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Budgetary control variances are followed by:
ACapitalisation
BDirect refund
CInvestigation and corrective action
DAudit qualification
Answer & Solution
Correct answer: C. Investigation and corrective action
1. Variances raised by budgetary control are signals, not conclusions.
2. They prompt investigation into root causes.
3. Subsequent corrective action restores the cost to plan.
4. Hence variances are followed by investigation and corrective action.
_Source: ICAI BoS Inter Paper 3, Ch 15 "Budget", §15.9.2 ¶3_
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