—This study introduces an objective measurement of
budgetary slack based on ex post
measure of firm’s annual
budget achievability with the exclusion of earnings management
through discretionary accruals rather than the traditional
subjective measurement based on management’s perceptions.
Also, this study empirically examines the association between
budgetary slack and its determinants under various budgetary
slack measurements. This study uses data from survey
questionnaires and data from the annual financial statements
for the year ended 2009 of listed non-financial and
non-rehabilitation companies in Thailand. The population
covers 387 firms and there are 38 returned and usable
questionnaires which is 10% response rate. Although the
objective measurement of budgetary slack is statistically found
to be positively related to the traditional subjective
measurement, the suggested objective measurement is
considered to be a superior one. Moreover, the association
between budgetary slack and its determinants is relatively
sensitive to the measurements of budgetary slack.
—Budget achievability, budgetary slack,
discretionary accruals, earnings management.
P. Damrongsukniwat and D. Kunpanitchakit are with the Department of
Accounting, Faculty of Business Administration, Kasetsart University,
Bangkok, Thailand (e-mail: email@example.com).
S. Durongwatana is with the Department of Statistics, Faculty of
Commerce and Accountancy, Chulalongkorn University, Bangkok,
Cite: Pornpan Damrongsukniwat, Danuja Kunpanitchakit, and Supol Durongwatana, "The Measurements of Budgetary Slack: The Empirical
Evidence of Listed Companies in Thailand," Journal of Economics, Business and Management vol. 3, no. 2, pp. 244-251, 2015.