Abstract:

In the enterprise's management and control activities, comprehensive budget management has gradually become one of the core parts of the company and it is the foundation of the company's performance evaluation. At the same time, the problems of budget slack have become more prominent. Based on the theory of principal-agent theory and information asymmetry, this paper studies the influence of corporate management power and compensation on its budget relaxation.The results show that there is a positive correlation between management remuneration and the degree of the budget slack of the company while management power is negatively related to the degree of budget relaxation. When the two work together, they have a negative effect on the budgetary slack of the company, because the influence of the power is more important.