Shared interest and honesty in budget reporting

Church, Bryan K.; Hannan, R. Lynn; Kuang, Xi

doi:10.1016/j.aos.2012.01.002

Cited by 122 publications

(131 citation statements)

References 51 publications

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“…Research attempting to link budget participation to budget slack also provides inconsistent results (Fisher et al 2000;Hansen et al 2003;Church et al 2012). While these inconsistent findings do imply that budgetary participation independently is not a sufficient condition to impact budgetary outcomes , previous attempts to examine the impact of different contingency variables (e.g., Shields and Young 1993, Gul et al 1995, Chong and Bateman 2000, Hartmann 2000, Lau and Lim 2002, Winata and Mia 2005, Agbejule and Saarikoski 2006Venkatesh and Blaskovich 2012) do not provide a satisfactory understanding of the mechanisms involved.…”

Section: Introductionmentioning

confidence: 78%

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

2014

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This paper addresses the long-standing question of how budgetary participation (BP) affects budgetary outcomes. Information technology for enhanced communication (ITEC) and activity-based costing (ABC) are taken into consideration as moderators that might affect the relationship between BP and budgetary outcomes in manufacturing firms. Based on moderated and polynomial regression analyses, the study's findings indicate that the main effects of BP, ITEC and ABC on budgetary outcomes are not significant, and that while ABC significantly moderates the relationship between budgetary participation and budgetary slack, ITEC does not moderate this relationship. Results also indicate that both ITEC and ABC significantly moderate the relationship between budgetary participation and managerial performance. These findings suggest that the effect of budgetary participation on budgetary outcomes can be contingent on ITEC and ABC although their impact varies with the nature of budgetary outcomes.

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Section: Introductionmentioning

confidence: 78%

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

2014

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“…For example, bonuses contingent upon division performance have relatively high interdependence, while individual bonuses have relatively low interdependence (Lazear and Shaw 2007). Recent studies examine the direct effect that compensation interdependence can have on misreporting and generally find greater compensation interdependence leads to greater misreporting (Church et al 2012;Maas and Van Rinsum 2013). However, these studies do not document how compensation interdependence influences the effectiveness of other controls designed to detect misreporting.…”

mentioning

confidence: 85%

“…While prior literature identifies the direct effect that compensation interdependence has on misreporting (Church et al 2012;Maas and Van Rinsum 2013), my study contributes by highlighting a moderating effect. This moderating effect is important because it suggests that compensation interdependence can reduce the effectiveness of controls designed in part to reduce misreporting.…”

mentioning

confidence: 94%

“…Church et al (2012) show that managers create more budgetary slack when they share the benefits of slack with a subordinate than when they alone receive the benefits. Maas and Van Rinsum (2013) show that more dishonest reporting occurs when misreported performance positively influences peers' compensation than when it negatively influences peers' compensation.…”

Section: Compensation Interdependence and Misreportingmentioning

confidence: 99%

“…H2 predicts the difference in the extent of performance misreporting between a centralized and decentralized control is greater when compensation interdependence is low than when compensation interdependence is high. Prior studies (Church et al 2012;Maas & Van Rinsum 2013) …”

Section: Figure 2 Theoretic Framework and Hypothesesmentioning

confidence: 99%

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When the Cat's (Far) Away: The Effect of Control Centralization and Compensation Interdependence on Performance Misreporting

Lill

2015

SSRN Journal

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This study investigates how control features influence employees' perceptions of controls and, subsequently, their reporting behaviors. I examine whether implementing a more centralized versus decentralized monitoring control influences employees' perceptions of whether the control will detect misreporting. In an experiment that holds the true detection rate constant, Ifind that participants perceive a relatively decentralized control as more likely to detect misreporting than a centralized control. Because decisions about monitoring controls and compensation systems are interrelated (O'Donnell 2000) and made contemporaneously (Brenner and Ambos 2013), I also examine whether compensation interdependence influences the effect that control centralization has on misreporting. Prior research shows that compensation interdependence leads to more aggressive reporting behavior (Sutter 2009). This aggressive reporting behavior is likely to reduce sensitivity to differences in subjective assessment of a control's detection likelihood resulting from control centralization. Consistent with this reasoning, I find that the difference in the extent of performance misreporting between a centralized and decentralized control is greater when compensation interdependence is low than when compensation interdependence is high. This study contributes to the accounting literature by defining control centralization and providing the first academic research on a consequence of control centralization. Moreover, this study provides theory and evidence of the joint influence of control centralization and compensation interdependence on misreporting, and it provides evidence that control design choices can influence employees' perceptions of control effectiveness.ii ACKNOWLEDGEMENTS

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Group moral discount: Diffusing blame when judging group members

Vainapel

Weisel

Zultan

et al. 2018

Behavioral Decision Making

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People lie more when they work as a group rather than alone. However, do people suspect and morally evaluate groups and individuals differently when they are suspiciously successful? In four experiments, we examine whether (a) suspiciously successful individuals and groups are judged and punished differently and (b) individual group members are judged differently from the group as one unit. Results suggest that people suspect successful groups and individuals to the same extent. However, group members are less likely to be suspected, judged negatively, punished, and reported on, when they are judged as separate individuals compared with as a group. The findings demonstrate a bias in judgment of group members, stemming from the method of evaluation—holistic or separate. We suggest that in order to minimize bias when judging misconduct by a group, the moral evaluation and punishment of all group members should be considered simultaneously.

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Shared interest and honesty in budget reporting

Cited by 122 publications

References 51 publications

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

When the Cat's (Far) Away: The Effect of Control Centralization and Compensation Interdependence on Performance Misreporting

Group moral discount: Diffusing blame when judging group members

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