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The papers in the Supplement are grouped into seven subject areas: evolution of behavioral approaches in accounting research, management control, experimental economics, auditing, and international accounting among others. These papers utilize various research methodologies: experiments, surveys, in-depth interviews, protocol analysis, field studies and archival research. They represent the various research methods currently used by behavioral accounting researchers. As such, these papers provide a forum for discussion and future research in their respective subject areas.
A number of individuals have contributed to the success of the conference. Publication of this Supplement would not have been possible without the support of W. Steve Albrecht, President of AAA (1997/98) and the AAA Executive Committee. I am particularly indebted to Steve, the AAA Executive Committee members, and the ABO Board of Trustees (Andrew D. Bailey, Mary S. Stone and Jan R. Williams) for making the necessary financial arrangement with the ABO Section to publish the Supplement. Mr. Craig Polhemus, AAA Executive Director, provided generous assistance for the 1997 ABO Research Conference and the publication of this Supplement. His administrative staff, Debbie Gardner, Jim De La, Beverly Harrelson, Roland LaTulip and Mary Cole; and the AAA Meeting Coordinators, Dee Strathan and Debbie Gouwens, have provided technical and logistic support both for the conference and the Supplement. Joe Schultz has been instrumental in facilitating the completion of the conference. The ABO Board of Officers has supported and authorized the conference and the Supplement.
I am particularly grateful to members of the ABO Section and other AAA sections for their support and involvement at the conference as paper presenters, discussants, moderators and reviewers. I would like to thank the manuscript referees for their assistance in reviewing the papers on a timely basis, and am including the names of all referees who reviewed papers both for the conference and the Supplement.
I have benefited from my close working relationship with Jacob G. Birnberg and his experience as Editor of BRIA during 1995/1997. I am indebted to his suggestions for matching reviewers with their subject areas and grouping papers by topical areas for both the conference and the Supplement. Eileen Stommes provided editorial assistance in the preparation of the Supplement.
Duquesne University has assisted my efforts in organizing the conference. I would especially like to thank Thomas J. Murrin, Dean of the Palumbo School of Business; and Kenneth L. Paige, Coordinator of Accounting Program for their support of the project. Linda Cuda and Chris Koenig have provided secretarial support. My graduate assistants, Dilum Wijekon and Janna Miller, have been respectively involved in both the conference and the Supplement. I am grateful to them and to my colleagues in the ABO Section for their support of my endeavors. Their unfailing support made the timely completion of this project possible. Seleshi Sisaye, Duquesne University Editor, BRIA Supplement-Volume 10, 1998
Seleshi Sisaye, Duquesne University
Editor, BRIA Supplement-Volume 10, 1998
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The purpose of this paper is to trace the growth of the behavioral paradigm
in accounting. By examining the change in several measurable variables,
I show that there has been a substantial increase in the impact of this
paradigm over the period studied. This growth is documented by increases
not only in the number of faculty selecting the behavioral designation
to identify their area of interest, but also by the percentage who self
identify. The increasing impact of the behavioral paradigm is also supported
by an increase in the number and proportion of the articles using this
approach that appear in the more prestigious accounting journals. I also
document a series of events that have occurred over a more extended period
of time that supported and contributed to the rise of behavioral science
in the activities of accounting scholars. Finally, I take a look to the
future.
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This section of the supplement contains four papers that discuss social
and behavioral sciences applications in accounting and control research.
The authors apply macro perspectives at the group and organizational levels.
This paper provides an overview of the differing approaches/perspectives
used by the authors and describes their implications for future research
on management control systems. The paper suggests that using multidisciplinary
approaches in social and behavioral sciences would enrich future research
on accounting and control systems in complex organizations.
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The focus of control systems has shifted from the problem of controlling
the individual/task to the problem of controlling the organization. This
change is due to the dynamic nature of the environment within which organizations
now exist. This paper discusses the impact of that change on the organization’s
control system. The primary impact has been on the role of feedback in
the system. Feedback no longer serves to facilitate the control system’s
convergence to equilibrium. In a dynamic setting, feedback is the vehicle
through which “adaptive controls” and “playfulness” facilitate change and
alter the nature of controls.
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This paper examines the link between contingency theory and management
control systems. Contingency theory states that the design and use of control
systems is dependent upon the context of the organizational setting. A
better match between the control system to the contingency variable is
hypothesized to result in increased organizational performance. This paper
identifies contingent control variables, defines the boundaries of control
systems, and categorizes prior work by the analysis complexity. Even though
this research stream has provided useful insights, many of the results
are tentative and less than definitive. This paper concludes by proposing
ways to strengthen contingency theory results.
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The purpose of this paper is to offer suggestions for future research
in accounting and control. It proceeds by first describing the three domains
that comprise research—the conceptual, research methods and substantive
domains—and suggests that our understanding of accounting and control may
perhaps be best extended by intensively focusing on the substantive domain,
or social/organizational setting of interest, and then drawing in relevant
theoretical frameworks and methods. The paper then discusses the multiple
roles of accounting and control systems as technical solutions to problems,
political exchanges and forms of social discourse, and the research methods
that may be used to study these roles.
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Healthcare organizations today face a myriad of challenges as they attempt
to adapt to demands for improved quality and reduced cost. Their responses
to these pressures provide accounting, behavior and organization (ABO)
researchers an excellent laboratory in which to examine changes that also
confront many other service organizations. Distinctive features that make
this laboratory an appealing one are the existence of systematic, large-scale
databases, the special role of teams and physicians and the current state
of cost accounting information. Current empirical research in this area
is described and categorized with an eye toward future research opportunities.
