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The papers published in this issue are a subset of those presented at the Conference. They are representative of some of the most recent behavioral research in several disciplines. Before being accepted for publication, the papers were subjected to additional review processes (beyond that used in accepting papers for the conference). Selection for the journal was based on quality, originality, and the perceived contribution to behavioral accounting.
In addition to the research papers, this edition of Behavioral Research in Accounting also contains the comments of Dennis R. Beresford, Chairman of the Financial Accounting Standards Board (FASB) as well as comments on each paper by conference discussants. In particular, the reader should note that Mr. Beresford requests academic researchers to consider how research could be of assistance to the standard-setting process used by the FASB. The ABO section has developed an ongoing vehicle for communicating both research findings and standard setters' needs, this being the first step in the process. We believe that behavioral researchers are in a unique position to bridge the gap between the practitioner's need for answers to realistic and pragmatic problems and the academician's expertise.
As with all conferences and special issues, the Frontiers of Behavioral Research conference and this special issue of Behavioral Research in Accounting are the results of many people who selflessly contributed their time, talent, and energy. In particular, we would like to acknowledge the efforts of the conference committee members: Jeffrey Shields and Larry Killough; reviewers, discussants, moderators and participants of the conference; and the support provided by the executive officers of the ABO section led by Section President Don W. Finn.
Gail B. Wright, Co-editor
Bryant College
Paul Munter, Co-editor
University of Miami
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Auditors are subject to a variety of pressures that can affect their judgments. This paper introduces the obedience pressure construct to the accounting literature by examining auditors' susceptibilities to superiors' inappropriate instructions. Milgram's (1974) obedience to authority theory is used as a basis to develop a normative influence perspective of obedience pressure. One hundred forty-six auditors from an international accounting firm were assigned randomly to one of three obedience pressure treatment groups representing either no pressure, pressure from a firm manager or pressure from a firm partner. Three vignettes were used to elicit likelihood judgments about actions when under the various pressure treatments. The auditors also completed the General Attitudes Toward Institutional Authority Scale (GAIAS) (Rigby 1982), a scale used to measure attitudes hypothesized to affect judgments.
The results indicate that auditors are susceptible to obedience pressure. Auditors who received inappropriate instructions from either a manager or partner were significantly more likely to violate professional norms or standards than auditors under no pressure. In addition, pressure from a partner had a significantly greater effect on judgments than pressure from a manager in two of the three vignettes. Individual attitudes toward authority, as measured by the GAIAS, did not have a significant effect on auditors' judgments. Overall, the results suggest that auditors may have a tendency to compromise their professionalism when faced with inappropriate instructions from superiors.
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Accounting is a communication process. Therefore, the measurement of meaning is of fundamental importance in accounting. Several recent studies have measured meaning in accounting and have examined the cognitive structure of meaning from various perspectives. No published research to date, however, has measured connotative meaning across different cultures or national boundaries. The proliferation of multinational enterprises and economic globalization call for greater worldwide standards of accounting. However, mandated uniformity in accounting principles does not ensure consistent understanding and application of the rules. Cross-cultural differences may affect the meaning of, and hence the application of, accounting principles.
This research investigates shared meaning among North American and Australian
auditors for one important accounting concept, "extraordinary items.' Significant
differences in the cognitive structure within which meaning is held emerged
for the two sets of auditors. Results also showed subtle differences in
classification decisions made by the two subject groups. Thus, results
indicate that cross-cultural differences are likely to influence the meaning
of accounting concepts and that future research in this area is warranted.
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OVERVIEW
The purpose of this article is to assess any difference in cognitive and connotative meaning of extraordinary items between the U.S. and Australia. The importance of this is in the gaining of understanding of how information may be interpreted differently across nations for investment decision making. That is, the researchers wish to ascertain if accounting terms such as extraordinary items carry different meanings in two cultures and, accordingly, invite different interpretations of financial events.
