Managerial Accounting and Reflective Journal

This report discusses the importance of managerial accounting and the use of budgeting as a management technique. It explores the budgeting process, the purpose of planning, controlling, and evaluating performance. It also examines top-down and bottom-up budgeting practices and their impact on organizations. The report concludes with a reflection on the findings and recommendations.

Managerial Accounting
and Reflective Journal

ABSTRACT
As per the below report it is analyzing that managerial accounting is essential part of the
accounting in which consist of budgeting procedure that apply by the every type of organisation.
This procedure is mainly based on the planning and controlling all the activities of business in
systematic manner. This report based on the peer reviewed article that based on the Indonesian
government which is using this procedure for the country development.

Contents
ABSTRACT................................................................................................................................................3
INTRODUCTION.......................................................................................................................................5
MAIN BODY..............................................................................................................................................5
1. The budgeting process.........................................................................................................................5
2. Budgeting process satisfies the purpose of planning, controlling and evaluating performance............6
(3) Top down budgeting and bottom up budgeting..................................................................................7
(4) Traditional budgeting practices are constrain on creativity................................................................9
(5) Recommended budgeting for contemporary organizations for planning and control purpose..........10
CONCLUSION.........................................................................................................................................10
REFLECTION..........................................................................................................................................12
(1) Reflection on the peer reviewed article............................................................................................12
(2) Reflection on the research experience..............................................................................................12
(3) Reflection on learning......................................................................................................................12
REFERENCES..........................................................................................................................................14

INTRODUCTION
Managerial accounting is the method to classify, calculate, assess, interpret and convey
financial data to employees to achieve the objectives of the corporation. It differs from financial
reporting since managerial reporting's potential function is to support the organization's corporate
clients in making better strategic business decisions (Teufel Jr, 2018). Management accounting
deals with the collection of data to enable organizations to assess and prepare for potential
business objectives. Managerial accounting is created to help supervisors prepare for the
potential time period, make the company's choices, and evaluate whether their proposals and
judgments are right. This report based on the peer reviewed journal article and topic is use of
budgeting as a management technique for managing resources. For this selected article of
“Ceremonial budgeting: public participation in development planning at an Indonesian local
government authority”. This report consist of budgeting process and as per the article define
about the budgeting journal scarifies the reason of controlling, planning and evaluating
performance. Moreover, broadly used of top down budgeting and bottom up budgeting and use
in the organisation. Traditional budgeting practices are constantly is better spent and provide
recommendations. At the end, reflect on the findings, experiences and recommendations on this
budgeting process.
MAIN BODY
1. The budgeting process
The budgeting process could be described as a structured business investment
encompassing the advancement, intervention and management of a strategy for the supply of
care and real property which include productive assets, including such time and cash, over a
specified time to ensure required revenue objectives (Tracy, 2008). In different terms, the
budgetary control is the utilization of capital that can then be used to accomplish the company's
defined or assigned goals in the standard manner. Budgeting is the preparation method for
corporate plans by setting financial targets and bringing these into a structured schedule. In other
words, budgeting is the method of determining a corporate accounting targets and developing a
strategy to attain those targets.

Budgeting is understanding and practice and provide a method of how and why the
business would be prepared to conduct, especially financially, if those methods, happenings,
programs are made. When drawing up an action plan, the planner tries to estimate sales and
expense, and therefore productivity. The aim of budgeting to provide a capital situation for the
decision-making process i.e. Something that have prepared for or not are the suggested field
move. Expenditure needs to be closely managed when running a company professionally.
Whenever the marketing budget has been completely invested, the decision on "can we spend
money on ads" is probably "no." Budgeting is intended to allow the ongoing business output to
be calculated it against company performance estimate, i.e. the company that lives up to the
expectations. It should be made explicit and authorized by the appropriate government. This
should be changed or rectified, if conditions change. It performs the character of a business
leading indicator helping to assess the company's success by contrasting real and planned
performance. There are identified some features of budgeting process such as:
It is an estimation of an individual's business sectors being associated with a given future date.
It must be written down and endorsed by the respective person.
This should be changed or rectified, if society changes (Uyar and Kuzey, 2016).
It takes on the role of a company predictor helping to assess the company's success by
contrasting real and planned outcomes.
It's being developed on the basis of previous company experiences and patterns.
It is a way of doing business, used only to predict future the firm's operating transactions and
financial role.
Thus, a budget sets the goals of the company in simple structured terms to prevent
ambiguity, and includes a comprehensive action plan to achieve the goals. It is a way of
communication for which the upper executives utilizes the budget as a tool to convey its
proposals to the supervisors that are to offer them the realistic form. This manages the company's
different operations (such as sales, production, acquisitions, etc.) in just such a manner as to
optimize the use of assets. It also offers a system of monitoring and controlling the organization's

