Journal of Management Control

, Volume 29, Issue 2, pp 115–159 | Cite as

Honesty in budgeting: a review of morality and control aspects in the budgetary slack literature

  • Christian DaumoserEmail author
  • Bernhard Hirsch
  • Matthias Sohn
Original Paper


Budgetary slack is a heavily researched topic in the field of management accounting, but the heterogeneous nature of prior research blurs our understanding of this important topic. In this paper, we provide a structured overview of research on budgetary slack published in top-tier accounting and business ethics journals and reach the following conclusions: Participative budgeting can create or reduce budgetary slack. Less slack is created under truth-inducing pay schemes compared to slack-inducing schemes. Additionally, slack creation is affected by budget users’ risk attitudes and information asymmetry. Information asymmetry increases budgetary slack, but that effect is influenced by multiple factors, including budgetary participation and information systems. Fairness and reputation concerns decrease budgetary slack, but ethics concerns do not. Finally, the analysis revealed that social norms decrease slack and peer influence moderates the effect. We show that research in this field focuses mainly on psychological perspectives to analyse individuals’ budget-related behaviour. Experimental research was determined to be the most frequently used research method. An analysis of current experiments shows growing numbers of investigations of budgetary slack as a proxy of honesty in managerial reporting.


Honesty Budgeting Budgetary slack Managerial reporting 

JEL Classification



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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.ESCP EuropeBerlinGermany
  2. 2.Bundeswehr University MunichNeubibergGermany
  3. 3.Zeppelin UniversityFriedrichshafenGermany

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