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A model of the antecedents and consequences of perceived environmental
uncertainty (PEU) for behavioral accounting research is presented in this
paper. Within this model, PEU is defined as a strategic-level variable
pertaining to top management's perceptions of uncertainties in the external
environment (e.g., competitors, customers, government regulations). The
role of PEU is differentiated from other constructs that are widely used
in behavioral research (e.g., task uncertainty, role ambiguity). We use
the model to critically evaluate two major streams of accounting research
involving PEU: Duncan-based studies and studies based on the work of Khandwalla,
and Miles and Snow. Those works are critically reviewed, both in terms
of construct operationalization and appropriate model linkages. The paper
concludes with recommendations regarding the use of PEU in future accounting
research.
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This study applied an experimental approach to examine two possible rater-based explanations (overall gender bias and intolerance of ambiguity) for differences in audit managers' performance evaluations of an audit senior based on the senior's gender. Seventy-one audit managers were provided with a description of a substandard performance by either a male or a female senior on an audit engagement. The managers completed an evaluation of the senior's performance on the engagement and two measures of support for the senior on future engagements.
Senior gender was not significant as a main effect. However, managers classified as intolerant of ambiguity rated the female senior's engagement performance lower than the male senior's performance. Ambiguity-intolerant managers also were less likely to support the female senior for future job assignments. Conversely, managers classified as tolerant of ambiguity gave higher ratings to the female senior's engagement performance and exhibited greater career support for the female senior.
These results suggest that tolerance for ambiguity plays an important
moderating role in audit managers' consideration of senior gender in performance
evaluation judgments. Further, to the extent that female audit seniors'
evaluations are influenced by supervisors' tolerance for ambiguity, their
performance evaluations may reflect increased variability over time compared
to male audit seniors' performance evaluations.
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This study examined the use of outcome feedback and task property information
by subjects with relevant domain knowledge to predict the likelihood of
financial distress for various hypothetical companies. For each company,
the subjects saw six financial cues prior to making their predictions.
Performance was determined by comparing the subjects' responses with the
predictions of a regression model derived using the same judgments made
by groups of experienced loan officers. The presence of outcome feedback
improved performance. Task property information interacted with feedback
over time to affect performance. The difference in the results between
this and studies that have failed to show performance improvements with
outcome feedback may be attributed to the ability of the subjects to use
their accounting-domain knowledge to bring meaning to the task.
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Previous accounting research has examined the effect of organizational
commitment (OC) on important organizational consequences, such as job satisfaction
and turnover intentions. To measure an individual's OC, these studies relied
upon the Organizational Commitment Questionnaire (OCQ) developed by Porter
et al. (1974), which operationalizes OC as a unidimensional construct.
Subsequent research in non-accounting settings, however, has established
the possible existence of two (Meyer and Allen 1984) and three (McGee and
Ford 1987) distinct dimensions of OC. The purpose of this paper is to investigate
whether a multidimensional measure of OC exists in a public accounting
setting. The results of a sample of 63 less-experienced and 228 more-experienced
public accounting professionals indicate that multiple measures of OC appear
to exist. In addition, our results suggest that these dimensions of OC
differ across experience levels and have differing effects with important
organizational consequences (job satisfaction and turnover intentions)
across experience levels.
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Rest et al. (1995) have proposed that a new measure of moral judgment
based upon the Defining Issues Test, the N index, is a more valid
metric than the widely utilized P score. This research examines
whether the N index is vulnerable to potential political biases
in the Defining Issues Test. Our results indicate that the N index
is influenced by an imbedded political ideological content in the DIT,
although to a lesser extent than the P score. Furthermore, while
the N index seems to accurately capture the cognitive capacity of
liberal accountants for advanced moral thinking, it understates the comprehension
of moderate and conservative accountants. Importantly, this research examines
the validity of the DIT N index before it attains acceptance as
a measure of moral judgment and makes recommendations that mitigate the
potential for bias.
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This study reports the results of a survey questionnaire sent to small
business owner-managers across the country. Experimental manipulations
investigated how a tax reporting rule either to expense or capitalize an
item influences financial reporting preferences. The results indicate that
those owner-managers who prepare GAAP financial statements for their businesses
may be more likely to capitalize ambiguous expenditures than those who
do not prepare GAAP-based financial statements. Among those who use GAAP
financial statements, owner-managers with controlling interests in the
business are more likely to expense rather than capitalize ambiguous expenditures
while minority owners are less likely to expense. In addition, the GAAP
users who are minority owners are more likely than majority owners to make
financial reporting decisions that are consistent with tax reporting rules.
Although data on small businesses is difficult to obtain, this study provides
some preliminary data on the financial reporting preferences of small business
owner-managers.
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This research examines the effects of economic incentives on the strategic interaction between an auditor and client when a potential going concern situation exists. This experimental economics investigation has the following game structure. The auditor first obtains information relevant in predicting the client's viability and then conveys to the client an intention to express a clean or going concern opinion. A client can switch auditors in an attempt to avoid a going concern opinion and the potential self-fulfilling nature of the auditor's prediction of business termination. This incentive to switch auditors poses a credible threat to the incumbent auditor.
Conducting the test in the laboratory enables us to vary (1) the likelihood the successor auditor will issue a clean opinion and (2) the presence of the self-fulfilling prophecy effect. By varying the levels of these treatments, we are able to test the predicted effect on the audit partner's reporting decision and the client's switching decision.
The results strongly indicate that treatments (1) and (2) both had a
significant effect on subject behavior. However, contrary to the equilibrium
predictions, auditors did not sacrifice their independence as (1) and (2)
increased. Clients, on the other hand, did respond opportunistically by
switching auditors more frequently as (1) and (2) increased. The effect
was strongly significant and was directionally consistent with the analytical
predictions.
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