Original Research Article | OPEN ACCESS
BUDGET PARTICIPATION, MANAGERIAL PERFORMANCE AND BUDGETARY SLACK: THE INTERVENING ROLE OF BUDGET PRESSURE AND MONITORING

J I Otalor, PhD , P A Oti, PhD, Ofuan James Ilaboya1 , Timothy OnechojonUsman2 ,

Department of Accounting, University of Calabar, P. M. B 1115, Calabar, Cross-River State, Nigeria. ORCID: 0000-0002-1029-6947;

For correspondence:-  J Otalor, PhD   Email: john.otalor@gmail.com

Received: 30 Oct 2017        Accepted: 4 Dec 2017        Published: 31 Dec 2017

Citation: Otalor, PhD JI, Oti, PhD PA, Ilaboya OJ, OnechojonUsman T, BUDGET PARTICIPATION, MANAGERIAL PERFORMANCE AND BUDGETARY SLACK: THE INTERVENING ROLE OF BUDGET PRESSURE AND MONITORING. Account Tax Rev 2017; 1(1):9-37 doi:

© 2017 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..

Abstract

The study seeks to ascertain the role budget pressure and monitoring plays in the relationship between budget participation, managerial performance and budgetary slack. The study used data collected through questionnaire administered on 247 employees of the 177 firms listed on the floor of the Nigerian Stock Exchange as June, 2016. The test items were analysed using factor analysis and the specified models were estimated using the ordered logit and probit regression technique through computer software IBM SPSS 23.0 and E-view 9.5. The study finds a significant negative relationship between budgetary slack and managerial performance. Moreover, the study finds a significant positive relationship between organisational commitment and managerial performance. The study also finds that budget participation alone tends to reduce managerial performance as a result of budgetary slack creation but when employees and subordinate managers are closely monitored at the time of preparing the budget, budget participation tends to improve managerial performance. Thus, the study concludes that there is an indirect positive relation between budget participation and managerial performance through the intervening role of budget pressure and monitoring.

JEL Classification: G310

Keywords: Budget participation, managerial performance, budgetary slack, budget pressure and monitoring.


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