Budget Reporting Research Articles

KEJUJURAN DALAM PELAPORAN ANGGARAN Dengan Pendekatan Kuasi Eksperimen

Abstract: 
 Business practices carried out by company owners sometimes set targets that are too high so that budget managers use any means to meet these targets. Budget managers tend to provide dishonest or semi-honest budget reports by using sources of budgetary slack by using the benefits of direct or indirect budgetary slack. This study tries to use the basic concept of measuring budgets using financial elements so that managers are more interested in committing fraud than the concept of measuring using non-financial ones. Furthermore, elements of participatory budgeting are included which allows dishonesty to occur in budget reporting due to information gaps between lower managers and company owners.
 This study aims to determine how the basic influence of budget measurement, the benefits of budgetary slack, and participatory budgeting with the dependent variable, namely the honesty of budget reporting with a quasi-experimental method. This study was attended by 120 undergraduate accounting student participants who were divided into 4 experimental groups (2x2).
 The results of this study show that the basis for measuring the budget, the benefits of budgetary slack, and participatory budgeting have a significant effect on the honesty of budget reporting.
 
 Keywords: Financial and Non-Financial Measurement, Benefits of Budgetary Slack, Honesty in Financial Reporting.

The Behavioral Effects of Social Distance and Residual Claim Distribution on Budget Reporting in Hierarchical Organizations

ABSTRACT We experimentally investigate how subordinates’ budget reporting in hierarchical organizations is influenced by social distance between subordinates and their direct manager. Although prior research promotes reducing this social distance to improve cooperation and efficiency, we contend that reduced social distance can differentially influence budget reporting, conditional on the manager’s stake in the residual claim. As predicted, we find through two studies that the effect of reduced social distance changes from increasing subordinates’ honesty to decreasing subordinates’ honesty as the manager’s stake in the residual claim decreases. We also find that subordinates’ concern for the manager’s economic well-being and concern about the manager’s impression of their reporting behavior mediate these results. The implications of our findings for management accounting theory and practice are discussed. Data Availability: Please contact the authors. JEL Classifications: C91; D91; M41.

Moderating effects of Machiavellianism, management control, and fairness on a motivation-honesty relationship in budget reporting

Existing research on the influence of motivation on an honest budget has overlooked the roles of certain dark personality traits, management control, and perceived fairness. This study aims to explore the moderating role of Machiavellianism, management control, and fairness in the relationship between internal and external motivation and honest budget reports. This paper comprised two experiments that evaluated the main effect of motivation and moderator effects of the above factors. The first experiment involved 72 graduate students from various Indonesian universities studying accounting or financial management, and the second experiment included 261 undergraduate students from similar fields. Participants were divided into internal and external motivation groups, further randomized into fairness and management control groups, creating eight distinct groups. Each group received a specific scenario corresponding to their allocated group. The results demonstrated that internal motivation had a stronger influence on honest reporting than external motivation (F (1, 257) = 60.36, p < 0.001). However, Machiavellianism weakened this relationship (F (3, 257) = 6.24, p < 0.05). Under complete management control and perceived fairness scenarios, individuals driven by internal motivation reported budget more honestly compared to those with external motivation group under basic management control and perceived unfairness scenarios (F (4, 253) = 4.95, p < 0.001). This analysis contributes to understanding honest budget reports by distinguishing between internal and external motivations and recognizing the moderating roles of Machiavellianism, management control, and fairness. These insights could help organizations design effective budgeting systems and control mechanisms to reduce budgetary slack and improve performance.

The usefulness of reporting information on the commitment of budget expenditures in the light of local government units

Purpose: The budget reporting system plays an important role in reporting the achievements of local government units regarding how these entities communicate with the environment and various stakeholder groups. The main purpose of the study is to assess the usefulness of reporting information on budget expenditures by selected local government units. The authors were interested in the importance of budget expendi-ture commitments, their functions, and whether the commitment of budget expendi-tures should be presented in the reporting system of local government units.Methodology/approach: The article contains a review of the literature on the subject and legal acts. In the empirical part, the study covers annual budget reports RB-28S from the implementation of the financial plan of budgetary expenditures for the years 20192021 of local government units. r-Pearsons linear correlation analysis was used. Findings: Statistical inference confirmed the low relevance of the expenditure commitment category in budget reporting. A very strong positive correlation with realized expenditures shows that showing the involvement of expenditures next to the incurred expenditures only doubles the value of expenditures. Research limitations/implications: The article may be an inspiration for further research, including comparative research, on the same units or extended to other local government units. Originality/value: The authors draw attention to the lack of research on the usefulness of financial data presented in the budget reporting system.

