Use of computer simulation to assess measures of variation of deviation in budget control

A natural consequence of the budgeting process is budget control, the effectiveness of which depends largely on the quality of the deviation analysis. As part of this analysis, the expected quantities are most often compared with the observed/actual ones, and the reasons for the deviations are investigated. In budget control, it is important to deconstruct deviations into components and to determine the impact of factors affecting these deviations. Therefore, budgetary control should be extended to the analysis of budget deviations in terms of its subject and temporal nature. This generally applies to every planning and control process, while the authors in their research concentrate on budgeting revenues and operating costs in enterprises. In this study, three measures used in economics – the GINI, Hirschman-Herfindahl, and Theil coefficients – were evaluated as potential metrics for budget deviation differentiation. Simulated computer data was used for this study.