concept is quite general, a budgeting has both simple and flexible categories. The

business planners must make sure their decision is quite clear and the complex on simplifies to

better understanding or make it so simple for the purpose of making budget.

The Sales budget – is an estimate of future revenue or sales, it is often broken down into both

sales units and sales currency. It is used to create company sales goals.

Production budget – this is an estimate of the number of Production units that must be

produced or manufactured to meet the market demand sales goals. This production budget

estimates the various production costs involved with manufacturing those units, which include

labor and material.

Cash flow/cash budget – a prediction of the future cash-flow receipts and expenditures for a

time period. Cash flows covers a short-term period. The cash flow budget helps the business

determine when income will be enough to cover expenses and when the company will need to

seek outside financing.

The Revenue budget – it consists of revenue met from these sales units sold in the market. Tax

revenues are formed of tax sales and other government levies.

4. Literature Review

Yea The Author(s) Topic

r
Davidson, Elizabeth, Randall The maturity of Financial budgeting and
2017 Reback, Jonah Rocko, and forecasting professional accountants'
Heather L. Schwartz. perspective
International accounting standards
2018 Gilmour, John B. 2018 articulations in line with the GAAP The
Accounting Profession
"The Impact of Disruptive Technologies on
2019 Winerip, Michael. 2013. Accounting and Auditing Education: How
Should the Profession Adapt?
Redburn, F. Steven, and New Competencies for Management
2020
Kathryn Newcomer. 2020 Accountants: Certified Public Accountant
 According to an Article in the European major Journal of Economics. “the Budget and

Budgetary and Control for Improved business Performance: Consideration for Food and

Beverages industry, the Budget and budgeting concepts are traceable to the days of the bible as

well, deeper and accurately the times of Joseph in Egypt during which “there was nothing given

out of the treasury without a authority or written order‟.

In The Years 1920s the budget was introduced to manage costs and the cash-flows in

large industrial companies and organizations. The scholars and professionals like Johnson

(1996), said that it was then 1960s budgets were used by companies to show what people needed

to do in organization. But In the 1970s there were slight performance improvement based on

meeting financial direction targets rather than the effectiveness, otherwise the company would be

in problems in the 1980s when they weren’t willing to spend on innovations in order to stay with

the rigid and more planning budgets, the companies dropped the aspect of budgeting and were

not concerned about how the customers were being managed and treated, only meeting company

sales targets was essential deal .

The process of Budgeting is formally “In business organizations” associated with the

advent of industrial capitalism for the industrial revolution of the eighteenth century, which

presented a challenge for industrial management. We see that Budgeting is the development in

business organization which is concerned with future progress and must be put under great

preparing and presenting credible information to legitimize accountability and to allow correct

business performance evaluation and more consequently, rewards needed. For the long years, the

main functions and focus of financial budgeting has greatly shifted more considerably and that

business organization become more advanced and complex and their environment becomes more

dynamic coupled with the emergence trend, the term budget and budgeting have been differently
defined and checked by various students for several ways. The Omolehinwa in (1989) gave

definition of a budget as plan of dominant business individuals in an organization which is

expressed in monetary terms and is subject to constraints imposed taken in consideration by the

participants and the environments, which also are indicating how available resources are or will

be utilized, in order to achieve dominant activities made by individuals and agreed as priorities.

The forecasting and budgeting Framework consist of six domains:

1. budget Strategy, articulation to Planning, and budget Performance: which domain includes

activities such as competitive analysis, forecasting and budgeting, operational decision analysis,

enterprise risk management, and innovation.

2. financial Reporting and major Control: With the use of Automations in the financial industry

which has made great accounting processes, whole management to be able to measure and make

the best evaluation with effectiveness and required efficiency of the accounting processes and

provide best suggestion to improve ways of accountability. Also, they need to effectuate

developed costing techniques and procedures to guarantee data security, protect assets, and meet

legal and reporting requirements.

3. Financial Technology and Analytics advancement: This domain is considered the greatest

change in the Budgeting and forecasting framework. All the departments in accounting and

finance professionals must get quintet with current Financial technologies to achieve required

success. One must use properly financial tools to collect information data, manage accounting

data for budgeting process, and analyze financial data as required for better accountability.

4. proper Business acumen and budget planners: looking inti the technology advancement we

find major activities that need to be checked while working from any distance or planning for the

budgeting process, the management accountant must understand the importance of the
techo9nology advancement and appreciate the fact about the better and easier working

environments give n in the process of implementing the activates based organization The

accountant must be able to make business decisions and judgments, and to obtain better insight

into the overall operations of a business.

5. Budgeting and forecasting leadership : apart from the technical skills needed the personal

skills are also paramount, the Personal skills required are vital to collaborate with others and

encourage them to achieve the organizational better goals, such as communication, relationship

management, and conflict management.

6. Accounting and budgeting Professional ethics and values: the domain tell us more about

the competencies that are required to prove the professional values, professional ethical and

personal behavior, and more so the legal compliance essential which are more sustainable

business model need as mentioned by the . (Lawson, R. 2019).

