In 2002, the European Union (EU) Parliament passed a regulation that requires consolidated and simple accounts for all companies listed in the EU to use International Financial Reporting Standards (IFRS) for fiscal years starting after 1 January 2005. This change in accounting systems will have...

Purpose This paper aims to propose using human senses as a means of thinking about the contributions of this research. Design/methodology/approach Based upon the metaphor of human senses, the model describes different aspects of research, such as topic selection, theory and method, providing...

We examine whether individuals can defy their decision power if it is beneficial for them to do so. In an experiment we let principals make a decision whether to make their own investment decision, or to let their agent make that decision. While the principal can work out that the agent benefits...

To ensure that audit committees provide sufficient oversight over the auditing process and quality of financial reporting, legislators have imposed stricter requirements on the independence of audit committee members. Although many audit committees appear to be “fully” independent, anecdotal...

In multi-level organizations, BU employees create budgetary slack from which the entire business unit may benefit but doing so causes agency costs for the organization. Relying on social identity theory, we predict and find, in data gathered by means of an experiment, that shortening the social...

Classical agency theory argues that economic incentives can have a strong impact on opportunistic reporting behavior. On the other hand, behavioral literature suggests that agents also adhere to descriptive norms established by peers. Most studies examine these effects in isolation, ignoring the...

Although creative ideas frequently meet with rejection in many organizations, the consequences of such rejection on future creative performance remain largely unexamined. Using an experiment, we examine whether the effect on future creative performance arising from the rejection of creative...

Recently, many organizations have installed calibration committees to review and adjust subjective performance evaluations of supervisors about their employees. This study uses an experimental setting to examine the impact of calibration committees on supervisor evaluation behavior. We predict...

Operating distortion causes inefficiencies in performance measurement systems and typically remains hidden in firms' operational layers, unless managers report its occurrence. One obstacle to managers reporting operating distortion is that they often benefit economically from remaining silent...