Organizations often rely on management control systems to stimulate individual creativity and organizational innovation. However, organizations face a serious problem using formal controls to stimulate creativity because extrinsic motivation (motivation induced by external rewards, such as...

Prior literature suggests that organizations desire more accurate cost systems in response to greater competition. Complex cost systems have the potential to be more accurate than simpler systems, but are still susceptible to material errors. Overreliance on cost information provided by a...

In a setting in which corporate headquarters dictates total sales targets, we study how supervisors allocate sales targets to individual stores. Specifically, we analyze whether supervisors strategically use discretion in the target-setting process to address compensation contracting issues. We...

Statement on Auditing Standards No. 59 requires auditors to assess whether substantial doubt exists about a client's ability to remain a going concern. This study reports an experimental economic test of a game-theoretic model of that judgment. Competing behavioral predictions are based on loss...