When the stakes are high...

Article Abstract:

Capital projects such as those related to the development of nuclear power plants, technologically innovative designs (the Rolls Royce engine or the Concorde), and any large-scale public works tend to cost more than projected and are therefore difficult to manage. For example, by the time one nuclear power plant came on-line in the U.S., it had exceeded its original completion-cost budget by 1,500 percent. Although most accounting textbooks advise accounting managers to "ignore sunk costs" and cut expenses by terminating projects that have run grossly over budget, in most cases this academic approach is not followed. Methods for minimizing waste, following a decision to continue on an already over-budget project include: (1) segment reporting of the project that focuses on controllable costs and controllable profits, (2) zero-base budgeting techniques, and (3) continuation of a singleproject management team. Also important to the proper financial management of capital projects is the generation of frequent, updated forecasts as to the project's scheduled completion and costs to be incurred as of that date.

Methods, Industrial research, Capital investments, Managerial accounting

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Poland needs help creating auditors

Article Abstract:

Poland is experiencing a great demand for auditing services as accounting and auditing systems under the former command economy are proving inadequate under the new market orientation of the Polish economy. Auditing in the past was done for statistical and fiscal purposes and not to provide relevant information for members of the company and shareholders. Polish accountants typically do not have the skill or independence to make adequate audits. Solutions for the problems include training English-speaking business graduates in Western accounting methods and educating clients as to the need for auditing. Western auditing documentation must be translated into Polish and tailored to Polish law and practice to make it useful for Polish auditors.

Accounting and auditing, Auditing, Poland, Corporations, Corporations, Polish

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