... the responsibilities of the executives to the requirements of the policy, and by continuous comparison of actual with budgeted results either to secure by individual action the objective of that policy or to provide a basis for its revision. Therefore, the budget also needs to be related to the final objective, and undergo revisions (Chadwick 1998). If we look at an example of a project that did not have any budgetary controls we may see how a project can fail. A company may have a great demand for its goods and need to increase capacity. A plan to build an extension is put forward, costed out at half a million dollars, and the plan is accepted as this is seen as affordable without the company needing to increase borrowing. The plan is approved and the project begins. The projects hits some difficulties, but an underground cavern needs to be ...

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