Variance Analysis of Expenses-PLS Help!!!!

Variance  is difference between budget and actual.

@ amit if that wat variance analysis means den i hv to compare expected budget of expenses with actual expense incurred?? 

But y i m supposed to do dat as stat audior?? dont u think dats the work of Internal auditor??

Hi, I am into variance analysis profile...I hope I can help u..

See, in variance analysis, you should first gain an understanding of budget/plan  that the company had fixed ahead of the year starting..you should see what are the major heads of expenses and then try to drill down into details..u should know the assumptions taken in the plan for arraiving at the Planned numbers e.g business volumes projected, related increase in cost due to change in volume, expansion and inflation.

now for actuals, you should find out the expenses where there is variances and then try to know what are the factors leading to variances, it could be due to: change in business voulmes, changes in economic, regulatory environment, change of management decisions, and so on.. for example, marketing cost may be low bcoz management deferred the adverstisement exp to next year...hence the variance...staff cost may be higher due to higher salary offered driven by higher demand....

Hope this helps you dear.... ALL THE BEST !!!\

Regds, Uttam