THE EFFECT OF PARTICIPATIVE BUDGETARY, ASSYMETRIC INFORMATION, PRESSURE-HANDLING, AND ORGANIZATIONAL COMMINTMENT ON THE BUDGETARY SLACK - Eprints UPN "Veteran" Yogyakarta

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Internatipnai Journal of

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Volume 14

Number 11

2016

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1 s v\ S PL

BIJCATIONS

PVX LTD.

Editorial Board

Editor in Chief

Ding Haoyuan

Shanghai University of finance of

Economics,

Shanghai, China

Email:

ding.haoyuan@mail.shufe.edu.cn

Managing Editor

Vijay Kumar Jha

Serials Publications Pvt. Ltd.

New Delhi

Editorial Board Members

XIE Wenjing

Department of Economics,

Baptist University of Hong Kong,

Kowloon Tong,

Hong Kong, China.

HU Yichuan

Department of Economics,

The Chinese University of Hong Kong,

Shatin,

Hong Kong, China.

YANG Yixin

Department of Economics

The Chinese University of Hong Kong,

Shatin,

Hong Kong, China

XU Xinyi

Department of Economics,

The Chinese University of Hong Kong,

Shatin,

Hong Kong, China

Liu Ziyuan

Ph.D candidate in Department of World

Economy,

School of International Business and

Administration

Shanghai U of finance and Economics,

China

Yi Guanxi

UCLA Anderson Business School

110 Westwood Plaza. Suite C-310

Los Angeles,

Wang Danli Wang

Chinese University of Hong Kong

HYS 509, Shatin, N.T.,

Hong Kong, China

Prof. N. Narayana

Department of Economics,

University of Botswana,

Private Bag UB 705,

Gaborone,

BOTSWANA

Dr. Teena Bagga

2

LIST OF ARTICLES

No

Presenter

Article

Page

1

Majdi Anwar Quttainah THE EFFECTS OF ORGANIZATION TRUST AND

JOY ON ORGANIZATIONS’ STRATEGIC

BEHAVIOR

7361-7385

2

Dusadee Ayuwat, Wanichcha

Narongchai and Nattawat Auraiampai

FACTORS INFLUENCING ENGAGEMENT OF EMPLOYEES TOWARDS PHOENIX PULP AND PAPER PUBLIC CO., LTD.

7387-7396

3

Doli M Ja’far Dalimunthe, Fadli

and Iskandar Muda

THE APPLICATION OF PERFORMANCE MEASUREMENT SYSTEM MODEL USING MALCOLM BALDRIGE MODEL (MBM) TO SUPPORT CIVIL STATE APPARATUS LAW (ASN) NUMBER 5 OF 2014 IN INDONESIA

7397-7407

4

Isfenti Sadalia and Syahyunan

FINANCIAL MANAGEMENT BEHAVIOR AND

FINANCIAL DISTRESS ON SMALL MEDIUM ENTERPRISE IN INDONESIA

7409-7416

5

Nurzaimah, Rasdianto and

Iskandar Muda

THE SKILLS AND UNDERSTANDING OF RURAL ENTERPRISE MANAGEMENT OF THE PREPARATION OF FINANCIAL STATEMENTS USING FINANCIAL ACCOUNTING STANDARDS (IFRS) FINANCIAL STATEMENT ON THE ENTITIES WITHOUT PUBLIC ACCOUNTABILITY (ETAP) FRAMEWORK ON THE IMPLEMENTATION OF VILLAGE ADMINISTRATION LAW

7417-7429

6

Diah Setyawati Dewanti,

Dusadee Ayuwat, and Sekson Yongvanit

VOLCANIC DISASTER MANAGEMENT PRACTICES FOR PEOPLE WHO LIVED IN DISASTER PRONE II

7431-7450

7

Hapzi Ali, Mukhtar and Sofwan WORK ETHOS AND EFFECTIVENESS OF

MANAGEMENT TRANSFORMATIVE LEADERSHIP BOARDING SCHOOL IN THE JAMBI PROVINCE

7451-7471

8

Dwinita Laksmidewi and

Edward Giovandru

ANTHROPOMORPHIC ANIMALS IN ADVERTISING: CREATING POSITIVE

CONSUMER’S BRAND ATTITUDE

9

Himanshu B. Rout, P. K.

