For US-style exempt/salaried employees, I agree with you. But when you're being paid to do a job where you're required to record the hours you work (which then go toward billing a client for time spent), then it's absolutely not ok to lie about the hours you work.

The company in question is an accounting firm; imagine if you hired that firm to do your personal taxes, and the person who was doing them inflated the number of hours it took, and then the firm billed you more than it actually cost them to do the work. I know I'd be outraged if that happened. I'd sue them, never use them again, and tell everyone I know not to use them.

Or a more apt example, considering your profession: imagine you're a software engineering manager at a software consulting firm. Your reports do work for a variety of your company's clients, and they have to record how much time they spend working on each client's work so that the client can be billed appropriately. Let's say that your reports are even paid a salary, and aren't paid hourly, even though they have to track their time. I personally don't think it's ok to bill a client for the time someone is doomscrolling Twitter or replying to personal email. But I agree with you that it should be fine that your people aren't generating billable hours every minute of every day. But they have to be honest about that on their timesheets.