Why you shouldn't lie to a firm about cross-offers
Students interested in consulting or banking: When you're a student going through recruitment, it's tempting to tell a firm that you have offers from dozens of firm across the board, all eagerly awaiting your response to the offer letters that they have practically thrown at you and are begging you to sign. I'd like to give you a quick and simple example of why this is a bad idea.
During a conversation with a friend who works at a large investment bank:
"Yeah, so we were in the middle of recruitment and had just done our final rounds. One of our candidates calls us up and says 'Hey, I've got an offer from Macquarie, when can I expect to hear back from you?'. My buddy works at Macquarie and they hadn't given out many offers so I called him up. 'Hey, did you guys gives this guy an offer?'. 'Uh, no, who is this clown? We only gave two offers'."
Long story short, this student had done just fine in their final-round interview but was still being assessed relative to other candidates. His ethics were called into question and he got dinged.
Remember, the business world is small. The students who recruit for consulting firms and investment banks know each other, especially in smaller schools. You should fully expect that when you apply to a firm, the consultants there have friends at every other firm. Letting a firm know that you're in the recruitment process with their competitors is fine, but lying about an offer is a lot of potential downside for a very small upside.