Harvard Budgeting & Planning in Government and Public Private Sectors Research Paper

Title of the Paper would be: Planning & Budgeting in Different Sectors or you can decide based on the attached article.

  Budgeting and Managerial Accounting
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Budgeting and Managerial Accounting
Week 2: Article Reviews Assignment
ABSTRACT
Budgeting is utilized all through a broad scope of organizations and is a noteworthy
accounting research topic. To advance the benefits discussion and the budgeting drawbacks,
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Budgeting and Managerial Accounting
future research on budgeting will profit from a comprehensive review of theories utilized by past
budgeting researchers. This paper pinpoints the major hypothetical perspectives and explicit
speculations used in the research just as the primary factors used and the methodologies. Even
though we locate no cohesive budgeting theory, we distinguish the significance of a unified
thought process to the budgeting research and offer perceptions for future work in the region.
Introduction
Research on budgeting has a very long history in management accounting. Regardless of
its permanency, the study comes up short on a comprehensive or cohesive theory (Gibran &
Sekwat; 2009). The research grounded in theory gives opportunities for examining complex
issues while offering a corroborated and detailed explanation for the effects and causes of
empirical results. In other words, a progression of relationships is established by the theory
amongst concepts which might not be appropriately defined, permitting for insights into practical
outcomes and actions. Given the budgeting uses across the organizations and industries and the
multiple needs, the absence of an extensive hypothesis is not astounding.
The primary purpose of this study is to enlighten the researchers’ about the theoretic
advances which are made the budgeting research from different viewing points (Covaleski et al.,
2013). In this research, it also offers an account of the theories that have been adopted and have
been applied in the study of budgeting to date. Reliable with preceding literature, three major
hypothetical perspectives are drawn, sociology, economics, and psychology, as a starting stage
for sorting out these theories
Secondly, it classifies and identifies explicit hypotheses in every perspective. It then
distinguishes studies which deviate from these outdated classifications and those which do not
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Budgeting and Managerial Accounting
cite a particular theory in developing expectations and predictions that surround the relationship
amid non-budgeting and budgeting constructs. Lastly, it also classifies studies which are found to
expand on the past models or other writing yet that does not refer to an explicit theory. In giving
both a comprehensive analysis of specific hypothesis, it offers insights into the studies which
examine the budgeting research from both innovative and traditional perspectives. This study
helps researchers to familiarize themselves with the theory which can direct their research in the
future and distinguish domains which have been understudied in their present disciplines of
research.
Literature Review
The researchers acknowledged a list of seventeen journals targeted to help in guiding the
articles selected for inclusion in their review of budgeting hypothesis. These journals included
the commonly documented top 5 journals for accounting and twelve other most highly tiered
peer-reviewed journals for accounting which had published budgeting studies. In every
publication, they searched all ABI fields and databases of ProQuest utilizing the wildcard search
team budget that yielded 651 articles, of which 249 articles were categorized in the study. A total
of 355 articles were used in the broad search term, which researched the issues of budgeting and
not explicit to the research on budgeting.
The remaining part of the article is as follows: the third part describes the methodology of
the research and the framework for the paper analyses this includes the survey methodology and
the experimental methodology. The fourth part the outlines the summary of the analysis and
lastly discusses it concludes the paper.
Data Analysis
Budgeting and Managerial Accounting
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Methodology
Quantitative research was used in the methodology. These methodologies include:
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Analytical, Archival and Experimental methodologies
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Survey Methodology.
Archival, Analytical, and Experimental Methodologies
In this methodology, seventeen articles were recognized as having no major hypothetical point of
view or explicit hypothesis in the methodologies of experimental, archival, and analytical
(Arnold, 2015). Variables that were introduced were used to examine characteristics variations of
the agent or user budget or context characteristics (for example, the Machiavellianism and
control locus). For instance, the use of an approach that is literature based to analyze the impacts
of a multi-period versus the single-period setting in participative budgeting (Fisher et al., 2006).
A single-period setting was previously studied in connection to the settings of the negotiated
budget. In this study, one does not depend on a particular hypothesis but cites literature from
psychology, and prior research on budgeting in accounting to help in introducing a multi-period
setting to a set of negotiated budgets.
Survey Methodology
Thirty-five papers don’t distinguish a noteworthy hypothetical point of view or explicit
hypothesis and use overview techniques to conduct the budget research (Arnold, 2015).
Numerous papers which utilize the methods of survey depend on extant literature to develop
research expectations or predictions and questions. The paper generally expands on previous
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Budgeting and Managerial Accounting
literature of examining variations or considering discrepancies in the findings that are relative to
the existing research. For instance, in the Accounting Review published by Brownell in the year
1991 analyses how the evaluative styles are influenced by control locus in the setting of a
budget.
