www.ccsenet.org/ibr International Business Research Vol. 4, No. 4; October 2011 ISSN 1913-9004 E-ISSN 1913-9012 248 The Global Debate on Budgeting: Empirical Evidence from Nigeria Abogun, Segun Department of Accounting and Finance, University of Ilorin, Ilorin, Nigeria Tel: 234-803-915-6876 E-mail: segunstc@yahoo.com Fagbemi, Temitope Olamide Department of Accounting and Finance, University of Ilorin, Ilorin, Nigeria Tel: 234-802-038-2535 E-mail: olamidefag@yahoo.com Received: June 3, 2011 Accepted: July 4, 2011 doi:10.5539/ibr.v4n4p248 Abstract This study provides that though the budgetary system is not perfect, its usefulness cannot be over emphasized. The primary source of data was used and data were collected through the use of questionnaire. A Non-Parametric test -Chi-square test and the descriptive statistics were used for data analysis. The study reveals that budgeting is perceived by managers a worthwhile exercise and a value creation process. It is recommended therefore that, researches should be directed towards budgetary system improvement rather than its total abandonment. Keywords: Traditional budgeting, Budget criticisms, Budget desirability, Nigerian evidence 1. Introduction Budgeting is no new thing in the history of mankind; it is an age long exercise. It is used for virtually all human activities. Most prominent, in an organised economic, social, and political system, the role of budgeting cannot be ignored. Business owners and managers for instance need to budget their resources, which may include everything from raw materials to human resources to facilities and to make the best and most profitable use of what they have to work with. Recent surveys show just how valuable budgets can be (Horngren et al., 2008; Dugdale & Lyne, 2006; Anand et al., 2004). Advocates of budgeting claim that the process of budgeting forces a manager to become a better administrator and puts planning in the fore-front of the manager’s mind. Many seemingly healthy businesses have died because managers could not identify problem in advance or because they failed to monitor and adjust budgets to changing conditions (Horngren et al., 2008). Therefore, it is expected that this study would awaken interest in the efficacy of budgeting within the manufacturing sector of the Nigerian economy as this sector often account for a substantial portion of total economic activities of a nation. It has also been agued that in spite of its wide spread use, the budgetary process is not perfect altogether (Otley et al., 2003). In other word, there are criticisms and debates over the value of budgeting. Recently, a group led by Hope and Fraser in 2001, advocated for what they called “beyond budgeting”. In their opinion, managers should look beyond the traditional budgetary system. They noted that the budgetary process is too time consuming and that the resulting annual budgets, operating and financial are not accurate and hence not relevant- especially in industries where market changes are frequent and unpredictable. In spite of its criticism, some hold the opinion that budgeting remains a useful management tool. These two studies present conflicting issues about the efficacy of the budgeting system. This argument has generated a lot of heat in the accounting profession since the last few years. It has attracted various responses and reactions from various quarters, constituting one of the topmost issues discussed in management accounting literatures and conferences, particularly in developed economies. The issue has not been laid to rest as people keep turning in their contributions by providing evidence from Nigeria, an emerging economy. The questions raised in this study are: 1. What is the extent to which companies in Nigeria operate budget? 2. What is the relevance of budgeting in management and its desirability as perceived by managers/users in Nigeria? The study hypothesised that: 1. Budgeting is not a useful tool for management. 2. Managers are dissatisfied with the budgetary system. The study observed that most of the researches on this area have emanated from the developed world. The researcher is not aware of any empirical study from this part of the world on the debate over the value of budgeting. This study therefore attempts to fill this gap. The remaining part of this study is divided into three sections. The next