Abstract

Many studies have dealt with the subject inflation and its effects on the accounting information taken out from the financial statements. All studies have agreed on the necessity of inflation accounting in preparing the financial sheets under an economics suffering from continuous change in the general level of prices.
This study has aimed at shedding the light on the importance of using the inflation accounting in preparing effective, applicable and controllable budgets.
The study included the B.C.A.I. as a sample and it has come up with:
1- The use of the historical costing principle in preparing the budgets does not achieve the goal of these budgets because the plan cannot be applied with real productivity.
2- It is necessary to use the inflation accounting in preparing the budgets for their efficiency in controlling and deciding the definition and dealing with them in a right way.