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The paper begins with a brief comparison of the research perspectives
of experimental economists vs. those of most behavioral accountants who
conduct experiments. This is followed by a detailed description of two
specific studies. The first study provides an example of the experimental
economics approach, while the second study provides an example of the integration
of this approach into a behavioral accounting study. These studies are
used to illustrate the standard techniques and procedures used in experimental
economics and compare them to those used in conventional behavioral accounting
experiments. The potential costs and benefits of integrating aspects of
the experimental economics approach into behavioral accounting experiments
are discussed. The paper concludes with a discussion of how such an integrative
approach could significantly increase the impact of behavioral accounting
experiments.
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Although accounting information is widely acknowledged to provide the
basis for many contractual agreements, the impact of accounting information
characteristics on bargaining behavior has received little research attention.
The results reported in this manuscript demonstrate that the amount of
uncertainty inherent in accounting information signals can impact bargaining
behavior. In particular, offers and counteroffers observed in a bilateral
bargaining setting, where accounting-based information about an opponent’s
payoffs was less certain, are consistent with bargainers acting and opponents
responding as if offers and counteroffers were strategic rather than informational.
In more certain settings, however, bargainers were more likely to use offers
and counteroffers to reveal reservation price information and opponents
were more likely to believe bargainers’ offers revealed relevant information
about bargainers’ preferences. We hypothesize that bargainers’ reflections
(as in a hall of mirrors) of each other’s cognitions are impacted by the
uncertainty of the signals generated by the accounting information system.
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This study investigates the effect of recommendations from an expert
system on the judgment behavior of system users in an auditing task. Specifically,
two experiments were conducted to determine whether the provision of such
recommendations is associated with anchoring effects among users. “Anchoring”
is a term used to describe a judgment bias that occurs when individuals
cannot ignore certain knowledge when processing information in decision
making. In each experiment, auditing students used an expert system that
assisted in the evaluation of whether there existed substantial doubt about
a company’s ability to continue as a going concern. We compared the assessments
of users provided recommendations from the system to those not provided
recommendations. The results provide evidence that anchoring effects can
occur with the provision of recommendations from the expert decision aid.
An important implication of these results is that anchoring on the advice
of an expert decision aid can result in improper attention given to audit
evidence that is inconsistent with the recommendation. Results from this
and similar studies that examine the implications of expert system use
on decision behavior can be useful in the development and implementation
of effective intelligent decision aids.
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Prior research suggests that accounting decision makers are often unwilling
to rely on decision aids, limiting their intended effectiveness. This study
examines involvement in the aid’s development as a mechanism for decreasing
decision-makers’ resistance to decision aids. We investigate whether the
act of choosing the information for the decision aid increases decision
aid reliance, and then examine the resulting impact of involvement on performance.
As expected, decision makers were more willing to rely on a decision aid
based on information they had selected than were decision makers without
this type of involvement. However, the information chosen resulted in decision
aids with lower predictive accuracy than the optimal decision aid. Although
there were no significant differences in absolute performance related to
information choice, there were significant performance improvements relative
to the quality of the decision aid. These results highlight the importance
of evaluating both decision aid reliance and predictive validity in determining
decision aid success.
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Many business tasks are performed by people interacting in groups. While
research on the effects of group interaction on task performance has been
called for, few such studies have been done. Most studies conducted in
audit settings stress that group interaction should result in performance
gain. However, psychology literature also indicates that group interaction
could result in reduced performance as a result of process loss. This paper
explores decision processes of interacting audit groups and individual
auditors when conducting analytical procedures. A model of group performance
adapted from Steiner (1972) (Steiner's model) helps frame group process
gain and loss issues. Decision process data are gathered from groups of
auditors using think-aloud verbal protocols. Group decision processes and
performance are compared to those of individual auditors from a prior study.
Results indicate that groups exhibited some process gain (e.g., from knowledge
pooling), which contributed to improved performance. However, process loss
caused several groups to fail to select a correct hypothesis that had been
considered, thereby preventing them from achieving their full potential.
Specific sources of process gain and loss contributing to differential
group performance are discussed, along with implications for audit practice
regarding maximizing process gain and reducing process loss.
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This study investigates the association between managerial disclosure beliefs and firms’ disclosure activities. It adopts a cognitive perspective that posits beliefs underlie the performance of behaviors (Fishbein and Ajzen 1975); hence, managerial disclosure beliefs will be related to a firm’s voluntary disclosure practices. Managerial disclosure beliefs were measured through a survey of 68 CEOs of Canadian public companies. Firm disclosures were measured by the volume of disclosures about corporate earnings performance and changes in future corporate strategy contained in the Canadian Business and Current Affairs database.
The results show that managerial disclosure beliefs predict more than
20 percent of the variance in the volume of both earnings disclosures and
strategy disclosures. Specifically, we found that firms with CEOs who believe
that disclosure has certain benefits (for example, reductions in the firm’s
cost of raising capital, or investors’ costs of gathering information)
disclose more than other firms. Further, the CEOs of high disclosure firms
believe that the market makes significant use of multiple sources of information,
such as analysts’ forecasts of future earnings and information about corporate
strategy, in valuing the firm. On the other hand, low disclosure firms
were found to have CEOs who believe that the market is fixated on earnings
per share data. These results indicate the importance of managerial disclosure
beliefs in explaining why firms disclose differently on a voluntary basis.
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This paper analyzes peer relationships in work settings by examining
16 peer relationships in a southwestern city shortly after the merger of
two international accounting firms. We conducted a field study to examine
why individuals form and keep peer relationships within the context of
organizational and task uncertainty created by a merger. We found the functions
performed by peer relationships were almost exclusively concentrated in
the psychosocial area during the merger. The utilization of peer relationships
was spread broadly across the firm, irrespective of education, experience
or organizational level. The formation and maintenance of peer relationships
appears to be an important reaction to the uncertainty and learning requirements
imposed by the merger process.
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