Mishra and B. B. Pradhan

NEXUS BETWEEN TOURISM AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM

3

ODISHA, INDIA

10

Chuanchen BI, Sekson

Yongvanit and Warangkana Thawornwiriyatrakul

NEW TRENDS OF MASS TOURISM MANAGEMENT IN PR. CHINA, CASE STUDY OF XISHUANGBANNA DAI AUTONOMOUS PREFECTURE

7515-7536

11

Lies Sulistyowati and Ronnie

S. Natawidjaja

COMMERCIALIZATION DETERMINANT OF MANGO FARMERS IN WEST JAVA- INDONESIA

7537-7557

12

Indra Sakti Harahap, Ritha F

Dalimunthe, Prihatin

Lumbanraja and Yenni Absah

THE ANTECEDENTS OF JOB SATISFACTION AND ORGANIZATIONAL COMMITMENT AND THE EFFECTS ON THE PERFORMANCES OF CIVIL SERVANTS (PNS) IN PROVINCIAL GOVERNMENT OF NORTH SUMATERA-INDONESIA

7559-7573

13

Arifin Lubis, Zainul Bahri

Torong and Iskandar Muda

THE URGENCY OF IMPLEMENTING BALANCED SCORECARD SYSTEM ON LOCAL GOVERNMENT IN NORTH SUMATRA –

INDONESIA

7575-7590

14

Ade Fatma Lubis, Tapi

Andasari Lubis and Iskandar Muda

THE ROLE OF ENTERPRISE RESOURCE PLAN (ERP) CONFIGURATION TO THE TIMELINESS OF THE FINANCIAL STATEMENT PRESENTATION

7591-7608

15

M. Arief Mufraini IMPACT OF INVESTOR CONFIDENCE TOWARDS

OPERATIONAL STABILITY (AN EVIDENCE FROM SHARIA BANKING AS THE DEPOSIT BENEFICIARY OF HAJJ FUND IN INDONESIA)

7609-7629

16

Nur Hayati and Randi

Purnama

EFFECT OF THE POLITICAL MARKETING MIX

ON THE VOTER’S DECISION (STUDY ON THE LEGISLATIVE COUNCIL ELECTION OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA YEAR 2014 CONSTITUENCY II WEST JAVA)

7631-7646

17

Gregorius N. Masdjojo, FX.

Sugyanto, Myasto and R. Mariatmo

AN EMPIRICAL STUDY OF FOREIGN EXCHANGE RESERVE THROUGH THE BALANCE OF PAYMENT OF INDONESIA BASED ON THE KEYNESIAN AND THE MONETARY APPROACH

7647-7674

18

Achmad Sani , Budi Eko

Soetjipto and Vivin Maharani

THE EFFECT OF SPIRITUAL LEADERSHIP ON WORKPLACE SPIRITUALITY, JOB SATISFACTION AND IHSAN BEHAVIOUR (A STUDY ON NURSES OF AISYIAH ISLAMIC HOSPITAL IN MALANG, INDONESIA)