effectiveness, and requires planning with data in a manner of which appropriate remedial
measures can be taken.
2. Budgeting process satisfies the purpose of planning, controlling and evaluating performance
The process of budgeting applies by the Indonesian local government authority for the
development of country and planning about the development. The research is focused on a
conceptual model, and used the phenomenology methodological approach to analyze the impact
of involvement on the budgeting of local governments. While certain involvement processes met
current policies and legislation in form of 'type' the regulation's 'substance' was missing. It has
been seen that engagement in local government budgeting is often considered to be simply a
requirement, performed as part of the ceremony needed to fulfill certain responsibilities of local
government. The budgetary mechanism is mainly formal, as only those members of the
community can obtain information on the project's intention. As per the journal it is satisfies of
purpose of planning and controlling.
Integrating the planning and budgeting processes in the sense of regional budgeting, it is
anticipated that each local authority will strengthen its musrenbang mechanism by increasing
public involvement, directing proposals from Village to Sub district and from sub - district to
viceroy. When the whole data is implemented comprehensive, open, and genuine, then the
regional budget in terms of preparing local budgeting in various local governments in Indonesia's
Malang Raya region. Because Malang Raya does not officially have a city ordinance on public
role in the development of public policymaking, the study concentrated on voluntary engagement
rather than involvement (Andreou, Philip and Robejsek, 2016). To prepare of budget they are
including all the participant that are related with the government and participate in government
work. From assessment and execute participation in the Local Development Planning discussion
board throughout 2010, and the outcomes with in-depth interviews with operatives, this research
reveals that the community is involved in the budgeting procedures in Probolinggo Regency
implement the Participatory Budgeting method (Musrenbang) provided for in Laws No 25 of
2004 and Local Regulation No 13 of 2008 on accountability and involvement in national
development. Different levels of participatory budgeting, including Village-level, Sub-District-
level, Sectoral Forum-level, and Regency-level, continued systematically and adopted the 'form'
required in the regulatory although not the 'pose' of the legislation.

Budgets are needed to showcase the economic consequences of the proposals, identify
the skills needed to meet those plans as well as provide methods of taking measurements,
watching and manipulating the conclusions drawn as compared to the plans. The budget will also
avoid future problems. They offer managers details more about past growth of the company.
These characteristic equation priorities and form a framework for appraisal. They ensure a return
for the organization if it fulfills its targets. The success or failure of a plan resulting from
community input focuses on the extent of guiding it from the town to the inter-district and
participatory budgeting mechanisms at the coronation stage. In the sector, it has been found that
the participatory budgeting process is a direction. The people are facing numerous obstacles to
take charge of the local budget. For example: A Sectoral Forum incorporates the multiple players
involved in the design and the budgeting and planning procedures. This forum addresses goals of
community development generated from the outcomes of participatory budgeting for sub-
districts, together only with local authority input framework, in order to create the local
government framework recovery plan. A distributional discussion board is for: (a)
Synchronization Made regarding to include in the local council action plan system, (b) identify
operation objectives being included in the Local Government project plan system, (c) transfer the
Local Government action plan unit objectives to the local council Fund department (d) Classify
the impact of the training restrictions as regards the unit of local authority systems to support the
realization of the local government unit planned work. The sectoral forum is supposed to
combine the regional and national growth priorities (Tuhari, Fulga and Metelchina, 2017).
Variables from either the Regency Government must also be integrated, in particular details
about the current year though system of tactical local government planning and the system of
county council national plan not executed.
(3) Top down budgeting and bottom up budgeting
Top-down budgeting is the process of financial planning where a high-level funding for
the firm is developed by top leadership. When the top-level figures are formed, quantities are
assigned with their distribution to personal departments and functions which must develop a
comprehensive budget. A top-down strategy in organizational economic growth is driven the
senior executives having a greater-level plan for the project organisation. The cycle begins in the
specific programs with such a bottom-up approach where administrators build a budget, but
instead run it straight for authorization. Top-down budgeting prevents money to run down.

