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Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is termed as the contingency theory. The contingency approach to management accounting is based on the assumption that there is no universally appropriate accounting system applicable to organizations in all circumstances. Rather contingency theory attempts to specific aspects of an accounting system that are associated with certain defined circumstances and demonstrate an appropriate matching.
Major factors recognized are:
Environmental factors like:
Organizational Structure Factor including:
Technological Factors such as:
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