Pengelolaan Anggaran dan Perangkat Daerah Sekretariat DPRD Kota Padang Sidimpuan

This study aims to determine the Effectiveness of Financial Management in the Secretariat Office of the Padang Sidimpuan District Representative Office which is carried out by the Administration and Secretariat Section of the Financial Management Subdivision regarding Financial Management Effectiveness which includes Budget Planning, Budget Implementation, Budget Reporting and Budgeting. This research uses the method of Financial Management. qualitative. The research informants consisted of the Secretary of the Regional House of Representatives, the Head of Administration and Secretariat, the Head of Sub-Planning and Finance, the Spending Treasurer, and the Planning and Finance Section Staff with a total of 5 informants, the data source consisted of primary and secondary data obtained from collection techniques. data by observing, interviewing, and documenting. The results of the study show that the effectiveness of financial management at the Secretariat of the Regional Representative Council of Padang Sidimpuan Regency is quite good and systematic. improvement of facilities and infrastructure so that tasks can be achieved.
 Keywords: analysis, effectiveness, management, finance, budget

The Behavioral Effects of Remote Work on Budget Reporting under Managers’ Approval Authority in Hierarchical Organizations

The Behavioral Effects of Remote Work on Budget Reporting under Managers’ Approval Authority in Hierarchical Organizations

Budget quality and the need for risk management

The preparation of transparent budget documents requires politicians to explain complex concepts to a wide range of audiences. This gives tangible benefits. Clear and transparent budget documents can enhance the impact of policy, budget planning, legislative oversight and citizen participation. Such reports allow policy makers to send signals about emerging economic and fiscal trends, helping shape public debate and anticipating future responses. An open budget that takes into account economic and fiscal realities in an understandable form promotes accountability and effective budget planning. This allows civil society organizations to interact with the budget. This, in turn, strengthens the social contract between citizens and the state. Certainly, clear writing not only aids relevant authorities in honing their budget strategy and policy thinking but also contributes to improved and more coherent policy decisions. The primary objectives of this research encompass an examination of how attributes like transparency, assessment, and goal accuracy in budget reporting influence budget efficiency. Additionally, the study explores the influence of risk management as a constraining factor on the correlation between budget characteristics and the resulting budget reports. In practical terms, the findings of this investigation aim to enhance the effectiveness of entities involved in the planning and execution phases, thereby contributing to overall operational improvement.

Pengelolaan Anggaran dan Perangkat Daerah Sekretariat DPRD Kota Padang Sidempuan


 This study aims to determine the Effectiveness of Financial Management in the Secretariat Office of the Padang Sidimpuan District Representative Office which is carried out by the Administration and Secretariat Section of the Financial Management Subdivision regarding Financial Management Effectiveness which includes Budget Planning, Budget Implementation, Budget Reporting and Budgeting. This research uses the method of Financial Management. qualitative. The research informants consisted of the Secretary of the Regional House of Representatives, the Head of Administration and Secretariat, the Head of Sub-Planning and Finance, the Spending Treasurer, and the Planning and Finance Section Staff with a total of 5 informants, the data source consisted of primary and secondary data obtained from collection techniques. data by observing, interviewing, and documenting. The results of the study show that the effectiveness of financial management at the Secretariat of the Regional Representative Council of Padang Sidimpuan Regency is quite good and systematic. improvement of facilities and infrastructure so that tasks can be achieved.
 Keywords: analysis, effectiveness, management, finance, budget

Nieprzestrzeganie obowiązków w zakresie sprawozdawczości budżetowej w jednostce samorządu terytorialnego a odpowiedzialność z tytułu naruszenia dyscypliny finansów publicznych

The article analyses in detail budgetary reporting obligations in local government units. This analysis allowed to capture the essence of preparing budget reports. As it turns out, the legality of preparation of the report and the promptness of delivery to the appropriate entity are closely related to the public finance discipline. Non-compliance with budgetary reporting obligations or an omission in this respect may lead to a breach of the public finance discipline. Many reservations are caused not so much by the severity of penalties imposed for such violations, but by the functioning of the current budget reporting system.

