Behavioral Research in Accounting
Published annually by the Accounting, Behavior and Organizations Section of the AAA

2001, Volume 13


This page was last updated on August 29, 2001 .
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The Relative Importance of Management Fraud Risk Factors

Barbara A. Apostolou
Louisiana State University
John M. Hassell
Indiana University Indianapolis
Sally A. Webber
Northern Illinois University
Glenn E. Sumners
Louisiana State University

In an exploratory study, we report how 140 auditors rate the relative importance of 25 risk factors (red flags) identified in SAS No. 82. The Analytic Hierarchy Process (AHP) is used to produce a decision model for each subject, and mean decision models are reported for groups of subjects. The results indicate that management characteristics and influence over the control environment red flags were approximately twice as important as operating and financial stability characteristics red flags and about four times as important as industry conditions red flags. The three single most important red flags account for almost 40 percent of the total decision weight. A particularly interesting finding is that the mean decision models of 43 Big 5 auditors, 50 regional/local-firm auditors, and 47 internal auditors were not significantly different from each other.

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The Relationship between Auditor Characteristics and the Nature of Review Notes for Analytical Procedure Working Papers

Brian Ballou
Auburn University

This study investigates the auditor characteristics that are related to generation of evidence and documentation review notes by reviewers of audit working papers. To address this question, an analysis was conducted on the contents of review notes prepared in a laboratory experiment. The working papers contained no documentation deficiencies but contained insufficient evidence. As part of an effective review process, the auditor should generate review notes that call for additional evidence gathering. Generating documentation-oriented review notes created inefficiencies for carrying out the review process and corresponding audit task. Stepwise multiple regression analyses identified reviewer characteristics that were significantly associated with each type of review note. These results provide insights into the reviewer characteristics associated with focusing attention on one review-note classification instead of the other. This finding suggests opportunities for future research that more thoroughly explores and controls for the variables identified in this study.

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A Research Note concerning Practical Problem-Solving Ability as a Predictor of Performance in Auditing Tasks

James Lloyd Bierstaker
Sally Wright
University of Massachusetts Boston

The ability to recognize when there is a variety of solutions to a particular situation has been shown to be important to success in the accounting profession (Baril et al. 1998). Recently, a measure of ability has been developed in psychology that focuses on “practical” problem-solving ability (PPSA) (Devolder 1993). From a theoretical standpoint, relatively little is known about the association between ability and performance in accounting tasks. Thus, the purpose of this study is to investigate if PPSA predicts performance on two important auditing tasks, internal-control-evaluation and analytical procedures. Participants in this study (66 auditors and 78 accounting students) assessed vignettes of real-world financial problems and provided solutions to these problems. Participants also solved an analytical procedures and internal-control-evaluation task. The results suggest that PPSA was useful in predicting the performance of both accounting students and experienced auditors on both analytical procedures and internal-control evaluation. This is the first accounting study to examine PPSA. Practically, results suggest it may be important to attract students with high PPSA into the accounting profession.

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An Analysis of Statistical Power in Behavioral Accounting Research

Susan C. Borkowski
Mary Jeanne Welsh
Qinke (Michael) Zhang
La Salle University

Attention to statistical power and effect size can improve the design and the reporting of behavioral accounting research. Three accounting journals representative of current empirical behavioral accounting research are analyzed for their power (1 – b), or control of Type II errors (b), and compared to research in other disciplines. Given this study’s findings, additional attention should be directed to adequacy of sample sizes and study design to ensure sufficient power when Type I error is controlled at a=.05 as a baseline. We do not suggest replacing traditional significance testing, but rather augmenting it with the reporting of b to complement and interpret the relevance of a reported a in any given study. In addition, the presentation of results in alternative formats, such as those suggested in this study, will enhance the current reporting of significance tests. In turn, this will allow the reader a richer understanding of, and an increased trust in, a study’s results and implications.

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National Culture and the Implementation of High-Stretch Performance Standards: An Exploratory Study

Chee W. Chow
San Diego State University
Tim M. Lindquist
University of Northern Iowa
Anne Wu
National Chengchi University

This study explores how national culture affects employees’ reaction to different modes of implementing high-stretch performance standards. An experiment was performed using Chinese and U.S. nationals to represent cultures that diverge on two relevant dimensions: power distance and individualism/collectivism. Consistent with culturally based expectations, Chinese nationals more readily accepted imposed high-stretch performance standards—relative to U.S. nationals—as manifested by the degree to which they performed up to those standards. Also, differences were found between Chinese and U.S. nationals’ satisfaction with high-stretch performance standards under autocratic vs. consultative participation in the standard-development process. However, further analysis was unable to dismiss the possibility that this result, which was based on subjects’ self-reports on Likert-scale questions, could have been an artifact of cross-national, response-set bias. Other findings indicated that national-culture effects arose in more complex ways than were originally conceived.

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A Research Note on the Effects of Gender and Task Complexity on an Audit Judgment

Janne Chung
York University
Gary S. Monroe Edith
Cowan University

This study examines the effects of gender and task complexity on the accuracy of audit judgments. Because research in cognitive psychology and marketing suggests that females may be more accurate decision makers in complex decision tasks, we hypothesize that there will be a significant interaction between gender and task complexity on the accuracy of an audit judgment. A 2 × 2 full factorial experiment (males/females by high-/low-task complexity) was carried out. The number and consistency of cues was manipulated to create the high- and low-complexity conditions. Participants were required to judge whether an inventory balance was fairly presented based on case material that contained a material misstatement in the inventory account balance. The results support the hypothesis.

