Financial Control

Chapter 6

Dian Indri, SE., M.Si

• Limitation of accounting
• Technology
• Supply and Demand
• Management Service
• Information System
• Control system  design and implementation
• Dilemma  accounting goal and definition
• Control system comprehensive
Dian Indri, SE., M.Si
Definition on Financial Control
• Mechanical Feedback vs Behavioral
Responses
• Focus on Financial Control
– Individual in Organization, not about machine
– Behavior assumption
• Not only about human behavior or focusing, but
also:
– Machine is still important
– Remote control and nature influence to us
• Behavior and Mechanical combination
Dian Indri, SE., M.Si
• Extending Traditional Concepts
• Influence individual behavior
• Goal  behavioral outcome
• Comprehensive Control
– Planning characterized in terms of goal setting behaviors
– Operations
• the conduct of the operating activities of the organization,
including the provision of services and the manufacture of
products as well as the necessary support functions needed
to sustain operations
– Feedback  formal/informal, verbal/nonverbal
– Control Interactions 
Dian Indri, SE., M.Si
Contextual Factors
• Context
• Important
• Refers to the set of characteristic the determine
the empirical setting in which the control system
will be applied
• Size
• An opportunity and a constraint
• Environmental Stability
• Innovative approach
Dian Indri, SE., M.Si
• Profit Motive vs Nonprofit
• Process Factors  crucial
• A simple process  cause effect relationship
• A complex process  multiple relationship
• Discretionary cost
– No relationship input-output
– difficult to control
– uncertain effect
– Examples  research and development

Dian Indri, SE., M.Si