Explain what interactive and diagnostic use of budgets are, Accounting Basics

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Explain what interactive and diagnostic use of budgets are

Problem

Based on the topic of Budgeting and the reading of Hofmann (2012), Hofmann, S., Wald, A., & Gleich, R. (2012). Determinants and effects of the diagnostic and interactive use of control systems: an empirical analysis on the use of budgets. Journal of Management Control, 23, 153-182.

Task

i. Briefly explain what the interactive and diagnostic use of budgets are.
ii. Explain the effects of market dynamism and leadership behaviour on interactive use of budget.

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