Journal of Research in Business, Economics and Management (JRBEM) ISSN: 2395-2210 Volume 12, Issue 1 available at www.scitecresearch.com/journals/index.php/jrbem 2261 SCITECH Volume 12, Issue 1 RESEARCH ORGANISATION December 17, 2018 Journal of Research in Business, Economics and Management www.scitecresearch.com The Effect of Budget Participation on Budgetary Slack with Information Asymmetry and Organizational Commitment as a Moderating Variable Irma Dwi Pusporini 1 , Haryadi 2 , Eliada Herwiyanti 3 1 BPPKAD Cilacap Regency, Indonesia. 2,3 Faculty of Economics and Business Unsoed, Purwokerto, Indonesia. Abstract This study examines the effect of budget participation on budgetary slack using information asymmetry and organizational commitment as a moderating variable. Hypotheses proposed to this study are budget participation will have a positive effect on budgetary slack, the information asymmetry will have a positive effect on the relationship of budget participation and budgetary slack, organizational commitment will have the negative effect on the relationship of budget participation and budgetary slack. This research is located in Cilacap Regency. Purposive sampling is used to take the samples. The method used in this research is survey method. Data collection method that is used questionnaires method. Data analysis methods that are used linear regression analysis and regression analysis moderation with an absolute difference method. These results shows that budgetary participation has a positive effect on budgetary slack, and the information asymmetry strengthens the effect of budget participation to budgetary slack, additionally, the results show that organizational commitment debilitation the effect of budgetary participation to budgetary slack. Keywords: Budget Participation; Budgetary Slack; Information Asymmetry; Organizational Commitment. 1. Introduction Implementation of regional autonomy causes changes in the area of financial management in the form of budgeting reforms from traditional budget system to performance budget system. In the budgeting process should include the participation in various parties. Budget planning process of participatory model often creates some problems. According to Hansen and Mowen (2007) budget participation has the potential problem on the standard used tend to be too high or too low and there is a tendency manager performs budgetary slack. When subordinates pressed to achieve the targeted budget, it allows the tendency to make budgetary slack. One of the factors that have influence on the emergence of slack is the participation in the budget. Previous research that examined the relationship between budgetary participation and budgetary slack showed inconsistent results. Research conducted Young (1985), Hafsah (2005), Falikhatun (2007), Bangun, et al. (2012) and Ajibolade and Akinniyi (2013) show that the budget participation has a positive relationship with budgetary slack. Unlike Dunk (1993), Ramdeen, et al. (2007), Kren and Maiga (2007) and Ardanari and Putra (2014) who found that high budget participation can reduce the occurrence of budgetary slack. The inconsistency of the results of previous studies allegedly because there are other variables that affect the relationship between participation in the preparation of the budget for the possibility of budgetary slack. Factors that affect the relationship between budgetary participation and budgetary slack are asymmetry of information and organizational commitment.