As part of the celebration of the fiftieth anniversary of AFAANZ, we consider the breadth of judgment and decision-making (JDM) experimental research in accounting over that 50-year period. Our review is divided by decade and between auditing, financial accounting and management accounting. In four major journals, we found 5745 papers between 1970 and 2009, which we consider impressive and strong support for the opportunity to publish in this field. Our aim is to encourage more JDM research from Australians and New Zealanders, and to allow researchers in particular specialisations to get a better understanding of the JDM research in other specialisations.
The release of AASB 1028, Accounting for Employee Entitlements, followed a period of intense lobbying and debate, resulting in a standard that contained significantly less stringent requirements than those proposed in the preceding exposure draft. This article examines the incentives for public companies to lobby on the proposals in ED 53, Accounting for Employee Entitlements, for the recognition of superannuation commitments of Australian companies. First, it analyses written submissions of public companies to identify the relative importance of superannuation as opposed to other types of employee benefits, and to identify the issues within superannuation that were of particular concern. Second, characteristics of lobbying companies are compared with non-lobbying companies to identify whether the types of arguments put by lobbyists are indicative of systematic differences between lobbying and non-lobbying companies. The study finds that companies responding to ED 53 were predominantly concerned with issues relating to defined benefit superannuation plans and the adverse effects of the proposals on income volatility. Consistent with this, companies sponsoring defined benefit plans were more likely to lobby against the proposals. Companies that chose to lobby were also larger in size and had higher income volatility than non-lobbying companies. The article provides a mapping between the arguments used by lobbying companies and their economic characteristics and evidence that, at least in the case of superannuation issues, lobbying behaviour truthfully revealed the preferences of lobbyists. The findings differ from those of comparable U.S. studies, the most obvious reason for this being institutional differences. This underscores the need to control for institutional differences and to exercise caution in generalizing results across countries.
This paper investigates the value relevance of (employer sponsored defined benefit plan) superannuation disclosures required by AASB 1028. It addresses the competing claims by standard setters and lobbyists that such disclosures would (not) enhance the relevance and reliability of financial statements. It presents three principal findings. First, disclosed superannuation information is value relevant in the industrial sector, where these items tend to be material. Second, the market weights on the required disclosures are typically higher than those on recognised assets and liabilities. Third, and in contrast to the findings in similar US studies, accrued benefits do not have higher explanatory power relative to vested benefits.
Organizations frequently use interactive groups to make strategic decisions, aiming to capitalize on individual members' unique knowledge. However, research shows that groups focus on information that members have in common, not unique information, resulting in suboptimal outcomes. Given that accounting systems can present information in various forms, we experimentally examine whether quantitative information results in greater information sharing and use than qualitative information. We take advantage of a rich dataset created by videoing groups making a capital investment decision. Consistent with prior research, we find that groups prefer common to unique information, regardless of whether it is quantitative or qualitative. However, individuals use quantitative information more than qualitative information before group interaction, and make more references to it during discussion. Added insights from the videos include identifying what determines greater use of quantitative cues, the importance of the numbers attached to cues, and how successful groups use quantitative cues. Data Availability: Please contact the authors.
We experimentally investigate the effectiveness of a self-certification requirement as an informal control to reduce opportunistic behavior. We predict and find that a requirement that managers sign to take sole responsibility for their decisions—even though the decision is kept private—acts as a “double-edged sword.” Using a capital investment setting involving two decision stages, we find that self-certifying managers are less likely to behave opportunistically at the first stage. However, at the second stage, managers are more likely to behave opportunistically if they previously self-certified an opportunistic decision. Additional analysis indicates that a monitoring-based control removes the effectiveness of self-certification altogether. Overall, we find that the effectiveness of a self-certification requirement in reducing opportunistic behavior is bounded by its timing and the presence of other controls; it is potentially useful when managers are making a first decision, and only in the absence of a formal monitoring system. Data Availability: Data available upon request. Please contact the authors.
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