7675-7688

19

Muawya Ahmed Hussein and

Hanaa Mahmoud Sid Ahmed

SOCIO- ENVIRONMENTAL IMPACTS OF URBAN EXPANSION: CASE OF ARAB COUNTRIES

7689-7706

20

Ritha F. Dalimunthe MODEL DEVELOPMENT AND ENHANCING

COMPETITIVENESS STRATEGY BASED BUSINESS ENTREPRENEUR IN MEDAN

7707-7715

21

Wanichcha Narongchai,

Dusadee Ayuwat and

4

Oranutda Chinnasri IN THE NORTHEAST, THAILAND

22

Alexandrina Maria

PAUCEANU, PhD, Moinuddin AHMAD, PhD and

AbubakrAlsdiq Abbas ABUMRAEN, PhD

A 21ST CENTURY TOURISTIC PERSPECTIVE ON UNITED ARAB EMIRATES, QATAR AND SULTANATE OF OMAN

7737-7749

23

Tuti Karyani, Hesty N. Utami,

Agriani H. Sadeli, Elly

Rasmikayati, Sulistyodewi and Nur Syamsiyah

MANGO AGRICULTURAL SUPPLY CHAIN: ACTORS, BUSINESS PROCESS, AND FINANCING SCHEME

7751-7764

24

Rina Br Bukit and Fahmi N.

Nasution

VOLUNTARY DISCLOSURE, MONITORING MECHANISM AND FIRM VALUE

7765-7774

25

Agus Widarjono IS DEMAND FOR STAPLE FOOD SENSITIVE TO

PRICE CHANGE? EVIDENCE FROM INDONESIA

7775-7790

26

Anuar Sanusi, Anggalia

Wibasuri and Andi Desfiandi

MODEL OF EMPOWERMENT-BASED MANAGEMENT CHANGE AND ITS RELATION TO THE COLLEGE QUALITY IMPROVEMENT

7791-7809

27

Yusuf Samad IMPROVING THE SUPERIOR APPARATUS

PERFORMANCE BY CONSIDERING SATISFACTION, COMPETENCE AND MOTIVATION

7811-7823

28

Azhar Affandi, Atty Tri Juniarti

and Sidik Priadana

IMPLEMENTATION OF MANAGEMENT STRATEGY ON BUDGETING FOR CULTURAL PRESERVATION CASE STUDY OF TOURISM AND CULTURE AFFAIR AGENCY IN WEST JAVA

7825-7837

29

R. Aboulaich and N. Yachou HOME FINANCING THROUGH MODIFIED

DIMINISHING PARTNERSHIP

7839-7861

30

Iskandar Muda, Abykusno

Dharsuky, Isfenti Sadalia and Hasan Sakti Siregar

IMPACT OF CAPITAL INVESTMENTS AND CASH DIVIDEND POLICY ON REGIONAL DEVELOPMENT BANK (BPD) PT. BANK SUMUT TO THE DISTRICT OWN SOURCE REVENUE AND ECONOMIC GROWTH

7863-7880

31

ArlinaNurbaity Lubis and

Prihatin Lumbanraja

SERVICE QUALITY AS KEY FACTOR IN REVITALIZING TRADITIONAL MARKETS THROUGH LOYALTY

7881-7892

32

Sutrisno RISK MANAGEMENT AND PERFORMANCE OF

CONVENTIONAL BANKING IN INDONESIA

7893-7902

33

Wajid Fauzi, Abas Basori,

Sulthon Sjahril Sabaruddin and Rediatma Ihsan Supriyadi

A SIMULATION OF THE IMPACT OF INDONESIAYEMEN BILATERAL TRADE LIBERALIZATION ON THE INDONESIAN AND YEMENI ECONOMIES: A SMART MODEL APPROACH

7903-7919

34

Dinesh Kumar AN ECONOMETRIC ANALYSIS OF FOREIGN

DIRECT INVESTMENT AND ECONOMIC GROWTHA STUDY WITH SPECIAL REFERENCE

5

TO SAARC MEMBER ECONOMIES

35

Bambang Heru Purwanto,

Soleh Suryadi and PO Abas Sunarya

THE ENVIRONMENTAL FRIENDLY ECONOMIC CREATIVE MODEL TOWARDS THE PEOPLE AROUND THE RESERVOIRS OF CIRATA THE PROVINCE WEST JAVA INDONESIA

