• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
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HOME > Archive > 2015 > Volume 3 Number 2 (Feb. 2015) >
JOEBM 2015 Vol.3(2): 244-251 ISSN: 2301-3567
DOI: 10.7763/JOEBM.2015.V3.188

The Measurements of Budgetary Slack: The Empirical Evidence of Listed Companies in Thailand

Pornpan Damrongsukniwat, Danuja Kunpanitchakit, and Supol Durongwatana

Abstract—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.

Index Terms—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: o_nong@hotmail.com).
S. Durongwatana is with the Department of Statistics, Faculty of Commerce and Accountancy, Chulalongkorn University, Bangkok, Thailand.

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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.

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