It Facilitates The Budgeting Process

Audit process is very stringent and the whole process is driven by a framework. It is very important to have a defined framework as with the case of project management where a defined scope is essential. This legislation will give more responsibility to audit firms to conduct stringent audit and remove all corporate mal practices from the industry. Investor communities have flea from the market after incidents like Enron, Satyam and Arthur Anderson. This is a reason why global community has adopted best standards of audit and makes audit quality and process more robust. This is exactly the case with this legislation which will put a strong audit process forward. The major functions of the budget are To cap the amount of expense which is possible. Allocating different heads of expenses which will be made in a year. Providing a direction to the organisation which the company should follow. The majority of the effort in normal budget preparation is spent working to balance expenditures against revenue within the legally mandated budget structure. That structure allocates funds to accounts within legislatively established programs, usually for an annual (or biennial) budgeting period. Budget directors rely on econometric models to estimate overall revenue