7935-7952

36

Mukhamad Rachmat CORRUPTION OPPORTUNITIES IN DIMENSION

OF REGIONAL FINANCIAL MANAGEMENT

7953-7960

37

Sri Sustariyah, Sucherly,

Undang Juju and Otong Karyono

FACTORS DETERMINING VALUE AND CUSTOMER TRUST BUILDING

7961-7968

38

J. Radha and R. Jayam CUSTOMER SATISFACTION TOWARDS

SHOPPING MALLS AT CHENNAI CITY – AN EMPIRICAL STUDY

7969-7982

39

Ronald and Amelia DETERMINACY OF ACTUAL USAGE THROUGH

BEHAVIORAL INTENTION CIMB NIAGA AIR ASIA BIG CARD

7983-7995

40

Wilson Bangun HUMAN RESOURCE: TO INCREASING

INDONESIAN COMPETITIVENESS ON ASEAN ECONOMIC COMMUNITY

7997-8003

41

Makaryanawati, Made

Sudarma, Erwin Saraswati and Abdul Ghofar

HUMAN CAPITAL, BOARD MONITORING AND CORPORATE PERFORMANCE

8005-8020

42

Herry Maridjo, Lukas Purwoto

& Y.M.V. Mudayen

THE IMPLEMENTATION OF SUSTAINED POVERTY ALLEVIATION PROGRAM IN RURAL COMMUNITY BASED ON LOCAL COMMUNITY

8021-8037

43

Antonius Diksa Kuntara and

Lilis Setiawati

FAIR VALUE AND HISTORICAL COST ACCOUNTING: EVIDENCE FROM INSURANCE COMPANIES IN INDONESIA

8039-8047

44

Sri Suryaningsum, Moch. Irhas

Effendi and R. Hendri Gusaptono

THE BEST MODEL GOVERNMENT BASED ON TRUSTEESHIP GOVERNANCE (STUDY CASES: BOJONEGORO DISTRICT)

8049-8060

45

Lita Yulita Fitriani, Sri

Suryaningsum, Indra Kusumawardhani and Valannisa Sally

THE EFFECT OF PARTICIPATIVE BUDGETARY, ASSYMETRIC INFORMATION, PRESSURE-HANDLING, AND ORGANIZATIONAL COMMINTMENT ON THE BUDGETARY SLACK

8061-8070

46

Robertus Sigit Haribowo Lukito

and Diyah Tulipa

IMPULSE BUYING BEHAVIOR ON CONSUMER RETAIL FASHION IN SURABAYA - INDONESIA

8071-8086

47

Indarto IMPLEMENTATION OF CORPORATE SOCIAL

RESPONSIBILITY BY MICRO, SMALL AND MEDIUM ENTERPRISES CASE STUDY IN SEMARANG CITY

8087-8101

48

Chatarina Yekti Prawihatmi AVELLIATING POVERTY THROUGH

DEVELOPING MICROCREDIT BASED SELF HELP GROUP STUDIES IN UP2K-PKK SEMARANG

6

49

Noto Pamungkas,

Rusherlistyani, Indra

Kusumawardhani and Candra Wijang Asmorosanto

THE INFLUENTIAL FACTORS TO THE POSTPONE AUDIT IN MINING COMPANIES

8115-8129

50

Paulina Permatasari and

Paulina Tindaon

INTEGRATED APPROACH MODEL TOWARDS UNIVERSITY SUSTAINABILITY: ANALYSIS OF BEST PRACTICES OF SUSTAINABLE UNIVERSITIES

8231-8165

51

I Nyoman Darmayasa, I Made

Sudarma, M. Achsin and Aji Dedi Mulawarman

DECONSTRUCTION OF EQUITABLE TAX AMNESTY

8167-8179

52

Primadona ENTREPRENEURIAL SUCCESS WITH SOCIAL

CAPITAL IN JAVA (MINANG ETHNIC AND THIONGHOA)

