Moderating effects of Machiavellianism, management control, and fairness on a motivation-honesty relationship in budget reporting

Abstract

Existing research on the influence of motivation on an honest budget has overlooked the roles of certain dark personality traits, management control, and perceived fairness. This study aims to explore the moderating role of Machiavellianism, management control, and fairness in the relationship between internal and external motivation and honest budget reports. This paper comprised two experiments that evaluated the main effect of motivation and moderator effects of the above factors. The first experiment involved 72 graduate students from various Indonesian universities studying accounting or financial management, and the second experiment included 261 undergraduate students from similar fields. Participants were divided into internal and external motivation groups, further randomized into fairness and management control groups, creating eight distinct groups. Each group received a specific scenario corresponding to their allocated group. The results demonstrated that internal motivation had a stronger influence on honest reporting than external motivation (F (1, 257) = 60.36, p < 0.001). However, Machiavellianism weakened this relationship (F (3, 257) = 6.24, p < 0.05). Under complete management control and perceived fairness scenarios, individuals driven by internal motivation reported budget more honestly compared to those with external motivation group under basic management control and perceived unfairness scenarios (F (4, 253) = 4.95, p < 0.001). This analysis contributes to understanding honest budget reports by distinguishing between internal and external motivations and recognizing the moderating roles of Machiavellianism, management control, and fairness. These insights could help organizations design effective budgeting systems and control mechanisms to reduce budgetary slack and improve performance.