The theoretical structure of this paper lies in cognitive theory where
any assessed differences would be attributed to culture, although the authors
admit that there are environmental constraints which affect the decision
process. The experimental approach rather than the survey approach was
used to lessen the impact of those other external variables. Providing
the Australian and U.S. definitions of extraordinary items and requiring
both groups to use them is another means of controlling national environmental
factors. Still, complete control or assessment of interaction effects was
not accomplished.
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Prior behavioral research has documented the widespread use of heuristics and biases, yet few studies have examined whether the use of such biases is dysfunctional in business decisions. This study examines the use of an heuristic suggested from archival studies in auditing: reliance on prior errors in evidential planning. This heuristic is akin to 'availability" in the psychological literature. The study also focuses on concurrent tasks and explores the role of domain-specific experience in the use of decision heuristics.
The particular heuristic studied here is suggested by archival studies of audit workpapers, which have not shown a clear pattern of responsiveness in audit planning to the level of and changes in client risk that auditing standards prescribe. However, positive associations between prior adjusting entries (AJEs) in an account and subsequent increases in testing have been found. These findings are of concern because they may indicate an audit planning heuristic that emphasizes use of past client problems as an easily available indicator of future problems, instead of full integration of current risk factors.
To investigate auditor evidential planning strategies in response to both current risk factors and prior audit adjustments, this study examines planning judgments and decisions of auditors at various levels of domain-specific experience. A case was developed, based on a situation from practice, in which an income-increasing error was seeded. The presence of a prior AJE correcting a different error (not increasing income) was manipulated. Also manipulated were two current risk factors (a management compensation plan with income targets and complexity of the cost accounting system) that affect client incentives and ability to bias the financial status of the business. Practicing auditors judged the likelihood of material error (LME) and planned an audit program.
The study's results showed that the relative importance of the prior NE heuristic and the current risk factors on assessments of LME was contingent on the level of domain-specific experience. Particularly, auditors with less experience were more likely to view the prior AJE as contributing to audit risk, while those with more experience were more likely to view the management compensation plan as contributory. Audit plan effectiveness in detecting the seeded error was strongly associated with domain-specific experience. LME judgments were also associated with effectiveness, but less strongly. Thus, archival results concerning auditor concentration on prior errors were corroborated. However, the effectiveness benchmark (assessing the ability ofthe program to address the seeded error) incorporated into the study's design enabled support for the conclusion that the level of domain-specific experience and the auditor's risk assessment may mitigate concerns about possible negative effects on audit quality from attention to prior errors. These findings underscore the insights gained by viewing the audit as a multiple stage process and through concurrent analysis of both risk assessment and evidential planning decisions.
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Psychology literature suggests that the way in which information is presented to individuals can affect their decision making process. This study uses two experiments to investigate the extent to which the form of written tax law (subjective or objective) and the organization of client facts (natural order or random) define the amount and type of information (cues) that professionals select, weigh, and use in decision making. The cues selected, weighted and combined in decision making were measured by having the professional free recall information, and provide a decision along with its justification.
The results indicate that the form of law and the organization of facts interactively influenced the number of cues selected for use in decision making. Form of law also affected which specific cues were selected and which ones were highly weighted in decision making along with influencing the tax decision made. Experience differences between professionals in the two experiments help explain the inconsistencies in results.
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This paper presents a framework and model for examining the most efficacious
means of maximizing the inherent potential in the relationship between
accounting information system users and developers. In this paper we review
and integrate the theories and findings from information systems, participation
and procedural justice literature to develop a framework for examining
various involvement strategies when designing, modifying, purchasing or
implementing an accounting information system. We present an integrative
model of the involvement process identifying critical independent, moderating,
intervening and outcome variables. Research questions are presented along
with an example of how one might empirically test the model.
Accounting information systems (AIS), as a research area, has an identity
problem. Several accounting researchers have surveyed literature and sought
to develop models or frameworks for studies in this field. All seem to
concur that behavioral research in AIS promises to be a rich area for study.
