Budgetary Slack: An Empirical Analysis Based On The Flexible Budget And The Environmental Uncertainty

Budgetary slack is an opportunistic behavior of budgetary person in charge,which is one of the issues in budget management which commonly exist. Its existencealways lead to the failure of the budgetary management, which affect the performanceof management. The flexible budget is a method of budgetary preparation,which isbased on a variety of business volume level. It’s like a double edged sword, not onlyto better adapt to environmental changes, and help performance evaluation and costcontrol.But also when it is based different theoretical background the flexible useof,flexible budgets will also have some negative effects. And this paper,through theway the questionnaire, based on the basis of agency theory, theory of boundedrationality and the "economic man" hypothesis of human nature, in the big socialenvironment, study the relationship about the three variable which are flexiblebudget,budgetary slack and envionmental uncertainty. This study in this paperdemonstrate the following three assumptions,as follow:(1) the stronger the degree ofthe change of the external environment is, the more flexible budget should be adoptby companies;(2) The use of flexible budget would promote budgetary slack.(3)When the external environment changes, the effect of flexible budget having aninfluence on budgetary slack will be stronger.This article demonstrate the above three assumptions based on regressionanalysis, as collected data through questionnaires and use the Likert scaleanalysis.Therefore,while flexible budgeting preparation method be used, both needto consider how to take advantage of its benefits,and must also see the disadvantage.Sometimes a small problem that always and easily be overlooked, will bring about aheavy or even fatal blow for the development of enterprises Therefore, we should seea issue dialectically, rather than solely.