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Contingent Factors, Extent of Budget Use and Performance: A Structural Equation Approach
Author(s) -
Uyar Ali,
Kuzey Cemil
Publication year - 2016
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/auar.12090
Subject(s) - structural equation modeling , turkish , contingency , confirmatory factor analysis , contingency theory , covariance , econometrics , order (exchange) , latent variable , business , accounting , computer science , economics , statistics , knowledge management , mathematics , finance , philosophy , linguistics
The present study investigates the contextual factors that impact the extent of budget use and performance based on contingency theory. For this purpose, we carried out a questionnaire survey of Turkish firms. In order to analyse the data, confirmatory factor analysis and covariance‐based structural equation modelling were used. We find that the extent of budget use and performance are affected significantly by contextual factors. Size, structure, perceived environmental uncertainty (PEU) and information technology (IT) determine the extent of budget use. The study also finds that performance is significantly affected by the extent of budget use and other contingent factors (i.e., structure, PEU, functionality of IT). Furthermore, there is a mediating role of budget use between contextual factors and performance.