CRITICAL EVALUATION

Critical Evaluation

Critical Evaluation

Introduction

This paper summarizes compares and critically evaluates two articles that belong to the subject areas of accounting and finance. The first article is penned by Peter Brownell and Alan Dunk. It studies the phenomenon of budgetary participation. The article relates to task uncertainty and its interaction with budgetary participation and emphasis, which have been supported by empirical investigation and methodological issues. The second article is a case study that concerns with the practical applications of ABC costing system its contribution to overhead cost allocation systems. It is written by Andrew Goddard and Kean Ooi. Both the articles provide valuable insights to the accounting and finance literature and are help in developing our understanding about critical issues and applications within the domain (Kaplan, 1987, 178).

The first article “Task Uncertainty and Its Interaction with Budgetary Participation and Budget Emphasis: Some Methodological Issues and Empirical Investigation” concerns with the Hopwood and Otley conflict that positively related high budget emphasis with job related tension. Brownell found out that enhanced managerial performance results from a high emphasis on budget and high Budget Participation (BP). BP is defined as “a process of joint decision making by two or more parties in which the decision has future effects on those making them”. The article refers to the ideal practice for managerial performance that is linked with a low task uncertainty. In cases where Brownell found that the tasks were well defined and structured, a low emphasis on budget making along with a low budgetary participation can result in significant enhancement in the performance of managers. Participation is a positive sign that enables managers to access resources that may better define their tasks and help them in outlining their responsibilities. However Brownell and Hirst (1986) admitted that a lack of empirical evidence on the subject may reduce its efficacy and also that there was no sampling method used to prove the hypotheses. In this article task uncertainty is defined in terms of two attributes that convert inputs to outputs. These attributes include the extent of quantifying the task to programmable steps and the occurring frequency of unanticipated events during the course of the task performance (Drucker, 1999, 178).

The other article is a case study analysis by the title “Activity Based Costing and Central Overhead Costing Allocation in Universities”. In this case study it was argued that few universities employ the ABC costing methodology within their settings. This is in contrast to the increased levels of management accounting systems within the universities. The non-applicability of BAC costing system in higher education sector is surprising and definitely requires logic. This shows that while ABC costing systems are very popular within accounting applications, they might not find their suitability in this particular sector. Organizations, previously, viewed overhead allocations as unreasonable and unmanageable. The ABC costing system brought improvements in this concept as managers tend to relate the process to credibility and reliability. Hence within the context of universities, this process finds potential ...