Limitations of Diagrammatic Presentation
The limitations of diagrammatic presentation of cost information are as follows:
1. Drawing inferences and interpretations from diagrams and graphs need experience and care. Hurried inferences and interpretations through inexperienced people from diagrams and charts might result in consequences fatal for the business.
2. Diagrams and graphs do not depict perfectly accurate data. They are usually based on approximations. So these are suitable for general guidance and not for taking particular decisions.
3. Diagrams and charts can provide misleading results if not correctly drawn. A department or a person might exist information to the management in a way that suits the department or the person concerned. This might be done through wrong selection of scale or method.
So, the visual presentation of data should be resorted to only within specific safeguards and for describing the importance of some statistical facts in general. Particular investigations need exhaustive analysis and there the diagrams and graphs might not be much helpful. The selection of the type of diagram should be complete after considering the nature of data, the object of presentation, etc. In order to get the wanted objective, the cost accountant should merge his knowledge, experience, skill and impartial attitude.
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