antecedents of budgetary slack a literature review and synthesis

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Antecedents of Budget Slack: A Literature Review and Synthesis

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The purpose of this study is twofold. The first objective is to examine the impact of an individual's ethical ideology and level of professional commitment on the earnings management decision. The second objective is to observe whether the presence of a personal benefit affects an individual's ethical orientation or professional commitment within the context of an opportunity to manage...

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Honesty in budgeting: a review of morality and control aspects in the budgetary slack literature

• Original Paper
• Published: 01 June 2018
• Volume 29 , pages 115–159, ( 2018 )

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• Christian Daumoser 1 ,
• Bernhard Hirsch   ORCID: orcid.org/0000-0002-7283-558X 2 &
• Matthias Sohn 3  

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Budgetary slack is a heavily researched topic in the field of management accounting, but the heterogeneous nature of prior research blurs our understanding of this important topic. In this paper, we provide a structured overview of research on budgetary slack published in top-tier accounting and business ethics journals and reach the following conclusions: Participative budgeting can create or reduce budgetary slack. Less slack is created under truth-inducing pay schemes compared to slack-inducing schemes. Additionally, slack creation is affected by budget users’ risk attitudes and information asymmetry. Information asymmetry increases budgetary slack, but that effect is influenced by multiple factors, including budgetary participation and information systems. Fairness and reputation concerns decrease budgetary slack, but ethics concerns do not. Finally, the analysis revealed that social norms decrease slack and peer influence moderates the effect. We show that research in this field focuses mainly on psychological perspectives to analyse individuals’ budget-related behaviour. Experimental research was determined to be the most frequently used research method. An analysis of current experiments shows growing numbers of investigations of budgetary slack as a proxy of honesty in managerial reporting.

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Within these journals, we searched for “slack”, “budget slack”, “budgetary slack”, “honesty”, and “honest reporting”.

The sample was determined in June 2014 and updated in January 2018.

Analytical, archival, experimental, and survey-based studies are easily distinguishable. Field studies and archival research differ based on the manner in which archival work is a part of field studies. Framework-based studies differ from reviews based on the development of new perspectives, whereas review articles mainly serve to structure the previous literature (Hesford et al. 2007 ).

The articles are ordered alphabetically to offer a reference book setting for research methods and samples.

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Daumoser, C., Hirsch, B. & Sohn, M. Honesty in budgeting: a review of morality and control aspects in the budgetary slack literature. J Manag Control 29 , 115–159 (2018). https://doi.org/10.1007/s00187-018-0267-z

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Published : 01 June 2018

Issue Date : August 2018

DOI : https://doi.org/10.1007/s00187-018-0267-z

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