A Review of Factors Affecting on Managers Budgetary Bias

Document Type : Research Paper

Authors

1 MSC.of Management Accounting,Ferdowsi university Of Mashhad,Mashhad<Iran<darvishi.milad@um.ac.ir

2 department of accounting, faculty of Economics &amp; Administrative Sciences, ferdowsi university of mashhad, mashhad, iran

3 department of accounting, Faculty of Economics &amp; Administrative Sciences, ferdowsi university of mashhad, mashhad, iran

Abstract

 Subsequent to the failure of companies such as Global Crossings, the importance of ethical behavior has again resurfaced in the business community and society in general. Since the budgetary bias is known as an unethical problem and the result of managers' undesirable behaviors to achieving specific goals, the purpose of this research is to increase the insight in the field of budgetary bias in organizations. This research consists of a theoretical elaboration of a coherent framework for describing the managers' budgetary bias and investigating the impact of various factors on it. Therefore, an empirical test was done to investigate the effect of four factors, including personal goals, organizational factors, organizational power, and situational influences on budgetary bias, through the data of 101 companies listed in the Tehran Stock Exchange during the years 2012 to 2016. The results showed that organizational factors and situational influences have the most significant role in motivating managers to create budgetary bias.
  1- Introduction
Subsequent to the failure of companies such as Global Crossings, the importance of ethical behavior has again resurfaced in the business community and society in general. Since the budgetary bias is known as an unethical problem, the purpose of this research is to increase the insight in the field of budgetary bias in organizations.
  2- Hypothesis
Research hypothesis is developed as follows:
H1. Job security has a significant effect on budgetary bias.
H2. Compensation has a significant effect on budgetary bias.
H3. Authority has a significant effect on budgetary bias.
H4. The influence of the CEO has a significant effect on budgetary bias.
H5. The influence of the chairman of the board has a significant effect on budgetary bias.
H6. Profitability has a significant effect on budgetary bias.
H7. Uncertainty has a significant effect on budgetary bias.
  3- Methods
To test the hypothesis, we use one of managers' budgetary reports, namely earning per share (EPS), and a sample of 101 companies from the accepted ones in the Tehran Securities Exchange during the years 1391 to 1395.
  4- Results
 The results showed that among various factors, the organizational factors and situational influences have the most effect on budgetary bias.
  5- Discussion and Conclusion
The purpose of this research was to investigate the impact of various factors on budgetary bias. Results recommend that users of company budget reports should consider the organizational power of managers and uncertainty in validating the reports of managers.
 

 


 

Keywords

References

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Journal of Accounting Advances
Volume 11, Issue 2 - Serial Number 79
December 2019
Pages 117-150

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History

  • Receive Date: 29 December 2018
  • Revise Date: 14 December 2019
  • Accept Date: 14 December 2019

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