IDEAS home Printed from https://ideas.repec.org/a/aes/amfeco/v24y2022i59p235.html

Factors With a Major Effect on the Budgetary Control Process – An Empirical Study From the Czech Republic

Author

Listed:
  • Jirí Dokulil

    (Tomas Bata University in Zlin, Czech Republic)

  • Boris Popesko

    (Tomas Bata University in Zlin, Czech Republic)

  • Katerina Kadalova

    (Tomas Bata University in Zlin, Czech Republic)

Abstract

Superlatives are commonplace in descriptions of traditional budgeting. Within managerial accounting techniques, it is one of the most frequently used, the most researched, but also the most criticized. While academics are largely united in criticism of traditional budgeting practices due to their inflexibility and consumption of resources, the existing studies have not identified universal assumptions to improve this system. The inconsistent conclusions in current literature create a need to explore approaches to mitigation of budgetary weaknesses. Furthermore, this incomplete knowledge is an impulse to examine factors influencing the choice of these approaches. The authors conducted a review of the literature to amass information on approaches developed to enhance traditional budgeting methods. Subsequently, research was conducted on the extent of utilization and the subjective perception of such methods at a sample of companies operating in the Czech Republic. The authors additionally attempted to determine which factors influenced the decisions of managers in selection of such a tool. A web-based survey was devised with the aim of gathering data, followed by analysis of correlation between selected variables through application of Pearson’s chi-square test. The literature review revealed the importance of conducting a budgetary review in improving the budgetary control. In total, 136 Czech companies took part in the survey, and it was discovered that a significant number of them had implemented traditional budgeting methods. More than 80% of respondents monitored any variation within their budgets. In the following part, the share of foreign capital was identified as the factor that influenced choices made in budgetary control. Since no correlation was discerned between revision of a budget and subsequent perception of its efficiency, the results lend support to arguments that minor improvements do not radically affect budgeting overall.

Suggested Citation

  • Jirí Dokulil & Boris Popesko & Katerina Kadalova, 2022. "Factors With a Major Effect on the Budgetary Control Process – An Empirical Study From the Czech Republic," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(59), pages 235-235.
    • Handle: RePEc:aes:amfeco:v:24:y:2022:i:59:p:235
    as

