THE ROLE OF BUDGET PARTICIPATION, INFORMATION ASYMMETRY, SUPERVISORY TRUST AND BUDGET FAIRNESS ON THE PROPENSITY TO CREATE BUDGET SLACK

This study examines the role of participation, information asymmetry, supervisory trust and budgetary fairness on the propensity to create budgetary slack. It presents the results from a sample of supervisors in Nigerian manufacturing industries. It uses percentages and the ordinary least square regression method to analyze the data. The results show that there is an interaction between budget participation, information asymmetry, supervisory trust and budget fairness that gives rise to the propensity to create budget slack. The study recommends that in order to reduce the propensity to create budgetary slack by supervisors, budgets allocations should not only be fair, but they should be seen to be so. It also recommends among other things that managers should behave in such a way as to ensure the trust of their subordinates.