ABSTRACT
We experimentally investigate how subordinates’ budget reporting in hierarchical organizations is influenced by social distance between subordinates and their direct manager. Although prior ...research promotes reducing this social distance to improve cooperation and efficiency, we contend that reduced social distance can differentially influence budget reporting, conditional on the manager’s stake in the residual claim. As predicted, we find through two studies that the effect of reduced social distance changes from increasing subordinates’ honesty to decreasing subordinates’ honesty as the manager’s stake in the residual claim decreases. We also find that subordinates’ concern for the manager’s economic well-being and concern about the manager’s impression of their reporting behavior mediate these results. The implications of our findings for management accounting theory and practice are discussed.
Data Availability: Please contact the authors.
JEL Classifications: C91; D91; M41.
We experimentally investigate how increases in legally required minimum wages affect wage offers, wage premiums (i.e., the excess of wages over the minimum wage), and employee effort. Prior research ...has documented a gift-exchange relationship between firms and employees, whereby higher wage offers lead to higher effort. However, when the minimum wage increases, expectations regarding gift wages may also change. We predict that, following such a change, firms and employees will self-servingly determine their reference point for gift wages. As a result, while firms will increase wage offers, wage premiums will decline, and thus employees will not increase their effort. The results of (1) a laboratory experiment and (2) two online experiments are consistent with our predictions, suggesting that minimum-wage increases can have a negative effect on employee effort. Ultimately, employees respond to equivalent wages differently depending on the context surrounding the wage level. Implications for theory and practice are discussed.
This study uses two experiments to investigate the honesty of managers’ budget reports when the financial benefit resulting from budgetary slack is shared by the manager and other non-reporting ...employees. Drawing on moral disengagement theory, we predict that the shared interest in slack creation makes misreporting more self-justifiable to the manager and, therefore, leads to lower honesty. Consistent with our prediction, the results of our first experiment show that managers report less honestly when the benefit of slack is shared than when it is not shared, regardless of whether others are aware of the misreporting. Our second experiment investigates whether the preferences of the beneficiaries of the slack affect managers’ honesty. We predict that managers’ honesty will be improved when the beneficiaries of the slack have a known, higher-order preference for truthful reporting. Consistent with our prediction, the results show that managers report more honestly when other employees have a known preference for honesty than otherwise. The implications of our findings for management accounting research and practice are discussed.
ABSTRACT
This paper reports the results of three studies (archival, experimental, and qualitative) designed to examine the effects of auditor narcissism on auditor‐client negotiations in China. We ...contend that narcissistic characteristics fuel auditors' competitiveness and embolden them to stand firm in negotiations, potentially lengthening the negotiation process but leading to more conservative negotiation outcomes. As predicted, our archival results suggest that auditor narcissism is positively associated with audit delay and negatively associated with clients' absolute and positive discretionary accruals. Our experimental results document that narcissistic auditors are more likely to be involved in negotiations that reach an impasse or take longer to resolve and that narcissistic auditors negotiate reported asset values that reflect less aggressive reporting choices. Our qualitative results from field interviews with practicing audit partners corroborate our archival and experimental findings. Overall, the data collected using three different research methods yield consistent results in support of our theory. Our findings shed light on factors that influence audit efficiency and quality in China. We discuss the key cultural and contextual differences between China and the West as well as the implications of these differences for future research.
RÉSUMÉ
Le rôle du narcissisme de l'auditeur dans les négociations auditeur‐client : données chinoises
Les auteurs font état des résultats de trois études (une étude d'archives, une étude expérimentale et une étude qualitative) consacrées à l'analyse des effets du narcissisme de l'auditeur sur les négociations auditeur‐client en Chine. Ils postulent que les caractéristiques narcissiques des auditeurs nourrissent leur compétitivité et consolident la fermeté de leur position dans les négociations, ce qui risque de ralentir le processus de négociation mais aussi de conduire à une issue plus conservatrice de ces négociations. Conformément aux prévisions, les résultats de l'étude d'archives semblent attester l'existence d'un lien positif entre le narcissisme de l'auditeur et le retard de l'audit et d'un lien négatif entre ce narcissisme et les ajustements discrétionnaires absolus et positifs des clients. Selon les résultats de l'étude expérimentale, les auditeurs narcissiques sont davantage susceptibles de prendre part à des négociations qui se soldent par une impasse ou dont l'aboutissement exige davantage de temps, et ils négocient la présentation des actifs à des valeurs reflétant des choix moins audacieux en matière d'information financière. Enfin, les résultats de l'étude qualitative, qui proviennent d'entrevues menées sur le terrain auprès d'associés d'audit en exercice, corroborent les conclusions de l'étude d'archives et de l'étude expérimentale. Dans l'ensemble, les données recueillies au moyen de trois méthodes de recherche différentes livrent des résultats cohérents à l'appui de la théorie des auteurs. Ces conclusions font la lumière sur les facteurs influant sur l'efficience et la qualité de l'audit en Chine. Les auteurs traitent des principales différences culturelles et contextuelles entre la Chine et l'Occident, ainsi que des répercussions de ces différences sur la recherche future.
