Reflections on Individual Personal Values in the Budgetary Slack Phenomenon

Putu Yunartha Pradnyana Putra, Farah Nisa Ul Albab, Christopher Clark Aditya Swara


Abstract: Research and theory on the role of personal values in morality have received significant attention in the last years. In this study, we observe the tendency of individuals acting within organizations to create budgetary slack given their personal values and social reality. Specifically, we interview with the four undergraduate students in Accounting. We observe the ethical dilemma of the students as a representative of youth who ever involved in the budget-setting process. Recent studies in empathy-related responses to the individual ethical dilemma are also discussed. We find that all the participants have different responses to slack the budget after being pressured by their social environment. All the participants tend to create a budget slack by adding unexpected costs in their budgets. They use the "relativist" ideology and feel a sense of empathy towards the sustainability of their organization. However, the participants still prioritize their rationality over the social reality concerning the budgetary slack phenomena. The results suggest that personal values and social reality play a role in determining how individuals should react to the moral reasoning of budgetary slack.


Personal Values, Social Reality, Budgetary Slack, Ethical Dilemma

Full Text:



Adi, H. C., & Mardiasmo. (2002). Analisis Pengaruh Strategi Institusi, Budaya Institusi, dan Conflict of Interest terhadap Budgetary Slack. Jurnal Ekonomi dan Bisnis Indonesia, Vol.17, No.1, 105-113.

Arend, H. (2006). Eichmann in Jerusalem: A Report On The banality of Evil. London: Penguin Classics.

Benjamin, L., & Simpson, J. (2009). The power of the situation: The impact of Milgram's obedience studies on personality and social psychology. American Psychologist, 64(1), 12-19. doi:10.1037/a0014077

Burger, J. (2009). Replicating Milgram: Would people still obey today? American Psychologist, 64(1), 1-11. doi:10.1037/a0010932

Davis, S., DeZoort, F. T., & Kopp, L. S. (2006). The Effect of Obedience Pressure and Perceived Responsibility on Management Accountant's Creation of Budgetary Slack. Behavioral Research in Accounting, Vol.18, 19-35.

Deigh, J. (1995). Empathy and Universalizability. Ethics, Vol.105, No.4, 743-763.

Douglas, P. C., & Wier, B. (2000). Integrating Ethical Dimensions into a Model of Budgetary Slack Creation. Journal of Business Ethics, Vol.28, 267-277.

Dunk, A. S. (1993). The Effect of Budget Emphasis and Information Asymmetry on the Relation Between Budgetary Participation and Slack. The Accounting Review Vol. 68 No. 2, 400-410.

Dunk, A. S., & Nouri, H. (1998). Antecedents of Budgetary Slack: A Literature Review and Synthesis. Journal of Accounting Literature Vo. 17, 72-96.

Eisenberg, N. (2000). Emotion, Regulation, and Moral Development. Annual Review of Psychology, Vol.51, 665-697.

Forsyth, D. R. (1992). Judging the Morality of Business Practices: The Influence of Personal Moral Philosophies. Journal of Business Ethics, Vol.11, 461-470.

Glover, S. H., Bumpus, M. A., Logan, J. E., & Ciesla, J. R. (1997). Re-examining the Influence of Individual Values on Ethical Decision Making. Journal of Business Ethics, Vol.16, 1319-1329.

Hobson, J. L., Mellon, M. J., & Stevens, D. E. (2011). Determinants of Moral Judgements Regarding Budgetary Slack: An Experimental Examination of Pay Scheme and Personal Values. Behavioral Research in Accounting, Vol.23, No.1, 87-107.

Jones, T. M. (1991). Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model. The Academy of Management Review, Vol.16, No.2, 366-395.

Luft, J. L. (1997). Fairness, Ethics and the Effect of Management Accounting on Transaction Costs. Journal of Management Accounting Research, Vol.9, 199-216.

Maiga, A. S., & Jacobs, F. A. (2008). The Moderating Effect of Manager's Ethical Judgement On The Relationship Between Budget Participation and Budget Slack. Advances in Accounting, Vol.23, 113-145.

Milgram, S. (1963). Behavioral study of obedience. Journal of Abnormal and Social Psychology, 67(4), 371-378.

Miller, A. (2016). Why are the Milgram Obedience Experiments still so extraordinarily famous- and controversial? In A. Miller (Ed.), The Social Psychology of Good and Evil, Second Edition (pp. 185-223). New York: The Gulford Press.

Morgan, G. (2006). Images of Organization. California: Sage Publications.

Onsi, M. (1973). Factor Analysis of Behavioral Variables Affecting Budgetary Slack. The Accounting Review Vol. 48 No. 3, 535-548.

White, T. (2008, April 23). What did Hannah Arendt Really Mean By The Banality of Evil. Accessed from:

Whitfield, S. (1981). Hannah Arendt and the banality of evil. The History Teacher, 14(4), 469-477. Accessed from:

Young, S. M. (1985). Participative Budgeting: The Effects of Risk Aversion and Asymmetric Information on Budgetary Slack. Journal of Accounting Research, Vol.23, No.2, 829-842.



  • There are currently no refbacks.


The Indonesian Journal of Accounting Research (IJAR)

Sekretariat :

Editorial Secretariat

Master of Science and Doctoral Programs
Faculty of Economics and Business, Gadjah Mada University

Jl. Nusantara, Bulaksumur Yogyakarta 55281
Phone  : +62 85227764898
Fax    : +62 274 524606
Email  :

Marketing and Sales Office

Ikatan Akuntan Indonesia
Graha Akuntan, Jl. Sindanglaya No.1 Menteng, Jakarta Pusat 10310


ISSN 2086-6887 (Print)
ISSN 2655 - 1748 (online)


Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.