Senior management establishes guidelines for acceptable expenditures and then allocates a specific amount of money to a security department. This type of budget process is called:
A top-down budget process occurs when senior management allocates a specific amount of money to a department and sets guidelines for acceptable expenditures. The department then plans within the allocated funds.
Centralized Control:
Senior management determines budget priorities and allocates resources accordingly.
Guideline-Driven:
Departments operate within pre-established financial boundaries.
Efficiency:
Simplifies the budgeting process by reducing negotiation and iteration at lower levels.
A: Zero-based budgeting starts from scratch and requires justification for all expenses.
B: Bottom-line budgeting focuses on the total expense limit but not on allocation methodology.
D: Bottom-up budgeting involves departments proposing budgets that are then reviewed and approved.
Key Characteristics of Top-Down Budgeting:Why Other Options Are Incorrect:ASIS CPP® References:
Domain 9: Business Principles and PracticesExplains the budgeting methods, including top-down and their implications for resource allocation.
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