Budget Slack of Responsibility Centers: A New Approach of Evaluation

9 Pages Posted: 12 Nov 2012

See all articles by Peter Dehong Wang

Peter Dehong Wang

Beijing Foreign Studies University

Jianbo Song

affiliation not provided to SSRN

Date Written: March 30, 2012

Abstract

Budget slack is one of the unresolved issues in management accounting theory. When studying the budget slack of firm’s responsibility centers, this paper uses a unique perspective of the transfer values of firm’s responsibility centers, has an empirical finding that transfer value mechanism could help evaluate the budget slack of firm’s responsibility centers, and then develops a two-step approach for the evaluation. This result reveals an interesting tie between budget slack and transfer values, and could greatly help firms improve the budget management of their responsibility centers.

Keywords: budget slack, transfer value, operation efficiency

JEL Classification: M41, H61, M49

Suggested Citation

Wang, Dehong and Song, Jianbo, Budget Slack of Responsibility Centers: A New Approach of Evaluation (March 30, 2012). Available at SSRN: https://ssrn.com/abstract=2173732 or http://dx.doi.org/10.2139/ssrn.2173732

Dehong Wang (Contact Author)

Beijing Foreign Studies University ( email )

No.19 North Xisanhuan Avenue, Haidian District
Beijing, Beijing 100089
China

Jianbo Song

affiliation not provided to SSRN

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