Exam IIA-CIA-Part3 Topic 11 Question 74 Discussion

Zero-based budgeting ZBB) is a planning process in which each manager must justify a department's entire budget every year or period). Under ZBB, a manager must build the budget every year from a base of zero. All expenditures must be justified regardless of the variances from previous years' budgets. The objective is to encourage periodic reexamination of all costs in the hope that some can be reduced or eliminated. Different levels of serve. e work effort) are evaluated for each activity, measures of work and performance are established, and activities are ranked prioritized) according to their importance to the entity. For each budgetary unit, decision packages are prepared that describe various levels of service that may be provided, including at least one lower than the current one.