Summary of the Literature Review
Given the comprehensive budget literature review that has been performed, the plethora
of the hypothesis applied all through the literature of budgeting has been identified. (Ahrens &
Ferry. 2015). Though most of the hypothesis can be categorized into three major hypothetical
perspectives, the explicit assumption is complex and diverse. As the researchers apply theories
from all the processes, required science field, and backgrounds, a cohesive budgeting hypothesis
still is not in existence. Notwithstanding a lack of a method which is unifying, the research
grounded as per a systematic approach results to study groups, as well as theoretical perspectives
which underpin the major management area of research in accounting.
Conclusion
Data analysis proved the research questions. The hypothesis establishes a progression of
relationships amid concepts which might or might not be adequately defined, permitting for
insights into pragmatic outcomes and actions. The theory also limits the range of what has been
studied, introduces incongruent or competing constructs, assumptions, and definitions as well as
research methodologies of constraint. In resolving the limitations of existing literature,
theoretical insights were provided to help the research distinguish the weaknesses in existing
theory and analysis, which might result in enhancements in the study.
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Budgeting and Managerial Accounting
Researchers and managers have significantly departed from the original budgeting
concept by, offering a basis to help assign spending to once activity over the other. With this
withdrawal, it is not astounding that they used a variety of hypothesis in explaining the budgeting
role in a firm. The researchers have found that budgeting is utilized for a variety of purposes
which incorporates, controlling behaviors, planning, motivating the managers, and measuring of
failure or success. Analyzing the usual model’s form might offer insights into how budgeting
influences behaviors. Therefore, further theories development is encouraged to help in
explaining numerous budgeting uses.
References
Ahrens, T., and L. Ferry. 2015. Newcastle city council and the grassroots: Accountability and
Budgeting under austerity. Accounting, Auditing, and Accountability Journal 28 (6):
903–33.
Budgeting and Managerial Accounting
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Amans, P., A. Mazars-Chapelon, and F. Villesèque-Dubus. 2015. Budgeting in institutional
complexity: The case of performing arts organizations. Management Accounting
Research 27: 47–66.
Arnold, M. C., 2015. The effect of superiors’ exogenous constraints on budget negotiations. The
Accounting Review 90 (1): 31–57.
Covaleski, M. A., M. W. Dirsmith, and J. M. Weiss. 2013. The social construction, challenge,
and Transformation of a budgetary regime: The endogenization of welfare regulation by
institutional entrepreneurs. Accounting, Organizations, and Society 38 (5): 333–64.
Fisher, J. G., J. R. Frederickson, and S. A. Peffer. 2006. Budget negotiations in multi-period
settings. Accounting, Organizations, and Society 31 (6): 511–28.
Gibran, J. M., and A. Sekwat. 2009. Continuing the search for a theory of public budgeting.
Journal of Public Budgeting, Accounting and Financial Management 21 (4): 617–44.
Running head: CAPITAL BUDGETING PROCESS
Capital Budgeting Process
Week 3: Article Reviews Assignment
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CAPITAL BUDGETING PROCESS
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Abstract
Capital investment is the major challenge for the government since it has to reflect value
for money through budgeting for accountability. Businesspeople are concerned with capital
budgeting for future preparation with the expectation of changes such as the shift in customer
preferences & needs, emerging products in large numbers as well as the change in distribution
channels. The recent experienced prime crisis of 2008 increased the interest of business theory
that focuses on the economic expansion of the business. The theory asserts that business cycles
as phenomena where there is a cluster of entrepreneur errors that expand until the economy
collapses. One of the costly mistakes is misapplications, such as using corporate-wide weighted
average cost capital to foreign-based cash flows instead of those that belong to the organization.
Introduction
The paper will be focusing on capital budgeting process where business proposals are
evaluated on whether they possess value for money based on anticipated capital demand. The
government or any profit-making entity have to identify the fundamental problems such that
strengths and weaknesses are determined to come up with alternative measures. With most of the
companies pushing for international presence, they are focusing on global capital budgeting. The
paper will analyze how these companies are taking the logical extension of capital budgeting as
well as how they end up the falling victim of such amendments (Gimenez, Lwango &
Vuillemey, 2015). To evaluate the concept of capital budgeting, the paper will explore the
financial analysis of investment initiative applying the post-Keynesian framework. The problem
is that in capital budgeting amendments to international standards causes errors that are possible
with generalization in the economy. The study evaluates the central aspect of capital budgeting
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ACTIVITY-BASED COSTING
that involves searching, evaluation, and allocation. The research places emphasis on searching
since decision-makers have to come with ideas that can translate into fruitful business
investments.