Perhaps of wasting time designing a strategy from development, administrators at lower levels
are provided a well-formulated budget to execute. This saves a lot of time as well as assets the
supervisors would have had to use to establish the budget. Top-down budgeting may be a good
development, as it doesn't involve time to plan the budget for management level. This is a time-
saver for middle positions, which are more interested in the implementation structures than the
business plan as a whole (Houke, 2017). Even so, a budget formulated by someone not intimately
affected with an agency's week and-to-day operational activities may not have been aware of any
specific department-related expenses. It might pose problems for lower-level supervisors who
may not be able to maintain the funds required to meet organizational objectives. When the
budget allocation is approved, funds will be expended accordingly to what has been apportioned.
Deliveries can be ordered, instructors can be compensated and course events can be organized.
Bottom-up budgeting starts at an organization’s edge. Lower-level management agrees
on a budget, then submits it to top manager for approval. Upper executives would either
authorize the budget plan, or email it straight for evaluation and adjustment to management level.
There are many pros and cons about this form of management of the budget. Bottom-up
budgeting may be a positive thing, since smaller budget planning activities depending on the
personal agency's requirements. A department manager is more acquainted with what's required
to meet organizational goal, such as goods, labor, and capital. Lower management, even so, may
not have had the knowledge of generating difficult bank records. Management team may not
have been informed of the organizations risks identified. Due to various upper management
strategies to assign money somewhere else in the company, the budget might not be possible.
Instead of choices taken by someone outside of the organization, the choices are taken by those
nearest to the department. Faculty members and heads of departments just provide
superintendent with a ranking of their expected requirements, and he establishes a budget for the
price of insurance.
In the context of Sectoral forums organisation prepare budget in participative manner in
which include lowering level and top level people. In this organisation they are using method of
top down budgeting and the entire local budget set by the government and accordingly provides
instructions to all the people and organizations that relate with budgeting procedure in direct and
indirect manner. The application of top down budget in context of company Some times before

budgeting process the supervisors could place forth several recommendations for the spending
plan (Uddin, Mori and Adhikari, 2019). Not just whether their commitment to the government's
budget is employed is at the discretion of management. Because after budget has been formed,
the organization makes particular allotments to the various departments, which will then have to
develop their own budgets based on their distribution and objectives. A Musrenbang is a forum
where people can take portion and use a bottom-up approach. The Public inclusiveness and
Village Government Body intends village-level participatory budgeting as a form of media for
all who wanted to spread their desire and priorities. This company has power to supervise the
functioning of the local authority and can encourage participation in the village testing program.
(4) Traditional budgeting practices are constrain on creativity
Traditional budgeting is the process of budgetary control, wherein the expenditure of that
year is chosen to take as the basis. The present year though budget is adjusted by changing
expenditures depending on inflation rate, consumer demands, business condition, etc. by making
adjustments to the prior year though budget. Operating costs from the previous period constitute
an essential part of the existing year's spending plan. Only such components in traditional
budgets which are beyond the last year's spending plan ought to be validated (Daumoser, Hirsch
and Sohn, 2018).
Traditional Budgeting is one of the strategies used by the organization to plan the budget
for the particular time span in discussion when the prior year though budget is assumed to be the
basis for which the current year's expenditure is drawn up, actual current year though budget is
rendered by incorporating this year's expenditure adjustments. Simplification is the only
advantage of heading for that kind of financial planning. If a corporation is following this form
of budgeting, not that everything on the list needs to be rethought. Somewhat less, they can
merely look at past year's expenditures but instead insert / recoup economic growth, economic
environment, falling prices, etc. It is saying that a budget predict the position of many in
following years. As per the Article Indonesian government prepare budget at different level in
which participate all the government members. According to statement it is saying that an
organisation must invest amount in the preparation of budget. Now a day’s most of the
organizations are using traditional budgeting in appropriate manner. Many other individuals and
businesses recommend this method of financial planning because they can sit with whichever

information those who see with each other, and they'll just rapidly prepare a plan. Most people
will look ahead and give the preceding week as a basis for establishing their expenditure /
revenue budget. Whilst also trying to make the budget, they take into account couple variables
that they believe may impact their expenditure or revenues. Those variables can be manageable
or unmanageable at moments. As per the findings of this article it is analyzed that Traditional
budget is beneficial for the local government and at different level.
Offer a solid framework: Since it is focused on a starting point (preceding year though
descriptive statistics), monitoring of the entity's economic activity is simple. Conversely, this
point of reference enables the business to structure its budget on a good, simple to implement
and easy to manipulate structure (Russon Gilman and Wampler, 2019).
Part of the organizational culture: Because it's the simplest costing technique, it shortly has
become part of the company culture. And the process went on and on with forever. If the latest
approach is adopted (e.g. "zero-based budgeting"), so this will be a dangerous growing business.
(5) Recommended budgeting for contemporary organizations for planning and control purpose
In present most of the organizations are using various type of budgeting method that
helps to analysis the position of business and prepare various strategies. As per the article it is
analyzed that all the government using budgeting process for the development and participate in
every level of work. It supports to Indonesia for the development and arrange all things properly
This procedure mainly used for the planning and controlling. Budgets are needed to showcase
the economic consequences of the proposals, identify the skills needed to meet those action plan
and to provide a mechanism of trying to measure, watching and attempting to control the data
gathered as compared to the proposals. The budget can also help stop impending problems
(Cuganesan, 2017).
It is suggested that budgeting is an essential part of the planning and supervision process.
Planning offers a mechanism that containing observations create an action plan, forecast
potential sales and expenses, predict future events, minimize future ambiguity and improve the
likelihood of meeting the organisation ’s objectives by planning preparation. Control is the
method that uses data on student performance of organization, contrasting real outcomes with

