Budgetary Slack

Budgetary Slack

The deliberate overestimation of expenses or underestimation of revenue for a project. Budgetary slack may be built into a project so that if expenses are less and/or revenues are more than expected, the project and its managers are viewed favorably by investors and/or executives.
References in periodicals archive ?
The Effects Of Pay Schemes And Ratchets On Budgetary Slack And Performance: A Multiperiod Experiment.
1985, Participative Budgeting: The Effects of Risk Aversion and Asymmetric Information on Budgetary Slack, Journal of Accounting Research, 23, 829-842.
So generalisation will be conditional and depend on the type of consultation, the type of employee and the work involved, the significance of budgetary slack and the nature of the reward system--among many other factors.
Managing budget emphasis through the explicit design of conditional budgetary slack.
reduce divisional managers' expenditure on perquisites, reduce budgetary slack and encourage optimal' utilization of resources); (12 to 14); Each of the arguments in favor of cost allocation is examined in detail:
In this same vein, some suggest that concern for maintaining a favorable reputation leads to lower budgetary slack creation.
Budgetary slack is generally conceived as directly conflicting with the economic interests of a firm since it leads to less effort and results in inefficient distribution and utilization of the firm's resources (Van der Stede, 2000; Webb, 2002; Yuen, 2004).
Most major accounting textbooks contain examples of ethical dilemmas and guidelines for resolving them, and my colleagues mid spend significant class time discussing earnings management, budgetary slack client confidentiality, auditor independence, and other ethical issues.
It also gives more attention to such behavioral issues as the reduction of budgetary slack, employee motivation, and building a culture for learning and support.