Nourmaliza, Mirna Indriani, Ratna Mulyany, Mulia Saputra, Hafas Furqani
Budgetary slack continues to pose governance challenges in public sector budgeting, including in government systems operating under Islamic principles. This study investigates the effects of budget participation, budget emphasis, information asymmetry, and group cohesiveness on budgetary slack and examines the moderating role of Islamic religiosity within a Sharia-based public governance system in Aceh, Indonesia. Survey data were collected from 319 provincial, district, and city government officials directly involved in budget preparation and analyzed using partial least squares structural equation modeling (PLS-SEM). The findings indicate that budget participation (β = 0.187; p = 0.004), budget emphasis (β = 0.235; p < 0.001), information asymmetry (β = 0.249; p < 0.001), and group cohesiveness (β = 0.118; p = 0.049) positively and significantly influence budgetary slack, with the model explaining 54.2% of its variance (R2 = 0.542). Islamic religiosity also shows a positive direct effect and significantly strengthens the relationships between budget participation and budgetary slack (β = 0.161; p = 0.003) and between information asymmetry and budgetary slack (β = 0.168; p < 0.001), while it does not moderate the effects of budget emphasis or group cohesiveness. These results suggest that religiosity does not function as a structural safeguard against discretionary budgeting behavior. Instead, agency incentives and information asymmetry remain central in shaping budget outcomes. The findings highlight the importance of reinforcing transparency, accountability frameworks, and internal control systems in Islamic-based municipal and provincial governments to enhance public financial governance. © Nourmaliza, Mirna Indriani, Ratna Mulyany, Mulia Saputra, Hafas Furqani, 2026 This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International license, which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Department of Management, Faculty of Economics and Business, Syiah Kuala University, Indonesia; Department of Accounting, Faculty of Economics and Business, Syiah Kuala University, Indonesia; Faculty of Islamic Economics and Business, Ar-Raniry State Islamic University, Indonesia
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