Do Budget Stabilization Funds Invite Transparent Budget Reporting? Budget Stabilization Funds and Fiscal Behavior of States

Do Budget Stabilization Funds Invite Transparent Budget Reporting? Budget Stabilization Funds and Fiscal Behavior of States

The effects of measurement basis and slack benefits on honesty in budget reporting

In this study, we experimentally investigate how managers' budget reporting behavior is influenced by two important features of the budgeting system: the measurement basis used in budget preparation (i.e., whether managers make budget reports in financial or nonfinancial measures) and managers' slack benefits in budget execution (i.e., whether managers benefit from budgetary slack directly or through an intermediate activity). While prior research suggests that moral self-regulation helps promote honest behavior, we predict that a financial measurement basis undermines moral self-regulation by strengthening the manager's desire to advance self-interest and that the absence of direct slack benefits undermines moral self-regulation by making misreporting more justifiable. We also predict that the effects of these two budgetary features on honesty are non-additive, due to the manager's diminishing marginal net utility from misreporting. Experimental results are consistent with our predictions. The implications of our findings for management accounting theory and practice are discussed.

Zawartość informacyjna sprawozdań finansowych jednostek sektora finansów publicznych

In the majority of countries, the finance sector constitutes one of the most important parts of the economy. Public finance sector units often raise funds and spend them on non-profitable activities, however essential they may be for the proper functioning of society. The cash participating in these operations make up a significant share of the transfers of a country’s entire economy. Thus, public finance sector units are required to keep books of account based on the provisions of the Accounting Act and specific legislation adapted to the specificities of the public finance sector. One of the obligations laid down by the Accounting Act is to present financial and property standing in the form of financial statements. As far as public finance sector units are concerned, the obligation has been extended to include preparation of budget reports, the main aim of which is to present a unit’s current situation with respect to its budget revenues and expenditures. The budget reporting system is currently used in the financial management of public finance sector units mainly in the short term. Financial statements, which may be the subject of financial analysis and support long-term decision making, have rarely been used. The paper presents financial reporting of public finance sector units, the possibilities of using the International Public Sector Accounting Standards (IPSAS) in accounting, and certain aspects of financial analysis and its use.

Discussion of: The Effect of Injunctive Social Norms and Dissent on Budget Reporting Honesty

Discussion of: The Effect of Injunctive Social Norms and Dissent on Budget Reporting Honesty

The Effect of Injunctive Social Norms and Dissent on Budget Reporting Honesty

ABSTRACTResearch in budgeting suggests that contextual factors may have a considerable influence on budget reporting honesty. Therefore, the present study investigates managers' honesty in the presence of different social norms. While there are several studies that look at the impact of descriptive social norms (what one actually does) on managerial honesty, injunctive social norms (what one ought to do) have not received a lot of attention in the literature. As concrete actions of peers are rarely observable in the budgeting process, this study focuses on the effect of injunctive norms for honesty/opportunism on budget reporting honesty. Moreover, the role of dissenters from the norm is investigated. The results from a laboratory experiment suggest that injunctive norms can have a considerable influence on managers' budget reporting behavior because many people conform to the preferences of their peer group. However, the effect of injunctive norms decreases substantially when there are minorities that show alternative preferences. With the use of the experimental data, the expected firm profit is calculated under different contracts. As the managers show considerable levels of honesty, a trust contract should be preferred compared to a hurdle contract, which is derived from conventional economic theory. Companies should therefore consider injunctive norms as a possible device to positively affect their managers' honesty and the respective firm profit.

Do Social Controls Lead to More or Less Honesty in a Budget Reporting Setting?

Abstract We examine the effect of peer honesty on focal manager honesty in a budget reporting setting. We disclose peer honesty to the focal manager at three levels: no, partial, and full disclosure of the reporting behavior of the other managers in the focal managers’ cohort. In partial disclosure, only the reports of the least honest peers are disclosed to the focal manager. In full disclosure, all managers’ reports in the cohort are disclosed to the focal manager. We predict and find that disclosure of other managers’ reports leads to less honesty compared to the absence of disclosure. We show that disclosure changes the focal manager’s perceptions of what constitutes acceptable reporting behavior, such that reporting more dishonestly becomes more acceptable. Our results have implications for understanding fraud dynamics and have practical implications for the design of control systems, as they suggest that managers will use peer dishonesty to justify their own dishonesty, even when they know that only some of their peers report dishonestly.