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Linking Participative Budgeting Congruence to Organization Performance

B. Douglas Clinton
Central Missouri State University
James E. Hunton
University of South Florida

This study proposes and tests a research framework that links the perceived need for participation (PNP) and the degree of participation allowed (DPA) to organizational consequences. We examine the extent of agreement between PNP and DPA, which is defined as the degree of participation congruence (DPC), and link DPC to organizational performance. Survey data were collected from 386 accountants across three industries. Consistent with prior research, the correlation between organizational performance indicators and DPA was weak in this study, as was the correlation between PNP and organizational outcomes. However, the correlation between the DPC and organizational performance indicators was uniformly positive and significant. Research findings suggest that participation congruence may be a critical success factor in designing an effective participative budgeting strategy.

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Role Stress, the Type A Behavior Pattern, and External Auditor Job Satisfaction and Performance

Richard T. Fisher
Lincoln University

This study examines the relationship between elements of role stress and two important external auditor job outcome variables: job satisfaction and performance. The study extends prior research by examining the moderating influence of the Type A behavior pattern on these relationships. The need to re-examine the linkages between the elements of role stress and both job satisfaction and job performance using theoretically based moderators, such as the Type A behavior pattern, has been highlighted in the role-stress literature. Analysis of survey data confirmed that both role conflict and role ambiguity are significantly negatively associated with auditor job performance and job satisfaction. However, the expected moderating role of the Type A behavior pattern on the relationships between the components of role stress and job satisfaction and auditor job performance was not found. Interestingly, however, a direct positive relationship between the Type A behavior pattern and both job outcome variables was apparent. The latter result suggests that, among audit professionals, Type A individuals tend to outperform and be more satisfied with their employment than Type Bs.

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Mitigating the Common Information Sampling Bias Inherent in Small-Group Discussion

James E. Hunton
University of South Florida

Gathering problem-relevant information through small-group discussion is one method for initial decision making. A collective information sampling (CIS) model offered by Stasser and Titus (1987) suggests that two inherent biases, the common information sampling bias and a related recency effect, act in concert to suboptimize the efficacy of group discussion. The objectives of this exploratory study are to refine the predictive validity the CIS model and test a group intervention technique designed to mitigate the common information sampling and recency biases.

Analysis of the evidence from a laboratory and field experiment suggests that the refined CIS model accurately predicted the distribution of information items entered into group discussion. While the control groups exhibited both the common information sampling bias and primacy effect, these biases were mitigated in the treatment groups after receiving an intervention technique called Shared Cognition Awareness Training (SCAT). Results obtained from this exploratory research indicate that the refined CIS model can offer researchers a useful prediction tool and the SCAT intervention technique presents a relatively straightforward means of invoking a more complete exchange of potentially valuable information during small-group discussion.

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An Examination of Perceived Barriers to Mentoring in Public Accounting

Steven E. Kaplan
Arizona State University
Annemarie K. Keinath
Indiana University Northwest
Judith C. Walo
Central Connecticut State University

While both mentoring and peer relationships exist among some auditors in public accounting, little is known about these relationships. The purpose of this paper is to provide evidence on perceived barriers to mentoring and peer relationships in public accounting. Analysis of responses indicated three interpretable factors representing barriers to forming mentoring relationships. First, participants without a mentor perceived greater barriers from access to mentors and from willingness of the mentor. Gender differences were significant in all three factors. Partners perceived barriers from access to mentors to be lower than those perceived by the other ranks. Finally, willingness of the mentor was perceived to be a greater barrier by local firm participants than by intermediate or Big 5 firm participants.

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Multiple Dimensions of Organizational Commitment: Implications for Future Accounting Research

Alice A. Ketchand
Sam Houston State University
Jerry R. Strawser
University of Houston

Organizational commitment (OC) is a concept that seeks to capture the nature of the attachments formed by individuals to their employing organizations. Beginning with Porter et al. (1974), prior researchers have attempted to identify what factors influence the formation of OC in individuals and how OC (once formed) influences important organizational consequences. Recent research in the industrial/organizational psychology and organizational behavior literature has identified the existence of multiple dimensions of OC and found different relationships between these dimensions and important organizational consequences. However, with some isolated exceptions (Ketchand and Strawser 1998; Kalbers and Fogarty 1995; Caldwell et al. 1990), accounting research has examined only one dimension of OC. This manuscript summarizes previous research in the industrial/organizational psychology, organizational behavior, and particularly accounting literature regarding the identification of various dimensions and subdimensions of OC and the relationships of these dimensions and subdimensions with important antecedents, correlates, and consequences. In light of these findings, suggestions are provided for accounting researchers to evaluate: (1) the role of multiple dimensions of OC in influencing attachment to the organization, (2) how changes in the public accounting work environment affect the role of OC, and (3) how OC research can provide practical results for public accounting firms.

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A Descriptive Analysis of the Content and Contributors of Behavioral Research In Accounting 1989–1998

Michael Meyer
Southeastern Louisiana University
John T. Rigsby
Mississippi State University

This paper provides a description of the topical content and research methods used in BRIA during its first ten years using a modified Birnberg and Shields (1989) taxonomy of the “schools” of behavioral research, leading to an analysis of the impact of BRIA on the accounting literature. The authors and their schools of affiliation and degree are then examined. Next, cites used in BRIA are analyzed, and the most-cited authors, articles, and journals are indicated. The journals cited in BRIA are also ranked, both by total citation count over the ten-year period, and using a modal citation age in BRIA of four years, to show a change in the citation pattern in BRIA. In addition, we examine the extent to which BRIA is cited in four leading accounting journals, i.e., The Accounting Review; Contemporary Accounting Research; Accounting, Organizations and Society; and AUDITING: A Journal of Practice & Theory. Finally, findings and conclusions of the study are discussed.

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