Budgetary Slack on SOEs in Bandung-Indonesia: The intervening Effect of Information Asymmetry on Participative Budgeting and Budgetary Slack

Authors

  • Carolina Y
  • Kenisah M. L.
  • Rapina ​

Abstract

Budget is an important tool in strategic planning and corporate control. Budget control is done by comparing the budget with actual conditions and is used as a basis for evaluating the performance of business units or individuals. So, individuals or business units will negotiate to create budget targets that are easily achieved by utilizing asymmetric information, to create a budget slack.This study aims to analyze the effect of participative budgeting on asymmetric information and its impact on budget slack. Data collection in this study was carried out by distributing questionnaires, interviews, and FGDs which results were analyzed with the structural equation model (SEM) LISREL. The results showed that asymmetric information has a positive effect on budgetary slack and participative budgeting has a positive effect on asymmetric information.

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Published

2020-01-27

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Section

Articles