Literature Review
The research applies four peers reviewed journals as a back up to those articles that
provide critical analysis of capital budgeting process. As a result, four journals or priority are
picked that offer analysis of the process from government, international firms, and entrepreneur
point of view. In every article, their articulation of making future analysis is the core point of the
materials. Three hundred two peer-reviewed articles were used in the formation of the four
peered journals. They are cited to add the wide topic of the capital budgeting process.
Analysis of the capital budgeting requires to take into considerations the features that
define capital. The debut approach is determining whether expenditure fulfills the requirements
of capital expenditure. Then there is cost evaluation that determines on which intervals the
spending can be afforded (Burger & Hawkesworth, 2013; Musell & Yeung, 2019). The
analytical part is based on creativity that exclusively deals with proposals and implementation of
emerging solutions. Determining the next action is considered creativity, also termed as
synthesis act only that the former has to come first, then the latter. To achieve real productive
expansion, there has to be the reinvention of ideas is a requirement. The elements of real,
sustainable growth in credit influence environment exert pressure downwards for prices while
expanded credit results in inverted pressure. The emphasis on revising the component of affiliate
capital to align with the local situations can be traced to several factors. For instance, the
CAPITAL BUDGETING PROCESS
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localized customs may influence the specific amount of debt that might call for equity for
enduring commitment.
Data Analysis
The research takes the qualitative and quantitative approach of data analysis, where the
debut one is a survey aimed at determining the tools and techniques to assess creativity. There is
the use of simple devices that determine specific challenges that arrive at solutions. There also
use of analytical approach to evaluate budgeting metrics with the use of NPV and IRR to
appraise investment opportunities. There is extensive use of WACC that is a yield curve in which
the interest rates are minimized to provide future cash with increase present value (Smalter,
1969). The descriptive approach is meant for determining how incentive reduce the capital
expenditure in the form of TIP relative to present spending. The analysis takes the form of
minimizing the expenditure as a more straightforward way compared to entitlement expenditure.
Conclusion
The data analysis approves the research questions by revealing the theoretical pinning of
the business theory cycle. This is shown how the managers have to rely on capital budgeting
techniques hence ending up making a wrong evaluation if the interests’ rates are lowered. The
theoretical consequences of the results are arrival at considerable present value than supposed to
be amid agent preferences, capital structure, and real savings. The limitation of the study is that it
fails to adhere to the appraisal of future cash flows that might be rendered optimistic, given the
inequality in income distribution. In regard to this study, they can be used by using capital
budget techniques to identify investment opportunity by applying critical thinking.
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ACTIVITY-BASED COSTING
References
Burger, P., & Hawkesworth, I. (2013). Capital budgeting and procurement practices. OECD
Journal on Budgeting, 13(1), 57-104.
Giménez Roche, G. A., Lwango, A., & Vuillemey, G. (2015). Entrepreneurial miscalculation and
business cycles: How interest rate targeting distorts capital budgeting. Review of Political
Economy, 27(4), 624-644.
Musell, R. M., & Yeung, R. (2019). Understanding Government Budgets: A Guide to Practices
in the Public Service. Routledge.
Smalter, D. J. (1969). CREATIVITY IN PLANNING-BUDGETING PROCESS. SAM
ADVANCED MANAGEMENT JOURNAL, 34(2), 53.
Running head: ACCOUNTING
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Article Review
Student Name:
Institutional Affiliation:
Instructor:
Course Title:
Date:
ACCOUNTING
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ABSTRACT
The concern of this study is to arrive at the best budgeting model that will improve
financial status. The withdrawal or reduction of government funding to higher learning
institutions has massive effects resulting in various puzzles. The issue worsened during the
economic recession, thereby, succumbing beneficiaries to market pressures. The study reveals
multiple tensions, and also identifies different types of budgeting models. It employs two
outstanding tables to compare each of these models explicitly. The analysis depends on the net
profit, advantages and disadvantages of each. The concluding mark reveals that the best
approach to solve the quandary during this transition process is the activity and expanded
activity-based models. They are more robust and accurate.
Introduction
The sector of higher education experiences a funding crisis since there is a significant
reduction from the federal support. The magnitude of this impact was from the 2007 to 2009
economic recession. On further scrutiny, a decline in government funding goes down to 1980s
where the public institutions either received little or no support. These outcomes force every
administrator to have robust financial and budget knowledge to push their systems towards
sustainability. There are several accounts of challenges resulting in higher education since the
recessive period.
Despite the above shift, post-secondary education is in high demand since the recession.
