In most organizations, budgets are important mechanisms for planning and control and for motivating subordinate performance. Accordingly, budgeting is one of the most extensively studied topics in managerial accounting. We analyze previous research by first classifying studies according to their...

This study examines the effects of risk preference and loss aversion on individual responses to differently framed, yet economically equivalent, incentive contracts. We extend prior research by examining contracts with combinations of bonus, penalty, and clawback incentives. Contracts framed as...

Despite the benefits of delegating decision rights, it is claimed that firms under delegate decision-making authority. However, to date, this claim is untested. This paper explores the choice between information elicitation and delegation. We also examine the effect of this choice on the...

Participative budgeting can benefita firm by incorporating subordinates’ private information into financing and operating decisions. In the managerial accounting literature, studies of participative budgeting posit superiors that range from passively committed to highly active participants,...

Section 406 of the Sarbanes Oxley Act (SOX) requires that U.S. public firms disclose their adoption of a code of ethics that includes formal whistleblowing procedures. Public companies listed on NYSE or NASDAQ are also required to prepare this disclosure. Formal whistleblowing policies guide...

Accounting research on the effects of incentives on creativity finds that paying for quantity of output yields the same level of high-creativity output as paying for only creativity or for both creativity and quantity (Kachelmeier et al. 2008). This finding is surprising and counter to economic...

At a fundamental level, corporate governance mechanisms promote ethical business relationships and actions. Having the proper governance mechanisms in place is especially important to the less informed, nonprofessional class of investors who may not have the ability, power or influence to...