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Can Honesty Reminders Reduce Dishonesty in Budgetary Slack?

Wilfred W. H. Cheng (Oxford University, UK)

Chee Yeow Lim (Singapore Management University, Singapore)

Katherine C. K. Yuen (Singapore Management University, Singapore)

Advances in Management Accounting

ISBN: 978-1-80382-032-3, eISBN: 978-1-80382-031-6

Publication date: 18 January 2023

Abstract

This study investigates the effect of honesty reminders on budgetary slack. Based on self-concept maintenance theory, the authors posit that honesty reminders can reduce budgetary slack by making people more aware of their own standards of honesty, resulting in more honest behavior. Using an experimental research design, the authors find evidence that honesty reminders reduce budgetary slack. The authors also find that although penalties can similarly reduce budgetary slack, they tend to cause distrust and resentment from subordinates. Therefore, honesty reminders may be a less costly method than penalties for reducing budgetary slack.

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Acknowledgements

Acknowledgments

We gratefully acknowledge the helpful comments and suggestions from Professor Hun-Tong TAN. We are very thankful for the assistance of all the participants, many of whom are alumni who took time to return to the university to participate in the experiment. This paper was developed based on the PhD dissertation of the third author supervised by the second author. The project was approved by the Institutional Review Board (Approval Number: IRB-16-043-A048(516)).

Citation

Cheng, W.W.H., Lim, C.Y. and Yuen, K.C.K. (2023), "Can Honesty Reminders Reduce Dishonesty in Budgetary Slack?", Akroyd, C. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 34), Emerald Publishing Limited, Leeds, pp. 203-226. https://doi.org/10.1108/S1474-787120220000034008

Publisher

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Emerald Publishing Limited