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Determinants Of Moral Judgments Regarding Budgetary Slack:An Experimental Examination Of Pay Scheme And Personal Values, Jessen L. Hobson, Mark J. Mellon, Douglas E. Stevens

Accountancy Faculty Publications

We study moral judgments regarding budgetary slack made by participants at the end of a participative budgeting experiment in which an expectation for a truthful budget was present. We find that participants who set budgets under a slackinducing pay scheme, and therefore built relatively high levels of budgetary slack, judged significant budgetary slack to be unethical on average, whereas participants who set budgets under a truth-inducing pay scheme did not. This suggests that the slack-inducing pay scheme generated a moral frame by setting economic self-interest against common social norms such as honesty or responsibility. We also find that participants who …