    Download full text from publisher

    File URL: http://www.amfiteatrueconomic.ro/temp/Article_3075.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:ehu:cuader:15776 is not listed on IDEAS
    2. Bo-Göran Ekholm & Jan Wallin, 2011. "The Impact of Uncertainty and Strategy on the Perceived Usefulness of Fixed and Flexible Budgets," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 38(1-2), pages 145-164, January.
    3. Jiri Dokulil & Boris Popesko & Jan Dvorsky, 2020. "The budgeting processes of Czech companies: the role of the ownership structure and foreign capital," Oeconomia Copernicana, Institute of Economic Research, vol. 11(4), pages 779-798, December.
    4. Bo-Goran Ekholm & Jan Wallin, 2000. "Is the annual budget really dead?," European Accounting Review, Taylor & Francis Journals, vol. 9(4), pages 519-539.
    5. Staci A. Kenno & Michelle C. Lau & Barbara J. Sainty, 2018. "In Search of a Theory of Budgeting: A Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(4), pages 507-553, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Per Ståle Knardal & Trond Bjørnenak, 2020. "Managerial characteristics and budget use in festival organizations," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(4), pages 379-402, December.
    2. Bhimani, Alnoor & Sivabalan, Prabhu & Soonawalla, Kazbi, 2018. "A study of the linkages between rolling budget forms, uncertainty and strategy," The British Accounting Review, Elsevier, vol. 50(3), pages 306-323.
    3. Zhang Tongtong & Yvonne Joseph Ason & Jamaliah Said & Nor Balkish Zakaria, 2024. "Enhancing Financial Resilience of Public Hospitals in China: A Dynamic Capability Approach to Addressing VUCA Challenges," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(10), pages 3284-3294, October.
    4. Rodríguez Rivero Edilberto J., 2013. "In which direction is budgeting moving? A report in large firms of Spain," Contaduría y Administración, Accounting and Management, vol. 58(4), pages 59-93, octubre-d.
    5. Prabhu Sivabalan & Peter Booth & Teemu Malmi & David A. Brown, 2009. "An exploratory study of operational reasons to budget," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(4), pages 849-871, December.
    6. Fukushima, Kazunori & Yamada, Akihiro, 2024. "Does budget target setting lead managers to engage in unethical behavior for the organization?," The British Accounting Review, Elsevier, vol. 56(4).
    7. Staci A. Kenno & Michelle C. Lau & Barbara J. Sainty, 2018. "In Search of a Theory of Budgeting: A Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(4), pages 507-553, December.
    8. Sèna John-Ahyee, 2012. "La stabilité des activités des contrôleurs de gestion est-elle paradoxale?," Post-Print hal-00690976, HAL.
    9. repec:dau:papers:123456789/1370 is not listed on IDEAS
    10. Nicolas Berland, 2004. "La gestion sans budget : évaluation de la pertinence des critiques et interprétation théorique," Revue Finance Contrôle Stratégie, revues.org, vol. 7(4), pages 37-58, December.
    11. Christophe Germain, 2005. "La Conception Des Systèmes De Contrôle De Gestion : Les Relations Entre Les Budgets Et Les Systemes De Mesure De La Performance," Post-Print halshs-00581198, HAL.
    12. Susan Haka & Ranjani Krishnan, 2005. "Budget Type and Performance — The Moderating Effect of Uncertainty," Australian Accounting Review, CPA Australia, vol. 15(35), pages 3-13, March.
    13. Chadi Joseph Khalifeh & Prabhu Sivabalan, 2014. "An Experimental Study on the Effect of Budget Information on Balanced Scorecard Preparer Individual Learning," Australian Accounting Review, CPA Australia, vol. 24(1), pages 39-52, March.
    14. Nicolas Berland, 2004. "La gestion sans budget : évaluation de la pertinence des critiques et interprétation théorique," Post-Print hal-01667157, HAL.
    15. Laura Broccardo & Elisa Giacosa & Francesca Culasso & Alberto Ferraris, 2016. "Budgeting process: an Italian survey in family and non-family firms," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 12(2/3), pages 157-174.
    16. Asogwa & Ikenna Elias & Etim & Osim Etim, 2017. "Traditional Budgeting in Today’s Business Environment," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 7(3), pages 1-7.
    17. Tiina Henttu-Aho, 2018. "The role of rolling forecasting in budgetary control systems: reactive and proactive types of planning," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(3), pages 327-360, December.
    18. Cassandra Seow-Ling Yee & Setsuo Otsuka & Kieran James & Jenny Kwai-Sim Leung, 2008. "Japanese culture and budgeting: A review of the literature and a limited pilot study to illustrate the research agenda," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(9), pages 873-899, October.
    19. Arnold, Markus C. & Artz, Martin, 2015. "Target difficulty, target flexibility, and firm performance: Evidence from business units’ targets," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 61-77.
    20. Mareike Bergmann & Christian Brück & Thorsten Knauer & Anja Schwering, 2020. "Digitization of the budgeting process: determinants of the use of business analytics and its effect on satisfaction with the budgeting process," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(1), pages 25-54, April.
    21. Christophe Germain, 2007. "L'Architecture Des Systemes De Controle De Gestion : Une Analyse Du Rapport Entre Les Budgets Et Les Systemes De Mesure De La Performance," Post-Print halshs-00534760, HAL.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aes:amfeco:v:24:y:2022:i:59:p:235. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valentin Dumitru (email available below). General contact details of provider: https://edirc.repec.org/data/aseeero.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.