What is the role of top management in a participative budgeting system?
A) Top management has no role-the budget is entirely developed by the lower-level employees.
B) Top management must always tighten employee-set budget standards to eliminate employees' attempts to build slack into the standards.
C) Top management must ensure that employee-generated objectives are consistent with those of the company.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

Top management is responsible for setting the overall objectives and goals of the company. In a participative budgeting system, they must ensure that the objectives generated by employees are consistent with those of the company. They should also provide guidance and support to ensure the successful implementation of the budget. Option A is incorrect because top management plays a significant role in participative budgeting by setting guidelines and approving the final budget. Option B is incorrect because top management should not automatically assume that employees are trying to build slack into the budget. Option D is incorrect because only option C is correct.

What Is the Role of Top Management in a Participative