The variances reported in the nal budget-to-actual comparisons incorporated in the nancial statements of many governments may

Question:

The variances reported in the ‘‘ﬁnal’’ budget-to-actual comparisons incorporated in the ﬁnancial statements of many governments may be of no value in revealing the reliability of budget estimates made at the start of the year. Why? How can you rationalize this limitation of the budget-to-actual comparisons?