Research On The Causes And Solutions Of Budgetary Slack Of H Company

Budget management is the budget arrangement made by an enterprise for its operation,investment and financial activities in a certain period.Budget management is a scientific management method and an important part of management accounting.Compared with western countries,the theoretical research and practice of budget management in China started relatively late,and there are still many imperfections in the theoretical research and practice.Budgetary slack is one of the most important management issues.H company has some experience in the implementation of comprehensive budget management.However,there is a problem of budgetray slack in the process of budget management.Budgetary slack not only damages H company's profits,but also affects its strategy's implementation and transformation.In order to play the real function of budget management tools maximumly,it is necessary to study the causes of budgetary slack of H company and propose corresponding solutions.This paper arranges the content of the research according to the logical clue of "research preparation--relevant theoretical analysis--case analysis--conclusions and suggestions" and uses the methods of literature research,field investigation and qualitative research to study the budgetary slack of H company.The main problems of budgetary slack of H company are as listed below.In the process of budget preparation,there are problems of budgetary slack by exaggerating or making up expenses,deliberately using inaccurate information and playing games between superior and subordinate.In the process of budget execution,business units deliberately control the pace of revenue recognition,surprise spending,and budget adjustments to create slack problems.In the process of budget evaluation,performance evaluation relies too much on the completion of budget,the evaluation index is not comprehensive enough,and the evaluation index ignores non-financial index.In terms of these questions,this paper analyzes the causes of budgetary slack from different perspectives such as Improving the budget management system,improving the information disclosure mechanism,adjusting the strategic objectives and budget objectives and improving the incentive system based on principal-agent theory,contingency theory and game theory.The main contribution of this paper is to put forward the analytical idea of "budget management system factors--manager behavior factors--corporate governance and institutional factors",and judgment method of the budgetary slack based on quantity and nature.After investigation and analysis,this paper finds that the budget management system is the direct cause of budgetary slack,formulated and implemented by the managers who are affected by the corporate governance structure.Therefore,this paper suggests that we should improve the budget management system,improve the information disclosure and mechanism,adjust the strategy and budget objectives and improve the incentive system.It is hoped that these analyses and Suggestions can provide ideas and inspirations for enterprises of the same industry or the same scale to meet the same problems.