When doing the master budget for the hotel I work for the manager asked me to add 15 slack to the labor and inventory. Is it illegal to add...

Question

When doing the master budget for the hotel I work for the manager asked me to add 15% slack to the labor and inventory. Is it illegal to add slack to a master budget?

Answer

Is a budget a legal document that's got to be executed under oath? On the other hand does what you're being asked to do conform with recognized accounting practices and rules? It may be a professional issue to falsify a budget if that is used to obtain money on a loan.

Answer

It would depend on the purpose of the document you are preparing. If it is meant to defraud someone, there could be a problem. If not, it is just an internal document used for planning.