Essays on The Truth about the Budgeting Process Literature review

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The paper “ The Truth about the Budgeting Process” is an actual example of the literature review on business. The manner in which the business environment is undergoing changes the need has come to move beyond budgeting and look at developing a management accounting system that contributes towards the long term business operations and performance. Hope & Fraser (2003) stated that businesses should look towards eradicating the use of budgeting so that a better process can be implemented. The debate to move away from budgeting has come due to the growth and advancement of the information age (Drury, 2008).

The business environment has become so competitive and complex that the present form of budgeting is not useful for business. Organizations are continuously facing dissatisfaction associated with traditional budgeting and require moving away from the process of traditional budgeting and reinvigorating new management accounting methods so that better management decisions can be taken. The paper thereby looks at analyzing the manner in which the concept of budgeting has developed and evolved over time and analyzes the different limitations associated with the traditional budget.

This will help to analyze the manner in which business has looked to eradicate the concept of traditional budgeting and moved away from the concept of budgeting. Since the paper looks towards evaluating the different factors which are pertinent for moving away from budgeting so it will look at analyzing the present business environment and highlight the manner in which different management accounting concepts can be used for decision making. Evaluation of the Various Concept of BudgetingBhimani et al (2008) is a quantitative business plan which has been developed by managers so that the business goals can be achieved.

Becker et al (2009) has stated that the budgeting is a key concept of management accounting concepts and helps business to accomplish the goals. Budgets during the 1920s were developed to help managers to control cost and cash flows so that business could have managed the different activities in a better and coordinated manner (CIMA, 2007). The process looks at developing fixed performance contracts which help to identify the future income and expenditure expectations so that future strategies can be developed based on it.


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Becker, S., Messner, M. and Schaffer, U. (2009). The Evolution of a Management Accounting Idea: The Case of Beyond Budgeting. Working paper.

Bhimani, A., Horngren, C., Datar, S. & Foster, G. (2008). Management and Cost Accounting, 4th ed. Harlow: Pearson.

CIMA (2007). Beyond Budgeting. [Online] Available at:

Daum, J. (2002). Beyond Budgeting: A Model for Performance Management and Controlling in the 21st Century? Controlling and Finance.

Daum, J. and Hope, J. (2003). The origins of Beyond Budgeting and of the Beyond Budgeting Round Table (BBRT) - An interview with Jeremy Hope.

Drury, C. (2008). Management and Cost Accounting. 7th Edition. Andover: Cengage Learning.

Dugdale, D. and Lyne, S. (2006). Budgeting. CIMA Financial Management, 32-35.

Ekholm, B. and Wallin, J. (2010). Is the annual budget really dead? European Accounting Review, 9(4), 519-539.

Hope, J. and Fraser, R. (2007). Beyond budgeting...breaking through the barrier to 'the third wave'. Management Accounting, 75(11), 20-23.

Hope, J. and Fraser, R. (2001). Beyond Budgeting Questions & Answers. CAM-I

Hope, J. and Fraser, R. (2003). New ways of setting rewards: the Beyond Budgeting model. Californian Management Review, 45(4), 104-119.

Hope, J. and Fraser, R. (2003). Who needs budgets? Harvard Business Review. 81(5), 125-126.

Jensen, M. (2003). Paying People to Lie: the Truth about the Budgeting Process. European Financial Management, 9(3), 379-406.

Libby, T and Lindsay, R. (2009). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research.

Neely, A., Bourne, M. and Adams, C. (2003). Better budgeting or beyond budgeting? Measuring Business Excellence, 7(3), 22-28

Otley, David (2001) Extending the boundaries of management accounting research, British Accounting Review, 33, (2001), pp. 243-261.

Van der Stede, Wim (2000) The relationship between two consequences of budgetary control, Accounting, Organizations and Society, 25, (2000), pp. 609-622.

Ryan, Bill (2007) Budgeting, the individual and the capital market: a case of fiscal stress. Accounting Forum, 31, (2007), pp. 384-397.

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