On the other hand, there are challenges of increased tuition fee, reduced state budget allocation
and quality provision. The society demands affordable, efficient and accessible services as well
as accountability amidst other market pressures. It is this push that manifests the real deficit
ACCOUNTING
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experienced in higher education. Survivors of the same are administrators who have an excellent
understanding of financial and budgeting knowledge. If not, they must thrive to achieve such
level to ensure smooth operations by sourcing revenue elsewhere.
The articles throw their efforts towards studying and identifying optimal budgeting
models that are either activity or expanded-based. Such simulations provide the advantage of
improved decisions in every financial process. The list of relevant research questions is below.
What are the various budgeting methods or models used by higher learning institutions?
What is the effectiveness of adopting activity and expanded activity-based models?
Literature Review
The authors in the two articles were robust in their scholarly consultations to provide
sufficient evidence on their topics of study. The authors, however, did not follow a precise
procedure to label the literature review section in both articles. Based on each, there is an
aggregate of nine sources employed in the first article done by Willett, Andrew and Rudisill
(2016). The other author, Szatmary (2011), failed to indicate the sources used in writing this vital
section of research. Willet et al. (2016) highlighted six sub-topics throughout the article to
explicitly discuss the area of interest. Szatmary (2011), on the other hand, narrowed down to
three sub-topics to compare various budgeting models employed by post-secondary institutions.
Both articles agree on the longevity of various budget models in institutions set up. Along the
time frame, different models have been in place, but currently, based on environmental factors,
most institutions opt to change to improved models. After identifying the strengths and
limitations of each, they agree that a mixed approach can be the best in some instances.
Data Analysis
ACCOUNTING
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Methodology
The two articles primarily depended on the qualitative approach to discuss and explain
scholarly findings. It held since the authors were keen on comparing various budgeting models
and the best strategies to adopt to optimize on the budgeting process. The section depends on
secondary information to list different budgeting methods, their elements, advantages and
limitations in a tabulated format. A discussion of each follows. Similarly, there is another
tabulated approach comparing the budgeting procedures using the net revenue derived from each
upon employment.
In summary, since the government indicates a declining shift from funding higher
education to merely supporting it, there are various market pressures. Such outcomes call for
more prompt administration systems that are accountable and also have sustainable production
and access. There is a call for a significant overturn to curb the identified setbacks, which is via
revision of institutional budgeting model. The activity-based and its extension model provided
the best outcome with a higher accuracy level of forecasted measures.
Results/ Conclusion
The two articles addressed matters arising due to the adopted budgeting model in a
distinctive manner but with the same focus. The conclusion was significant since it remained
relevant to the research objectives and questions. In the end, there was sufficient and relevant
information concerning various budgeting techniques in both articles. Similarly, there was a
proper comparison of each model right from the elements, advantages to limitations. The next
research question got equal attention since activity and expanded activity-based models formed
the best approaches any administration should consider using.
ACCOUNTING
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After noting the government shift from support and identifying all the models, it is
necessary to revise and change the budgeting approach at the institution level. Statistics show
that most bodies are transiting to advanced models. One thing remains vital during this process;
the need to implement the objectives of the improved technique. The caution will ensure a
smooth operation with defined functionality matching the organization’s goals. The employment
of activity-based provides the administration with efficiency in operations and informed
decision-making processes. Understanding financial health is more comfortable since the system
allows revenue-expense comparison. It also helps on decisions such as courses to provide,
pricing, salaries and marketing strategies, among others.
Since the articles are silent on the adversity of wrong interpretations of the identified
optimal methods, it would be detrimental if anyone adopts any without prior or sufficient
knowledge. One thing that was evident before implementing any budgeting model is to revise its
objectives and upgrade what exist in the institution’s system. Failure to meet such calls for an
impending shutdown. One limitation of the study is over-reliance on the qualitative approach to
present evidence. The weakness of the same are so loud at times and going for the mixed
technique fills the gap as its scientific findings easily stand the test of time.
I am determined to provide resourceful information in my research area, and the extracts
from this study are significant towards identifying various budget models. Some of these were
out of my knowledge, and as a scholar, I find them relevant to my topic. Notably, advanced
methods of activity-based are the best. I will be at the top position to provide practical policy
recommendations towards affordable, efficient and accessible services in higher learning
institutions.
ACCOUNTING
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Reference
Szatmary, D. P. (2011). Activity-Based Budgeting in Higher Education. Continuing Higher
Education Review, 75, 69-85.
Willett, M. S., Andrew, D. P., & Rudisill, M. E. (2016). Understanding budget models in higher
education and their applications to kinesiology: Strategies for success. Kinesiology
Review, 5(4), 221-228.