expectations, evaluating its variations from programmers and objectives and eventually taking
corrective steps to match all types of activities with the program (budget). Moreover, it is
advised that Planning defines a required outcome while financial planning determines inputs
required for that output to be achieved. Thus company utilizes the design process to set program,
make basic plans and develop goals and aims of an organisation as a whole. Budgeting
organizes, as part of the preparation, the specifics of the many operations required to implement
the systems that meet the corporation's aims and strategies. Budget, which is a plan of action, is
being used to regulate in the process control by measuring the measured operational activities
and showings as they occur with the scheduled (budged) operational activities (Kasdan and
Markman, 2017).
When an organisation can prepare budget so for this require to proper planning and also
control all the business activities according to budget requirements. As a result it helps to get
effective outcomes in specific period of time.
CONCLUSION
As per the above report it has been concluded that in present time budget is essential part
of any business oganisation whether small, medium or large. This report based on the reer
reviewed article in which organizations and government are using this budgeting procedure for
the planning and controlling all over the business activities. If the variance is a consequence of
an unachievable or inaccurate strategy, the strategy (budget) may need to be recalibrated.
Therefore, the management and forecasting method allows organizations to assess how to use
capital, including people, to accomplish specific goals and priorities, and to monitor its use of
funds to reach organizational goals.

REFLECTION
(1) Reflection on the peer reviewed article
As per the article it is experienced that in present time budgeting procedure is followed
by the every type organisation to predict about the future activities. Only at local government in
East Java, Indonesia, city state (Musrenbang) in city design was practiced. Public engagement is
a public policy mechanism in which people are active in the design and preparation of
infrastructure programs in order to achieve good execution. The project is focused on an
interpretivist model, and uses the ethnographic analysis methodology to analyze the impact of
involvement on the financial planning of local governments. At the local government in East
Java, Indonesia, public participation (Musrenbang) in city design was practiced. The budgetary
mechanism is mainly bureaucratic, as only those ordinary citizens are able to access information
about both the nature of the programme, i.e. the broader stakeholder group has low social
interaction. It is reflected that Indonesian government use participation approach in order to
achieve all the results in particular period. While most involvement structures met current
policies and regulations in terms of 'type' the restrication's 'substance' was missing. It was seen
that involvement in county council financial planning is still considered merely a certainty,
carried out as much of a procedure needed to fulfill those local authority responsibilities. As per
the article understand that how government uses of the Ceremonial budget and how to their
people participate in this budgeting procedure. There are defining that how to different level use
the budget and follow a particular budgeting procedure. It is mainly used by the business entity
for the planning as well as controlling in specific manner. It is assessing that the procedure and
operational activities of a government based on the budgeting in which mention all the activities.
According to budgeting they are following that the working activities.
(2) Reflection on the research experience
At the time of research I can face various problems because article must relate with the
budgeting process that occur in any country. At the time of research require to select article in
between 2010 to 2019 as per the requirements. For this research I can make a team and provide
work to every member according to their skills and interest. In particular time period they all
done their activities but face various problem, because it is not easy to collect all the information.

After collection all the information set all the activities in systematic manner and many times
face problem of communication due to different languages. For this we are using translator that
helps to understand their language in proper manner. As per the overall analysis it is
understanding that overall research experience is good and some time is bad but it increase my
knowledge in depth manner that is good for the my project as well as for my study. For the
research we are using different types of strategy that supports to collect all the information in
effective manner and it is required to experience in proper manner. From the this research it is
understanding that budgetary activities mainly based on the each member participation which are
related with the government in direct and indirect manner. For this procedure required to specific
planning and controlling of all the activities in specific manner.
(3) Reflection on learning
During the research I can learn many things and increase my knowledge in proper
manner. It is increasing my knowledge in depth manner and understand about the budgeting
procedure that how to effectively use by the government and companies at different level like
village area, urban area etc. many time state and government focus on every things in proper
manner. I can learn various things that how to communicate with various types of people and
collect information in regard of particular things. It improves my learning power in broad
manner and understands that how effectively utilize all things in systematic way to understand all
the requirement of budgetary procedure in particular government. As per the reflection it is
analyzing that all the activities are part of the project that improve the problem solving skills and
another skill that was require for the business in effective manner.

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Online
Ceremonial budgeting. 2013. [Online]. Avilable through:
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