8181-8193

53

Wuri Septi Handayani A STUDY OF NON-STATIONERITY

MACROECONOMIC INDICATOR (GROWTH) EVIDANCE FROM INDONESIA

8195-8209

54

Andreas and Lusia Permata

Sari Hartanti

NAÏVE BAYES IMPLEMENTATION INTO BAHASA INDONESIA STEMMER FOR CONTENT BASED WEBPAGE CLASSIFICATION

8211-8223

55

Yuyung Rizka Aneswari,

Gugus Irianto and Ali Djamhuri

DOES THE FORMULATION OF TAX AMNESTY CONSIDERING SMES?*

8225-8236

56

Yohanes Maria Vianey

Mudayen and Herry Maridjo

THE IMPACT OF FOREIGN DEBT AND

INVESTMENT ON INDONESIA’S ECONOMIC

GROWTH AND AN ANALYSIS OF INDONESIA’S

POLICY FOR LEAVING IMF

8237-8254

57

Yosi Suryani ANALYSIS OF MARKET BOUNDARIES ON

TRADITIONAL MARKET PLACES MANAGED BY LOCAL GOVERNMENT IN PADANG

8255-8269

58

Sasmita Mohanty and Dr.

Kalyani Mohanty

HUMAN ASSET MANAGEMENT, A CHALLENGE FOR SERVICE SECTOR: AN ANALYSIS FROM EMPLOYEE RETENTION PERSPECTIVE

7

THE EFFECT OF PARTICIPATIVE BUDGETARY, ASSYMETRIC INFORMATION, PRESSURE-HANDLING, AND ORGANIZATIONAL COMMINTMENT ON THE BUDGETARY SLACK

Lita Yulita Fitriani*, Sri Suryaningsum*, Indra Kusumawardhani*, and Valannisa Sally*

Abstract : This research had aimed to assess the impact of budgetary participative on the slack of budgeting, the asymmetric information on the slack budgeting, the handle-pressure on the slack of

budgeting and the commitment of cohesiveness on the slack of budgeting. The prime of population

element in this case is Satuan Kerja Perangkat Daerah (SKPD) Klaten Regency. The samples on this

issue are head of the division/Subsection of finance, treasurer, and staff involved in the budgeting

process at the work units (SKPD) Klaten regency that obtained by sampling purposive method

regarding the population that will be used for a research sample requires a specific criteria based on

researcher criteria. The data was collected using the instrument through the form of interviews and

questionnaires. The hypothesis in this study was examined by using analysis of multiple linear

regressions. The results of this research are budgetary participation which had not affect budgetary

slack, asymmetric information, handle-pressure budgeting and organizational commitment affected on

budgetary slack.

Keywords: budgetary participation, asymmetric information, budget emphasis, organizational commitment and budgetary slack

A. INTRODUCTION

In recent year, there were a plenty of misappropriation of government funds both in the

8 something incorrect way. According to Sinlaeloe (2013), Darlis (2002), and Bastian (2006), the

conditions allowed corruption are handled budgeting in the proposal using excess information by

subordinates or irresponsible person conveying incorrect data and non actual fulfillment in order to

reach the organization goal, whilst it is for personal fulfillment or community to do slack budgetary

that will effect on government funds and attack on the social welfare. Every single person has

different purpose to deal with it, thus leading the slack problem arise likely. Having this issue,

emphasizing this case is budgetary slack. Slack budget is the differences between the numbers of the

budget with the significant estimation. Relating argument of Porter et al (1974), Brownell (1980),

Pope (1984), Anthony and Govindarajan (2004), Nouri et al (1996), Young, S.M. (1985). Alexander

and Joan (2016), Jeremy and Douglas (2015) and generally, the budgetary slack is performed through increasing or decreasing the cost of revenue than it should be, thus the budget has approved. The

participative budgeting is a budgeting stage process which inclusive other persons have significant

rule to the target budgeting.

Looking on this topic, this essay was mad to elaborate the affect budgetary slack, asymmetric

information, handle-pressure budgeting and organizational commitment affected on budgetary slack,

Klaten Regency in particular.

