The Role of Pay Scheme and Ethics Level for Decreasing Budgetary Slack: Experiment Setting

DOI

10.2991/apbec-18.2019.9How to use a DOI?

Keywords

Budgetary slack, payment scheme, ethics

Abstract

Budgeting is an important tool for evaluating a manager’s performance. Unfortunately, budgets are susceptible to budgetary slack, in which a manager provides an overly pessimistic and conservative estimation of income and expenses. This study aims to investigate the effect of pay scheme and ethics level on budgetary slack creation. Hypotheses were tested using experiments with 2x2 factorial designs. The participants of this study were students who had completed a managerial accounting course. The main interaction effects were analyzed using a general linear model univariate. The results show that pay scheme plays a significant role in decreasing budgetary slack. Participants who scored high on the DIT instrument were more likely to create budgetary slacks than were low-scoring participants. This finding also shows that there is a significant impact of interaction between payment scheme and ethics level on budgetary slack.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Agus Munandar
AU  - Elvia R. Shauki
AU  - Vera Diyanty
PY  - 2019/07
DA  - 2019/07
TI  - The Role of Pay Scheme and Ethics Level for Decreasing Budgetary Slack: Experiment Setting
BT  - Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018)
PB  - Atlantis Press
SP  - 57
EP  - 62
SN  - 2352-5428
UR  - https://doi.org/10.2991/apbec-18.2019.9
DO  - 10.2991/apbec-18.2019.9
ID  - Munandar2019/07
ER  -