This study explores the impact of behavioral biases on budget decisions in managerial contexts, a critical but understudied area of management accounting. Budgeting is a cornerstone of financial planning and resource allocation, but cognitive and emotional biases such as overconfidence,
anchoring, loss aversion, and confirmation bias can distort managerial judgment. These biases undermine the accuracy of budgets, distort strategic objectives, and lead to inefficient use of resources. By adopting a multidisciplinary approach, this research integrates behavioral economics and management accounting principles to propose a conceptual framework for identifying and mitigating biases in budget processes. Through a literature review, case study analysis, and qualitative research, the study reveals how these biases manifest in practice and assesses their organizational consequences. Practical solutions, including structured decision-making processes, behavioral training, and datadriven tools, are recommended to enhance budget accuracy and effectiveness. By linking theoretical insights to practical applications, this research contributes to the growing field of behavioral management accounting and provides actionable strategies for improving decision making in dynamic business environments.
