Company A uses a heavily participative budgeting approach whereas at Company B, top management develops all budgets and imposes them on lower-level personnel. Which of the following statements is false?
A. Budget preparation time will likely be longer at Company A.
B. B's employees may be somewhat disenchanted because although they will be evaluated against a budget, they really had little say in budget development.
C. A's employees will likely be more motivated to achieve budgetary goals than the employees of Company B.
D. Budget padding will likely be a greater problem at Company B.
E. Ethical issues are more likely to arise at Company A, especially when the budget is used as a basis for performance appraisal.
Answer: D
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