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Enticing Employees to Lie: Using Role Play to Understand and Mitigate Unintended Consequences of Budgeting

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  • Norman T. Sheehan

Abstract

This role play is a short, in‐class interactive exercise that places students in the role of a factory worker who is asked to commit to a future production amount. The role play demonstrates why employees may be tempted to lie when asked to reveal their future productive capacities. The experiential exercise illustrates the tension between using budget information for both planning and control purposes, and then asks students to propose how senior managers may effectively manage this tension. The role play provides an opportunity to enhance students' moral sensitivities as it concludes with a review of the fundamental ethical principles of International Federation of Accountants (IFAC), noting that although budgetary slack is a widespread phenomenon, it clearly violates IFAC's principles.

Suggested Citation

  • Norman T. Sheehan, 2008. "Enticing Employees to Lie: Using Role Play to Understand and Mitigate Unintended Consequences of Budgeting," Accounting Perspectives, John Wiley & Sons, vol. 7(2), pages 165-172, May.
    • Handle: RePEc:wly:accper:v:7:y:2008:i:2:p:165-172
    DOI: 10.1506/ap.7.2.7
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    References listed on IDEAS

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    1. Michael C. Jensen, 2003. "Paying People to Lie: the Truth about the Budgeting Process," European Financial Management, European Financial Management Association, vol. 9(3), pages 379-406, September.
    2. Lukka, Kari, 1988. "Budgetary biasing in organizations: Theoretical framework and empirical evidence," Accounting, Organizations and Society, Elsevier, vol. 13(3), pages 281-301, April.
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