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Are budgets useful? A survey of Malaysian companies

Nik Nazli Nik Ahmad (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Maliah Sulaiman (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Norhayati Mohd. Alwi (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 1 December 2003

11098

Abstract

This study examines if budgets are still used in Malaysian companies. There are two divergent views on the usefulness of budgets. Proponents of budgets argue that they are still relevant and useful. Meanwhile, critics claim that budgets are obsolete. The study uses the instrument developed by Drury et al.. Results are compared to those of Guilding et al. The results show that budgeting practices in Malaysia are similar to those in the UK and New Zealand. There are only three major differences. First, Malaysian managers appear to feel that a participative approach to budgeting may encourage budget padding. Second, a much higher percentage of respondents compared to the Guilding et al.’s study, agree that top management should evaluate performance mainly on ability to achieve budgetary goals. Finally, companies in Malaysia appear to use flexible budgets more than those in the UK and New Zealand.

Keywords

Citation

Nazli Nik Ahmad, N., Sulaiman, M. and Alwi, N.M. (2003), "Are budgets useful? A survey of Malaysian companies", Managerial Auditing Journal, Vol. 18 No. 9, pp. 717-724. https://doi.org/10.1108/02686900310500479

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MCB UP Ltd

Copyright © 2003, MCB UP Limited

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