Organizations often promote procedural justice by increasing the transparency of managerial decisions and encouraging employees' voice in the decision process. We experimentally investigate how ...implementing these control policies in hierarchical organizations (owners vs. managers vs. employees) affects managers' resource-allocation decision and employee effort. We predict and find that managers allocate more resources to employees, lowering owners' return, when the allocation decision is transparent than when it is not transparent, despite being incentivized to increase owners' return. Further, managers allocate more resources to employees when employees can voice their desired outcome than when employees' voice is not allowed, but only if the allocation decision is transparent. Managers' intention to exchange gifts with employees mediates these effects. We also find that, when employees have a voice, their effort is influenced by whether the allocation reaches their desired level. The implications of our findings for management control theory and practice are discussed.
This paper investigates the effect of vivid language on investor judgments. Recent research finds that investor judgments are significantly influenced by disclosure tone (positive versus negative). ...Holding tone constant, we investigate investors' reactions to vivid versus pallid information. Drawing on theories from psychology, we predict that investors will be sensitive to the differences between vivid and pallid language when the underlying information is preference inconsistent, but not when the information is preference consistent. Results of two experiments support our prediction. Vivid language significantly influences the judgment of investors who hold contrarian positions (i.e., short investors in a bull market and long investors in a bear market). Interestingly, vivid language has limited influence on the judgment of investors who hold positions consistent with the general tenor of the market. Our results provide evidence regarding when vividness matters and when it does not in financial contexts, thereby contributing to both psychology and a growing literature on disclosure tone in financial reporting. In addition, our results also speak to concerns raised by regulators and academics asserting that vivid language can inflate bubbles and incite panics.
ABSTRACT We experimentally investigate how managers' decisions to invest discretionary resources in the company's corporate social responsibility (CSR) initiatives are affected by whether the ...investment decision is denominated in financial or nonfinancial measures (i.e., the measurement basis used for decision making). We posit that nonfinancial measures bring attention to the society-serving nature of CSR investments, thus activating the pro-CSR social norms of the company and managers' personal CSR norms. Norm activation, in turn, influences managers' investment decisions to the extent that social norms are congruent with personal norms. As predicted, we find that the level of CSR investment is higher under a nonfinancial measurement basis than under a financial measurement basis, but only when the manager is personally supportive of CSR. Supplemental analysis indicates that CSR-supportive managers continue to invest more under a combined financial/nonfinancial measurement basis than under a financial measurement basis only. Theoretical and practical implications are discussed. JEL Classifications: C91; M41.
Epilepsy is a disease characterized by recurrent, episodic, and transient central nervous system (CNS) dysfunction resulting from an excessive synchronous discharge of brain neurons. It is ...characterized by diverse etiology, complex pathogenesis, and difficult treatment. In addition, most epileptic patients exhibit social cognitive impairment and psychological impairment. Iron is an essential trace element for human growth and development and is also involved in a variety of redox reactions in organisms. However, abnormal iron metabolism is associated with several neurological disorders, including hemorrhagic post-stroke epilepsy and post-traumatic epilepsy (PTE). Moreover, ferroptosis is also considered a new form of regulation of cell death, which is attributed to severe lipid peroxidation caused by the production of reactive oxygen species (ROS) and iron overload found in various neurological diseases, including epilepsy. Therefore, this review summarizes the study on iron metabolism and ferroptosis in epilepsy, in order to elucidate the correlation between iron and epilepsy. It also provides a novel method for the treatment, prevention, and research of epilepsy, to control epileptic seizures and reduce nerve injury after the epileptic seizure.
This study investigates whether discretion in information acquisition affects managerial reporting, enabling opportunistic self-interested behavior, which may erode firm value.1 Information ...acquisition, including gathering, screening, and editing information, is an important aspect of the functioning of accounting systems (Ewusi-Mensah 1981; Hertog and Wielinga 1992; Woodward 1997). Organizations often delegate responsibility for information acquisition to local managers because, in today's industrialized environments, the effective acquisition of information requires the specialized knowledge and expertise of the local manager (Balakrishnan 1991; Choudhury and Sampler 1997). Such delegation also allows the manager to participate in the development and implementation of information systems, which may increase the manager's satisfaction and perceptions of procedural justice (Hunton and Gibson 1999; McGowan and Klammer 1997). While there are benefits to discretion, we investigate a potential cost. Specifically, we investigate whether allowing managerial discretion results in more opportunistic reporting by managers.
More than 5000 landslides with different kinds of deposit-bedrock interface morphologies developed in Three Gorges Reservoir area (TGR) after its first impoundment. In this paper, the Outang ...landslide, a typical accumulation landslide with a chair-like deposit-bedrock interface (CLDBI) located in the Three Gorges Reservoir area (TGR) of China, is taken as an example. More than 6 years of multi-technique monitoring data shows that cumulative displacements over time present a step-like pattern, characterized by the gradual increasing of total displacements with altitude. The factors affecting the slope movement at the upper and the lower parts of the landslide are rainfall and reservoir water, separately. In this work a novel drainage anti-slide pile (DASP) is proposed, and the drainage performance of this DASP is verified and studied through physical model test. To this aim, three different environmental scenarios have been simulated by ABAQUS to evaluate the reinforcement effect induced on the landslide when using the proposed DASP. The model revealed that the optimum solution for the stabilization of the slope consists in the construction of single-row DASPs in the upper part of the landslide. These results provide practical experience and enlightenment on common measures to landslide prevent in TGR using the DASPs.
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