Solution 1:

Either is correct, and in this context they mean the same thing.

Generally, "he went along" emphasizes the continuous act of going, spread out over time, whereas simply "he went" only draws attention to the fact that he went. However, in your sentence, the word "as" makes them mean the same thing. With or without along, "as he went along" means during the time in which he was going.

So there's a difference between he went and he went along, but there's little if any difference between as he went and as he went along.

Solution 2:

The correct sentence would be:

At work, he made up lies as he went along.

Both "went" and "went along" are correct, but "went" is the abbreviated version of "went along." However, "go" and "goes" as you originally had, would not make sense in this tense.

Solution 3:

To my ear (I have no source), "as he went along" makes the lying it seem less purposeful or planned than "as he went". Maybe it's just the informality of the language that creates that sense.