Budgeting can be defined as the process which allows us the ability to be able to pay for the process which will allow us to meet our daily needs and requirement in terms of business processes and stability of the company, utilizing the factor of income as efficiently as possible. Expenses can be essential and non-essential in nature. This is why we can say that as a task, budgeting has ethical implications in its formulation and conclusion. The person drawing the budget has to perform ethically, in order to allow the best practices to be followed while we need to consider the matters that hold relevance which includes integrity of the person drawing the contract if the wages are being paid properly and not being skimmed due to budgetary constraints. There is a well developed way to day plan with the proper expenses so that later on, the company does not need to worry about not being able to manage their expenses as well as the fact that some people might present false information, in order to launder money from the company in order to fuel their own benefits. This provides us with the challenge which can be both unethical as well as crucial for the company to deal with properly, in the case the shareholders or the stakeholders get affected in the process. There is a need to maintain ethical practices throughout the process and that requires complete oversight.
In order to draw a good budget, the company should utilize the methods of forecasting and follow a lean system which will allow the company to be able to care towards the essential functions of the company more, while eliminating all the unnecessary functions and day to day processes which will not only allow the company the best possible utilization of resources and capital but also allow the company’s best interests to be followed, with oversight, there is a lesser chance that the person drawing the budget can actually create any ethical elements in the contract and therefore, allow the formulation of the possible budget for the company.