The system of organization is an introduction, theory and hypothesis development, research

methods, results and discussion, along with conclusions and recommendations.

B. Theory and The Developmental Hypothesis

Used theory in this research is keagenan theory. Concerning to the Rahman (2002), the

practical budgetary was explained from keagengan theory influenced by the proposed conflict

between managements with the owner that arise when the two sides are trying to achieve or maintain

the level of prosperity. The meaning of keagengan theory is a theory regarding the relationship either

in functional or structural of the stakeholders. Moreover, the specific drift on principal in Klaten

regency of administration is the supervisor and the subordinate. The job lists of subordinates are

planning, executing and reporting on local budgets by grabbing a Local Government Budget team

(TAPD), while the supervisor has a significant role to implement the legislating, budgeting, and over

sighting. Whereas the subordinate participated in the preparation of the budget have specific

information on local conditions, will allow subordinates the provision information in its possession to

assist the company's needs.

The details budgetary mean the explicit planning of a government that written in the form of

finance within a specific period. According to Supriyono (2000), the budget has several functions,

namely the functions of planning, coordination functions, communication functions, control functions,

9 in the control of the organization in order to work effectively and efficiently. Based on keagengan

theories, then the result of hypotheses development are:

A. The effect of budgetary participative on the slack budgetary

The participative budgetary is participate from other person to create budgeting needs. The

higher the person was involved, the higher the budgeting was obtained, and the otherwise of it.

However, the hypothesis revealed that :

H1: The budgetary participative have a significant impact on the slack budgetary B. The Effect of Asymmetric Information on budgetary slack

In this article, the definition of asymmetric information is stakeholders who have more

knowledge and information than others. If the supervisor has asymmetric information, the employee

will provide the demand on the achieving budget. In contrast to the otherwise if the subordinates have

asymmetric information, the subordinate would hide information in order to achieve a lower budget

than it should be. Thus, it is taken a strive monitoring / surveillance to acquire on slightly track.

Therefore, the hypothesis is stated further in bellow :

H2: the asymmetric information has a significant influence on budgetary slack.

C. The effect of handle-pressure on budgetary slack

The handle-pressure of the budget is granting rewards to subordinates when they reach the

set targets. Whereas sometimes it is misused by the stakeholder, one of them is giving extra fee to

subordinates who gain on target, because the target is set too high then the subordinates tried to find

ways to make these targets is reduced for instance by increasing the operating costs. Then, there was

budgetary slack. Therefore, the hypothesis is stated bellow in:

H3: the handle-pressure has a significant influence on budgetary slack

D. The effect of commitment cohesiveness on budgetary slack

The commitment cohesiveness is a form of emotional to the organization that includes

moral support and accepts the norm of the organization as well as the determination within myself to

the service of the organization. Then, the higher the level of commitment cohesiveness, negatively the

more the relationship between budgetary participation and budgetary slac , which means that the

higher commitment cohesiveness then the lower the intelligence of managers who participated in the

preparation of the budget to create budgetary slack. Therefore, the hypothesis is stated in bellow

10

D. RESEARCH METHOD

The element population which used in this article is the work units (SKPD) Klaten district

consisting of 6 Offices, 2 Bodies, Regional Secretariat Section 8, Parliament Secretariat, Offices 5,

Isnpektorat, municipal police, 3rd districts and 2 villages. The type of data used is primary data,

including the information that directly obtained from the SKPD through observation and surveys by

filling the questionnaire on the respondent in November 2015 - February 2016. The regional work

units (SKPD) in this study because SKPD included in sector organizations public has a participatory

budget system.

There are several criteria that determine the sample, namely:

1. Employees who practice the functions of accounting / finance Administration of the SKPD.

2. The respondents in this study is the head and the subordinate staff of accounting / finance

administration, thus every SKPD determined by purposing sampling of three respondents.

