Question

I wanted to expand on the discussion of differences between the managerial and financial accounting and reporting.

What is the planning and control cycle? Would you consider this cycle to be a continuous loop in a organization?

Answer 1

Planning and control cycle starts with planning of the organizational objectives and setting standards and planning for the activities and processes to achieve those goals and standards. It further involves monitoring of the activities and procedures to ascertain their effectiveness and efficiency. Control comes as the last step in this vicious cycle which enables to access the results and make revisions in the original planning. It works as a process in itself as planning and control lead and follow to each other in the process.

Yes, planning and control cycle is the continuous loop in the organization as plans are needed to be controlled in order to check, determine and ensure their effective implementation. Controlling these plans, in return, enables to know the improvements that should be made to the original plans by assessing their shortcomings. Control leads to continuous improvement in the planning process and planning leads to continuous control. The planning and control cycle is, thus, an ongoing process of the organization.