5. Findings

We took major detail of organization strategic planning and future development and

branching to other parts of the world assisted by the guidance of the other study by scholars

study by Bahador, K.M.K. & Haider who gave great motivation by the observation of failure and

success of providing services by accountants which are often attributed by lack of budgeting and

accounting skills and competencies. To reduce impact of technological advances on the

accountants, the following topics should be taken into considerable manner. Accountants must be

understanding the role of their job professional skills in Accounting, budgeting and forecasting

as they perform their jobs. Second, accountants must understand the specific issues and topics

related to the services offered to clients and how Accounting, budgeting and forecasting skills
affect and how to identify them. Finally, organizations should develop a comprehensive

Accounting, budgeting and forecasting competency development plan for managers, partners,

senior accountants and junior accountants to identify and address service delivery issues.

As per Georgel TUDOR, C., GHEORGHE, M., OANCEA, M. & SOVA, R., there is a great

important to present accounting and budgeting information and communication technology in

accounting teaching. And according to the practical part on their research, the educational

requirements analysis must consider the present and indispensable level of knowledge of

technologies associated Accounting, budgeting and forecasting with obligations expressed over

the roles they implement in a professional way.

Another best scholar , Zhang, C.(., Dai, J. & Vasarhelyi, M.A found out lack of the necessary

skills the professional accountants need to do their work better. Also, accounting educators

should focus high-level skills. Cybersecurity which cost Accounting, budgeting and forecasting

department high, and data analytics and processing

The scholar “Lawson” depicted that with the business world and technologies rapidly

changes, the skills and competencies needed by Accounting, budgeting and forecasting

professionals are changing. The Accounting, budgeting and forecasting professionals will need

new improved competencies in areas running from strategic management Accounting, budgeting

and forecasting, technologies, analytics, business acumen, and professional values and ethics.

This Framework can be used as a guide to make their skills relevant to today’s Accounting,

budgeting and forecasting environment. The IMA Competency set Framework covers six core

domains necessary by accountants nowadays. IMA provides Accounting, budgeting and

forecasting driver and Assessment Tool, it provides a path for Accounting, budgeting and

forecasting professionals to push forward their careers.

6. Conclusion

The aim of this research is to establish the practice of budgeting, budgetary control and

performance measurement within ATS. The research established that the use of budget among

the other key actors are at the low level, it is also established that monthly performance by

Accounting, budgeting and forecasting report fail reaching the managers, and most of the drifts

in the performance in respect of meal cost and the number of employees for a project are

misplaced in the budget. Even though the budget template looks complex, it is also established

that the key actors readily catch up when taken through. Most project Accounting, budgeting

and forecasting are also willing to participate in the Accounting, budgeting and forecasting

building as they would be made to account for it at the end of the month. Again, the

communication flow between the Regional Business Managers and the project units on budget

related issues is also established to be minimal. It also came to light that project managers’

rotation are done without recourse to the budget thereby creating budget deficit in most cases and

that affect the Accounting, budgeting and forecasting at the performance level of the projects.

7. Reference

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case study of (Emenite Nigeria Limited Emene Enugu Branch),

http://www.caritasuni.edu.ng/pro/management/acc6.doc (17th July 2012)

2. Arthus, J. Keown, .1. William Petty, John D. Martin, David, F. Scott, 10-14 2002,

Foundation of Finance : The Logic and Practice of Financial Management, Prentice Hall :

New Delhi.
3. Budgeting and Budgetary Control (http://www.slideshare.net/JudeIheanacho/budgeting-

and-budgetary-control) (15th June 2012)

4. Chandra, Prasanna, 1985. Managers' Guide to Finance and Accormting, Tata McGraw-

Hill: Delhi (Chapter 8 & 24).

5. David Anthony Holloway; (2006) Strategic Management Accounting and Managerial

Decision-Making reconceptualised: towards a collaboratively Oriented theory of

Organizational Decision Enhancement (ODE)

http://researchrepository.murdoch.edu.au/104/1/01Front.pdf ( 20th December, 2011)

David A Palmer, 2000; Budget Control And Variance Analysis;

(http://www.financialmanagement development.com/Slides/handouts/213.pdf) (17th

January 2012)Gershon Kpedor 2012; ATS Budget Manual (ATS Server)

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Accounting, 11 th ed (Part 2); Prentice Hall of India : New Delhi.

7. Ishola Rufus Akintoye (2008) “Budget and Budgetary Control for Improved

Performance: A Consideration for Selected Food and Beverages Companies in Nigeria”)

Article from European Journal of Economics,

(http://www.eurojournals.com/ejefas_12_01.pdf) (17th January 2012)

8. Moor, Carl L. and Robert K. Jaedicke. 1976. Managerial Accounting, South Western

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(http://sci2s.ugr.es/docencia/doctoCaminos/F-Herrera Metodologia%20de%20la

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10. Maheshwari, S.N. 1987. Management Accounting and Financial Control, Sultan Chand:

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