Question

Question #2

List and describe the objectives of a controller conducting “post-project” audits of capital budgeting projects.

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Answer 1

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List and describe the objectives of a controller conducting “post-project” audits of capital budgeting projects.

Objectives of a controller conducting "post-project" audits of capital budgeting projects

Aids in learning of the organization:

It is one of the procedure aids in learning of the organization. The post-project audit of a project is one of the managerial practice of systematically monitoring and giving feedback on performance of past decitions in planning and execution.

Effectiveness and eficiency:

The Post-project audit calculate the after event efficeincy and effectiveness of capital budgeting decisions.and its conduction.It is based on comparision between budgeted and actual actions, costs, resource utilization, and results.It focuses on all assumptions, cost of capital, technological conditions environment etc made at the time of decion making.

Continuous improvment:

To support continous improvement in capital budgeting process. This process is future oriented and continuous based on different elements

Implementation of corrective action:

Post-project audit is conducted to take corrective measures and implementation of such actions for projects under the review. This gives an opportunity to review the present and future cash flows and update them as necessary.

Review of current procedures:

Post-project audit allows for the review of present procedures and design of better ones to enhance decisions in future. It guarantees better execution and better results.

Financial and non-financial factors:

Post-project audit is done to evaluate the diferent factors affected at the time of taking capital budgeting decisions. The factors can be finacial or non-financial. Its objective is to find factors affecting and their individual impact on the decision making

Psychological hinderances:

to find out the psychological political hinderences on the capital budgeting decision is yet another objective of Post-Project Audit. It means to evaluate such factors, their impct and tries to remove or reduce the impact of such factors on capital budgeting deisions in future.

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