In Search of a Theory of Budgeting: A Literature Review

Abstract

Budgeting is synonymous with management accounting research but what is less synonymous is a cohesive or comprehensive theory of budgeting. As budgeting is used throughout all types of organizations and in many research articles, future budgeting research may benefit from a comprehensive review of the theories used by previous budgeting researchers in order to advance the discussion of the benefits and drawbacks of budgeting. This literature review highlights the major theories used in budgeting articles as well as the common variables used, causal model forms identified and use of budgeting in 251 articles. Though we find no cohesive theory of budgeting we identify the importance of a unified thought process to budgeting research and provide insights for future work in the area.

Keywords: Budgeting, Literature review, theory