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Akuntansi Persentasi Bab 10-B.ing
Akuntansi Persentasi Bab 10-B.ing
and they know that these targets will be used to assess their performance, they are
likely to set asily attainable targets so that their chances of meeting the targets are
higher. However, if targets determined by op management, the target may be
unrealistic as top management may lack the necessary field knowledge to set
realistic targets. This brings us to different approaches of budgeting , namely
bottom-up and top-down.
Bottom-up-budgeting
The initial flow of budget data in a bolltom-up budgeting system is from lower levels
of management to higher levels of management. Each person with responsibility for
cost or revenue will prepare his or her own budgets estimates and submit them to
the next higher level of management. These estimates are reviewed and
consolidated as they move upward in the organization.
It can also cause a lot of undesired behavior effects. One of the major drawbacks of budget lapsing is that it
creates incentives for managers to wastefully spend their entire budget before the end of the year
regardless of the actual needs in order to avoid budgets cuts. For example, managers may organize
expensive overseas staff retreats just before the end of the year, buy a lot of stationery items which can be
expensed off.
Budget lapsing therefore has its purposes and drawbacks. In order to enjoy the benefits of the
system while avoiding wasteful expenditure, a system of reviewing the expenditures near end of the year
can be implemented, and any unusual expenditure is investigated. This may provide the necessary
disincentive for managers to wasteful spending caused by budget lapsing.