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Question: Arun the managing director is surprised that his profit every year is quite different from what he wants or expects to achieve. Someone advised him to install a formal system of budgeting. He employs a fresh accountant to do this. For two years, the accountant faithfully makes all budgets based on previous year accounts. The problem remains unsolved. Advise Arun the managing director and the accountant on what steps they should take. Make assumptions about what is lacking.
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