3. The respondents assigned on the head and the subordinate staff of accounting / finance

administration and treasure.

The determination of the number of respondents are 87 to 29 in which every SKPD has

every 3 respondents. The following table data questionnaires were taken:

Table 1.1 The details of Shipping and Returns Questionnaire

Explanation Number

Sent Questionnaire 87

Return Questionnaire 79

Used Questionnaire 75

Not Return Questionnare (87-79) 8

The Level of Return Questionnaire (79/87 x 100%) 91%

The Level of Used Questionnaire (75/87 x 100%) 86%

Within 87 sent questionnaires, only 79 questionnaires were returned by the regional unit of SKPD,

because there are three of the regional unit of SKPD that does not return the questionnaire results.

D. RESULTS AND DISCUSSION

11 With the assist of software SPSS 19 for windows, the results of the test regression analysis for this

research were elaborated in bellow:

Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 3.57 .47 7.54 .00

Participative Budgetary .19 .10 .19 1.90 .06

Asymmetry Information -.37 .09 -.39 -3.99 .00

Pressure-Handling

Budgetary

-.35 .10 -.35 -3.50 .001

Organization Cohesiveness .32 .08 .38 3.86 .00

a. Dependent Variable: the average of budgetary slack

Based on the results of the data processing contained in Table 4.12 it can be explained from

the significant probability of participatory budgeting variables of 0.06 , a significant probability of

asymmetric information variables of 0.00 , a significant probability variable Pressure-Handling

Budgetary of 0.001 , and the probability of a significant variable Organization Cohesiveness of 0.00 ,

It can be concluded that the participative budgeting variable does not affect on budgetary slack as

participative budgeting probability value above 0.05 , while the budgetary slack variables affected by

asymmetric information, the Pressure-Handling Budgetary, and commitment to organizations where

significant probability value below 0.05 with a systematic equation :

Y = 3.57+ 0,19X1 - 0,37X2 - 0,35X3 0,32X4 + e +

Multiple regression equation above can be interpreted that:

1. The constant value of 3.57 indicating that if the independent variables are participative budgeting,

information asymmetry, pressure-handling budgetary and organizational cohesiveness is not exist

12 2. The coefficient participative budgeting variable regression is (positive) 0.19. This means that any

increasing participative budgeting would climb the budgetary slack 19.0% without the influence of

other factors.

3. The coefficient regression asymmetric information (negative) is -0.37 this means that any

increasing in asymmetric information will reduce budgetary slack of 37.4% without the influence of

other factors.

4. The coefficient regression suppression budget is (negative) -0.35 this means that any increasing in

emphasis occurred budgetary slack budget will decrease of 34.8% without the influence of other

factors.

5. The coefficient regression organizational commitment is (positive) 0.32 this means that there is an

increase commitment in single organization will raise the budgetary slack of 31.8% without the

influence of other factors.

2. DISCUSSION

2.1. The effect of Participative Budgeting on the budgetary slack

Based on the results of partial test between the effects of participative budgeting on the

budgetary slack, showed the t value of 1.90 with a significance value of 0.00 which had under 0.06.

While the results of multiple regression test showed regression coefficient of 0.19.

The first hypothesis in this study was rejected, thus it can be concluded that participative

budgeting does not affect the budgetary slack.

The results of this study are supported with conducting research by Merchant (1985), Dunk (1993),

and the Goddess (2014) found the participative budgetary negatively affecting on budgetary slack.

According to Milani (1975) by arranging the participative budgetary is expected the

subordinate manager’s performance will increase. It is based on the notion that when a goal or standard designed on the participative approved, then the employee will be serious in the purposing or

establishing standards, and the employees also have a sense of personal responsibility to achieve it

because of the participation in preparation.

2.2. The effect of Asymmetric Information on budgetary slack

Based on the results partial test between the effects of asymmetric information on the

budgetary slack, showed t value of -3.99 with significance value of 0.00 which had under 0.05. While

13 The second hypothesis in this study accepted, thus it can be concluded that asymmetric

information affect the budgetary slack.

