Senior management establishes guidelines for acceptable expenditures and then allocates a specific amount of money...

A top-down budget process occurs when senior management allocates a specific amount of money to a department and sets guidelines for acceptable expenditures. The department then plans within the allocated funds.

Centralized Control:

Senior management determines budget priorities and allocates resources accordingly.

Guideline-Driven:

Departments operate within pre-established financial boundaries.

Efficiency:

Simplifies the budgeting process by reducing negotiation and iteration at lower levels.

A: Zero-based budgeting starts from scratch and requires justification for all expenses.

B: Bottom-line budgeting focuses on the total expense limit but not on allocation methodology.

D: Bottom-up budgeting involves departments proposing budgets that are then reviewed and approved.

Key Characteristics of Top-Down Budgeting:Why Other Options Are Incorrect:ASIS CPP® References:

Domain 9: Business Principles and PracticesExplains the budgeting methods, including top-down and their implications for resource allocation.