What are the potential downsides to management by exception?(100 words)
Expert Answer
The potential downsides to management by exception are:
1. Variance between the factor of budget and the actual valuewhen the budgeting process is not conducted properly.
2. The decisions made are centralized as well as performance andvalue dependent and believes that only the management can cover thevariances.
3. Need for constant control and monitoring process is necessaryfor the proper functioning of this system.
4. Need for accounting professionals to create the budgetincreases the overhead costs of operation.