The budgetary slack would be wider in the asymmetric information conditions because the

asymmetry information encourages budgeting subordinates / executors of the budget proposing on the

budgetary slack. Theoretically, the asymmetry information can be reduced by strengthening

monitoring and improving the quality of explanation. (Suartana , 2010)

The results of this study are also consistent with the results of research conducted by the

Goddess (2014 ) that the asymmetry information positive influence on budgetary slack, Mahadewi (

2014 ) assessed that the asymmetry information in the participative budgeting system on budgetary

slack has a positive influence .

Concerning to the Suartana (2010) revealed that budgetary slack will be wider in the

asymmetric information condition because the information asymmetry encourages budgeting

subordinates / executors of the budget proposing on the budgetary slack

2.3. The Effect of Pressure-Handle On Budgetary Slack

Based on the results of the partial test (t test) between the pressure-handle on the budgetary

slack, it can be showed t value of -1.18 with significance value of 0.001 which is under 0.05. As for

the coefficient multiple regression tests showed regression of -.35. Thus, the third hypothesis is

accepted, the handle-pressure budgeting effect on the incidence of budgetary slack. The more

pressure-handling budget increases, the more budget will raise on budgeting slack targets.

The pressure-handling budgetary occurs when the budget targets is being s a benchmark of

subordinates performance, or providing monitory extra incentives such as bonuses when the

budgeting targets reached. Based on the results of research, the pressure-handling budgetary has

significant influence on the budgetary slack on the proposing budget process at SKPD Klaten regency.

A significant relationship between pressure handling budgeting with budgetary slack was supported

by research conducted of Apriantini (2014) that assisted the pressure-handling budgetary has a

significant influence on the budgetary slack.

Regarding the opinion of Lewis in Ramdeen et.al (2006) explained that the pressure handling

budgeting in the work performance can encourage the budgetary slack. The prime reason the

subordinate manager creating the budgetary slack is creating the opportunities for them to increase the

14 achievement of a budget, thus they will create the budgetary slack while the participation process with

suppression budget. (Ramdeen et.al, 2006).

2.4. The Effect of Influence Organizational Cohesiveness on budgetary slack

Based on the results of the partial test (t test) between organizational cohesiveness on

budgetary slack showed t value of 3.86 with significance value of 0.001 which is under 0.00. As for

the multiple regression test showed regression coefficient of 0.32. Then, that the fourth hypothesis is

accepted, organizational cohesiveness influences the onset of budgetary slack. Having an increase of

organizational cohesiveness, it will improve on the budgetary slack in setting budget targets.

According to Porter et al (1974) the organizational cohesiveness can grow due to people have an

emotional attachment to the organization including moral support and the values acceptation that

exist either in the organization or individual as well as the determination within myself to the service

of the organization . Manager who has a high organizational commitment will have a more positive

mindset and try to do their best for the sake of for the organization. With the high commitment, the

high possibilityof budgetary slack can be avoided.

The results of this research are also consistent with the results of research conducted by Apriantini (

2014 ), there is a significant interaction effects between organizational cohesiveness on the

relationship between the participative budgetary and the budgetary slack .

E. Conclusions and Suggestions

1. Conclusions

Based on the results of research on the Effects of Participative Budgeting, Asymmetric Information,

Pressure-Handling Budgeting and Organizational Cohesiveness on budgetary slack, it can be

concluded that:

1. The Participative Budgeting has not effect on budgetary slack

2. The Asymmetric information has an effect on budgetary slack

3. The Pressure – Handling Budgeting has an effect on budgetary slack

4. The Organizational Cohesiveness Organizational has an effect on budgetary slack

2. Suggestions

- The manager should more monitory the details of the budgeting submitted by subordinates.

15 - The commitment of organization should not use the budgeting as the main prime in assessing the

performance of employees.

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