Budgetary 2004). A further review of literature

Budgetary control is a management system in which actual income and spending are compared   planned income and spending in order to see if plans are being followed and plan need to be changed in order to make profits. It is to set financial, performance goals with the budgets and to compare with the actual results. Budgetary Control is important for an organization to maximize profits and control costs. It is to help their employee to achieve their goals and target in the organization and to coordinates activities across department and translate strategic plans into action. For example resources, revenues, and activities required to carry out the strategic plan for the coming year. Besides budgeting control is to improve resources allocation because all requests are verified, clarified and justified. In other words, it provides an excellent record of organizational activities. Budgets aslo used for operational planning, performance evaluation, communicating and coordinating, forecasting and strategy formulation (Berry et al., 2005; Hansen and Van der Stede, 2004). A further review of literature on budgeting e.g., (Amey, 1979; Bremser, 1988; Douglas, 1994) reveals that budgets serve two purposes of planning and control. (Flamholtz 1983) First is to developed a mechanism for effective planning and control aspects of budgets. This study by also supported this two role of budgeting. Moreover, (Hopwood 1972), and (Abernethy and Stoelwinder, 1991) argue that budgets can be used as a control mechanism to regulate the behavior by specifying the means to produce a unit of output. According to Bruns and Waterhouse (1975), budget can be defined as financial plans to  provide the basis for directing and evaluating the performance of individuals or segments of organizations. Several studies consider the budget as a key to the success of the many profitable companies (Burrow et al., 2008; Horngren et al., 2012). According to Elhamma (2011), ” Some studies have been conducted to understand the impact of the budgetary control on the firm’s’ performance. However, the explanation of its variety is less studied” (Hartmann, 2000). However, relatively few have been conducted in the developing countries such as Morocco, for example (Elhamma and Taouab, 2015). Generally, the empirical studies result in conflicting results. Hopwood (1972) found that a rigid budgetary control (emphasis on targets) is associated with dysfunctional behaviours. But, Otley (1978) did not find such association. He found that a high emphasis placed on meeting the budget led to budgets being more closely met. Subsequent several studies influenced by these two researches have tried to further specify the Reliance on Accounting Performance Measures  Model, linking the budgetary evaluation style to subordinate attitudes and behaviours by examining the effect of contingency factors (Govindarajan, 1984; Govindarajan and Gupta, 1985; Merchant, 1981).

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