An Application of Control System To Cost Variance Analysis

Abstract

Accounting, particularly in the area of cost variance analysis, contains a great deal of ambiguity due to imprecise or ill‐defined control terms. Cost accountants must continually incorporate good sense and professional judgment in the accounting process to overcome that ambiguity. Because of the construction of accounting expert systems, no ambiguity is present in the facts or rules, thereby excluding human reasoning and analysis of feedback within those systems. The use of fuzzy sets to build fuzzy control systems provides a method to incorporate ambiguity into expert systems, allowing expert systems to more closely emulate the complex human decision making process.