The Joint Variance: A Comment.

Abstract The article comments on the work of accountant, E.V. Mclntyre's titled, A Note on the Joint Variance, in the January 1976 issue of the periodical "The Accounting Review," raises a number of questions regarding the nature of the three variance approach which generates the joint variance and whether the three-variance method should be taught at all. Two points should be considered. The first is whether the joint variance meaningful concept in relation to principles of managerial control. The second point is whether the understanding of the nature of the variance is enhanced by the model espoused by McIntyre or if the simple elegance of the area model superior. The author provides an opposing viewpoint and shows that, a different interpretation of the joint variance can be obtained if one accepts assumptions associated with the two-variance model. He shows that a number of managerial considerations are important in evaluating a particular model. Among these considerations are factors such as principles of managerial control, the separation of organizational functions and the operational implementation of the model.