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Discuss two types of control system in management accounting

      

Discuss two types of control system in management accounting

  

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Faith

1. Feedback control system
Feedback is information about actual achievement produced from within the organization e.g Management accounting could reports with the purpose of helping with the control decisions. Feedback is information gathered by measuring the output of a system itself. Feedback can either be negative or positive.


(a) Negative feedback:
Information that indicates that the system is deviating from its plan or prescribed cause of action and that some re-adjustments are necessary to bring it back on course. This feedback is referred to as negative because the control action will seek to reverse the direction or movement of the system back towards its planned course.

Negative feedback: gives rise to attempts to changes direction of actual movement of the system to bring it back in line with the plan.
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Feedback is important, but there are four necessarily conditions that must be satisfied before any process can be said to be controlled.

These are:

1. Objectives for the process being controlled must exist.

2. The output of the process must be measurable in terms of dimensions defined by the objective.(ie. Quantifiable)

3. A predictive model of process being controlled is required so that cannot non-attainment of objectives can be determined and proposed corrective actions taken/evaluated.
4. These must be a capability of taking action so that deviations from the plan can be reduced.

2. Feed forward control system
Feed forward describes a control system in which deviations in the system are anticipated in a focused or future results so that corrective actions can be taken advance of any deviations actually happening e.g. critical path method, cash budget.

Feedback – actual errors are identified before a decision is made

Feed forward- likely errors are identified and steps are taken to avoid them.
Titany answered the question on October 12, 2021 at 08:19


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