The Measurements of Budgetary Slack: The Empirical Evidence of Listed Companies in Thailand

Abstract

Abstract-This study introduces an objective measurement of budgetary slack based on ex post measure of firm's annual budget achievability with the exclusion of earnings management through discretionary accruals rather than the traditional subjective measurement based on management's perceptions. Also, this study empirically examines the association between budgetary slack and its determinants under various budgetary slack measurements. This study uses data from survey questionnaires and data from the annual financial statements for the year ended 2009 of listed non-financial and non-rehabilitation companies in Thailand. The population covers 387 firms and there are 38 returned and usable questionnaires which is 10% response rate. Although the objective measurement of budgetary slack is statistically found to be positively related to the traditional subjective measurement, the suggested objective measurement is considered to be a superior one. Moreover, the association between budgetary slack and its determinants is relatively sensitive to the measurements of budgetary slack.Index Terms-Budget achievability, budgetary slack, discretionary accruals, earnings management.

Analysis of Factors Which Affect Budgetary Slack (Survey of SOE in Bandung)

“…This behavior creates a perception that marking-up / marking down is a common thing to do. This is in line with the results of research conducted by Ngo et al (2017), Kren & Maiga (2015), Faria & Silva (2013), Aprila & Hidayani (2012), Damrongsukniwat et al (2011), Fisher et al (2002), and Dunk (1993 who acknowledge that asymmetric information has a positive effect towards the occurrence of budgetary slack.…”

“…Asymmetric information occurs when an agent (subordinate) conceals the information so that the principal (supervisor) does not have any sufficient information to measure the actual contribution made by the agent (subordinate) to the company (Macintosh & Quattrone, 2010). Previous studies also have the same concern by agreeing that asymmetric information has a positive effect towards budgetary slack (Ngo et al, 2017;Kren & Maiga, 2015;Faria & Silva, 2013;Aprila & Hidayani, 2012;Damrongsukniwat et al, 2011;Fisher et al, 2002;Dunk, 1993). H1: Asymmetric information has a positive effect on budgetary slack…”

Budgetary Slack: Iklim Kerja Etis, Motivasi Berprestasi, dan Komitmen Organisasi, Modal Intelektual

“…Teori legitimasi didasarkan pada citra diri yang benar-benar dapat diterima oleh pihak lain (Cromartie, 2003) & Sullivan, 2017). Perilaku disfungsional ini d i t u n j u k k a n k e t i k a o r g a n i s a s i menggunakan anggaran untuk mengevaluasi kinerja, rencana pemberian kompensasi berbasis anggaran tradisional dengan memberikan insentif keuangan bagi bawahan memicu produktivitasnya dan m e n c i p t a k a n s l a c k a n g g a r a n (Damrongsukniwat, Kunpanitchakit & Durongwatana, 2015).…”

Pengaruh Mediasi dari Perceived Responsibilty terhadap Hubungan antara Obedience Pressure dan Budgetary Slack

“…Anggaran yang dibuat longgar akan menyebabkan anggaran tersebut mudah dicapai sehingga penilaian kinerja berdasarkan anggaran memberikan hasil yang baik. Hal ini sesuai dengan penelitian Damrongsukniwat et al (2015) yang menyatakan bahwa budgetary slack berhubungan positif dengan ketercapaian anggaran. Anthony dan Govindarajan (2007) menuliskan dalam bukunya bahwa budgetary slack adalah selisih antara anggaran yang ditetapkan dengan anggaran yang sesuai dengan estimasi terbaik dari organisasi.…”