Do Troubled Times Invite Cloudy Budget Reporting? The Determinants of General Fund Expenditure Share in U.S. States

Fiscal controls require monitoring and transparent reporting. Financial documents with multiple funds, transfers, and inconsistent year‐to‐year categorization of revenues and expenditures provide opportunities to obscure a negative fiscal picture. We hypothesize that fiscal stress increases obfuscation. We investigate the relationship between the share of total governmental expenditures in U.S. states' general funds and independent variables drawn from the literature. Consistent with our hypothesis, deficit and debt are the most important explanatory variables. A one standard deviation increase in the deficit as a share of total expenditures is predicted to decrease the general fund share by one percentage point.

Role and Impact of Budget as an Instrument of Financial and Developmental Policy in Kosovo

In this research paper will be presented a detailed description of the methodology for analysis the budget and the improving connections, and budget planning for the provision of financial and developmental policies in Kosovo. This paper has been written intelligibly, so that could be read and easily understood by non-specialists of field of economics and finance. State budget is one of the most important economic instruments, to have Government of Kosovo in available. Drafting and spending the budget Kosovo has been the competence of local institutions since the establishment of the Provisional Institutions. However, even after more than a decade from the time when local institutions have enjoyed the right to drafting the costs of the state budget, there are major problems in drafting procedures, expenditure and budget reporting. Kosovo budget in some cases is approved hastily and without debate in the Assembly of Kosovo. The current form of appropriations and budget reports is not at that level of detail as to enable the members of the Assembly and citizens understand clearly the way of divisions and expenditure of public money. DOI: 10.5901/mjss.2015.v4n1s1p61

The effect of rankings on honesty in budget reporting

We conduct an experiment to investigate the effect of rankings, which are pervasive in practice, on the honesty of managers’ budget reports, which is important for sound decision making in organizations. Participants in our experiment are ranked in one of four ways: (1) firm profit, (2) own compensation, (3) both firm profit and own compensation, and (4) randomly, which serves as our baseline condition. None of the rankings affect participants’ remuneration. Compared to our baseline (random rankings) setting, where participants indeed exhibit honesty concerns, we find that rankings based on firm profit significantly increase honesty and that rankings based on own compensation significantly decrease honesty. Participants who received both rankings were significantly more honest than participants in the own compensation rankings condition. We did not, however, find significant differences in honesty between the both rankings and firm profit rankings conditions. As such, participants in the both rankings condition seemed to focus more on the firm profit metric than on the financially congruent own compensation metric. We also find that our results are stable across periods, suggesting that the effects of rankings neither increased nor dissipated over time. We discuss the contributions of our study and concomitant findings to accounting research and practice.

Shared interest and honesty in budget reporting

This study uses two experiments to investigate the honesty of managers’ budget reports when the financial benefit resulting from budgetary slack is shared by the manager and other non-reporting employees. Drawing on moral disengagement theory, we predict that the shared interest in slack creation makes misreporting more self-justifiable to the manager and, therefore, leads to lower honesty. Consistent with our prediction, the results of our first experiment show that managers report less honestly when the benefit of slack is shared than when it is not shared, regardless of whether others are aware of the misreporting. Our second experiment investigates whether the preferences of the beneficiaries of the slack affect managers’ honesty. We predict that managers’ honesty will be improved when the beneficiaries of the slack have a known, higher-order preference for truthful reporting. Consistent with our prediction, the results show that managers report more honestly when other employees have a known preference for honesty than otherwise. The implications of our findings for management accounting research and practice are discussed.

Nível de disclosure do orçamento público federal brasileiro

The budget reflects the financial signs of the government plans for a future period. That is for its check and demonstration are essential for a good public administration. Therefore, make its data publicly available exalt the disclosure of government plans, increasing control, planning and, most important, allowing citizens to inspect the public administrators actions. In this context, the purpose of this article is to examine the Disclosure level of Brazilian Federal Public Budget compared with the results of the survey Practices and Procedures on Budget Reporting, produced by OECD/World Bank. To keep the goal, the research developed in 2003, which was answered by 41 countries, is compared with the same research applied in Brazil. To enhance answers analysis, was made a descriptive statistic and the countries were classified according to the disclosure level. Considering the research results, it can be concluded that Brazil has the best level of disclosure, close to Slovakia, among all countries which answered the research, according to the data indicated on the OECD/World Bank research and approved by IFAC.