Amer et al. (1987), for example, categorized existing computer information
systems research in accounting and auditing in three groups: conceptual
considerations in accounting systems design, EDP auditing techniques, and
computerized decision support systems. They concluded that there is a lack
of behavioral research related to AIS, but that this represents great potential
for growth as an area of study. Reneau and Grabski (1987), developed a
prescriptive model for information systems research as a basis for identifying
the particular domain of AIS research. They note that whereas the majority
of behavioral decision research has looked at the use of AIS and decision
making, an area also of interest involves interactions with the development
process. To encourage AIS researchers to investigate behavioral issues,
Sutton and Arnold (1994), recently proposed a framework for behavioral
research in AIS. This framework calls for research in several areas, which
includes the systems development process.
Hunton and Price's paper is a good example of behavioral research in
AIS. Certainly, the systems development process has been a rich area of
study for information systems researchers; involvement and participation
in that process is a good area for study by behavioralists. Much of the
behavioral-related AIS research to date has focused on either auditing
or expert systems. It is hoped that the work of Hunton and Price will encourage
others to examine the unique role of accountants in systems development.
Feminist critiques of the practice of science question the assumptions
underlying theories and research practices used in disciplines. Feminist
economic theorists have criticized the practices of science in economics,
the foundations of neoclassical economic theory (on which financial economic
theory is based), and the assumptions underlying economic decision theory
models (Coughlin 1993). These critiques are potentially useful to those
areas of behavioral research in accounting which are based on economic
theory. Much of the behavioral work in judgment and decision making uses
models derived from economic decision models and behavioral research in
financial reporting relies on financial economic theory. Feminist critiques
are helpful in illustrating problems with the role of individual behavior
in economic theory and the bias and underspecification of economic models
as applied to accounting phenomena. Alternative theoretical and methodological
approaches that are more attuned to a balanced view of individual, firm,
and market behavior are proposed.
I agree with Sara that the introduction of feminist theories into accounting
research has the potential to further our understandings) of both accounting
practices and accounting research. The comments which I prepared for the
conference were intended to strengthen Sara's paper in the hopes that it
would reach a broader audience of readers (both women and men) and that
these readers would pause to consider the ways in which feminist theory
and in particular feminist standpoint theory may enrich and strengthen
their research and, perhaps, even alter their perspectives on what accounting
does as well as what accounting should do. The comments in this written
discussion are also intended to emphasize the importance of feminist perspectives.
Given this intention, I emphasize here the points in the paper which I
believe are important and argue with these points rather than against the
insights contained in Sara's paper.
For whatever reason, feminism is a frightening and/or off-putting word
for many. Feminism is a word (and practice) that causes at least some individuals
to throw up their hands and declare that politics (i.e., feminism) has
no role in scientific endeavors. In an effort to counter these criticisms,
I believe the paper has now been strengthened by an explicit discussion
in the introduction of what the paper is not and I wish to re-emphasize
and perhaps elaborate on these points.
The purpose of this paper is to discuss the potential contribution of
ex ante research to the accounting standard-setting process. The paper
describes the use of academic research in the standard-setting process,
with an emphasis on the relevance of ex ante research. It highlights extant
ways for researchers to identify topics of interest to standard setters
and includes suggestions for additional means of identification. The paper
also discusses current topics of interest to the FASB and ends with a specific
request for research papers related to those topics.
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A Framework for Investigating Involvement Strategies
in Accounting Information Systems Development
James E. Hunton and Kenneth H. Price
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A Framework for Investigating Involvement Strategies in Accounting Information
Systems Development
Nancy A. Bagranoff
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Beyond Economic Man: Lessons for Behavioral Research
in Accounting
Sara Ann Reiter
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Beyond Economic Man: Lessons for Behavioral Research In Accounting
Joni J.Young
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A Request for More Research to Support Financial Accounting Standard-Setting
AAA-Accounting, Behavior and Organizations Section
Dennis R. Beresford
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The Role of Behavioral Accounting Research in Financial
Accounting Standard Setting
Laureen A. Maines
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Factors Limiting the Role of Behavioral Research in
Standard Setting
A. Rashad Abdel-khalik
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