Summary of Panel Discussion
Current Issues in Accounting and Auditing—
Behavioral Research

One of the two opening panel sessions at the conference was Current Issues in Accounting and Auditing-Behavioral Research. The panel was moderated by Rich Houston (The University of Alabama) and panel members were Joan Luft (Michigan State University) and Todd DeZoort (The University of Alabama). Rich Houston opened the session by addressing a variety of topics, including research opportunities provided by the Sarbanes-Oxley Act and other related developments. He mentioned that many open questions lend themselves to essays or survey methods. In addition, because the Act makes so many changes, well-designed behavioral experiments can be used to examine which changes affect various issues, including user confidence in financial statements. Rich also talked about nontraditional resources (e.g., business columns in the New York Times and New Yorker magazine) as well as opportunities related to replicating prior findings.

Panel on Current Issues in Accounting and Auditing-Behavioral Research

Joan Luft's talk focused on management control issues. In addition, she discussed how researchers could take advantage of their intellectual capital (e.g., knowledge about judgment and decision making, ethics, values) to address a variety of research issues. Joan highlighted research opportunities related to decision makers' decisions about what people learn from accounting reports as well as how these reports are used for monitoring. Todd DeZoort and Joan, at this point, also discussed the importance of examining the interaction between expertise and ethics, perhaps considering the interaction of such important dimensions as integrity, objectivity, knowledge, and ability. For example, it may be that, when expertise is insufficient, decision makers will rely on ethics.

Joan also addressed several issues related to performance measures, including mental models within which measures are interpreted, and matters related to causation, tradeoffs, and judgments in an environment in which there are multiple imperfect measures of the same items. Joan also mentioned research possibilities involving leading indicators of performance in reward systems and decision making. She also stated that field studies can contribute much in the way of institutional knowledge, because we as researchers often do not know enough about how businesses work and how accounting information is used. Such knowledge could allow us, as researchers, to design and conduct better experiments.

Todd DeZoort highlighted the need to define what corporate governance is, highlighting the Institute of Internal Auditors' definition of governance as a "four-legged table." He also mentioned the need to understand changes in how corporate governance operates, including internal auditors' roles and methods. Research also does not address adequately how groups and teams function in corporate governance settings, including issues such as negotiation and compromise. Todd also cited the need to develop better measures of ethics and morals, highlighting the need to move beyond the Defining Issues Test (DIT) as a measure for morals. He also mentioned how technology (e.g., the Internet) can be used to obtain research participants or perhaps make it easier for participants to participate in experiments. He finished his talk by stating that certain theories require additional testing in accounting settings (e.g., prospect theory, attribution theory, pressure), and how behavioral theories can be used in archival studies.

The open discussion focused on data collection and research method issues, including data collection and how to obtain participants. People also discussed the pros and cons of Internet or email versus paper research materials, and various issues related to human subjects committees. A question from an audience member led to a discussion of field studies and their generalizability. People agreed that field studies can provide interesting insights, but that researchers should be careful when generalizing from field studies to larger populations.