Firstly it is necessary to define the concept Budget

Firstly it is necessary to define the concept Budget “ A quantitative statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flows.” (Drury, 2004) and by other hand the concept of Control is defined as “the process of ensuring that firm´s activities conform to its plan and that its objectives are achieved. There can be no control without objectives and plans, since these predetermine and specify the desirable behaviour and set out the procedures that should be followed by members of the organization to ensure that a firm is operated in a desired manner” ( Drury,2004: 455)

The budget is a tool for planning and control than, in a certain way integrates and coordinates areas, departments, activities and responsible for an organization. Its main purpose is to express what you want to achieve in the future by predicting and managing future situations to which you want to go, this proves to be the primary objective in any business today, so the use of budgets is established as the best means internal control that any organization can have. In addition it is an important factor because minimizes behavior problems within accounting systems for control.

“Budgetary control and standard costing control system are introduced with the intention of influencing human behavior and motivating managers to achieve the goals of an organisation.” (B.K.Bhar, 1970). The use of budgets has a significant effect on human behavior, as its budget control system provides real data to be compared with future forecasts, this will help promote motivation used as an instrument of participation and guidance in the decision making process and ensure the attainment of a successful budget.

For proper budget system 5 Factors which lack in the case of Charles Ltd. will be required, these are:

 Adequate management: Proper management and support is essential, because the main function of the budgets is to provide advice and an overview to the direction of the current and future situation for subsequent business decision making. In this case we can see how it lacks adequate management and support are needed.

 Defined structure of the company: The structure of any organization influences budget preparation, so it is necessary to establish an organizational structure and both functional. In the case we studied the structure of the company is not clearly defined.

 Full participation: As we studied the objectives should be established logically and should be known by all members of the organization, therefore, everyone in the organization must have a clear understanding of the role are expected to play in achieving the budget year, as this will cause the employees are motivated to perform their functions in the company and to achieve the targets set. As can be observed, the company Charles Ltd. does not have the participation of

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