Mary E. Marshall, Jonathan M. Farrar, Dawn W. Massey, Linda Thorne, Anita Wu, Trang Bui
ABSTRACT We conduct a meta-analysis of the tax fairness–tax compliance literature from its inception in 1976 through 2021. We use an organizational justice perspective (Colquitt 2001) to differentiate between the dimensions of fairness that dominate tax fairness research. We find that the aggregate effect size of the fairness-compliance association is positive and of medium strength. We also find that distributive fairness has the strongest effect on taxpayers’ compliance and is largely driven by the subdimension of exchange equity. Other dimensions of fairness, namely, interactional (interpersonal and informational) and procedural, have smaller effect sizes. We also find a moderating effect of methodology. Our findings suggest both the importance of ensuring that tax dollars are used in ways that taxpayers value, while downplaying the effect of interactional aspects of tax administration, and the importance of carefully considering methodology when conducting tax fairness research.
{"title":"In All Fairness: A Meta-Analysis of the Tax Fairness–Tax Compliance Literature","authors":"Mary E. Marshall, Jonathan M. Farrar, Dawn W. Massey, Linda Thorne, Anita Wu, Trang Bui","doi":"10.2308/bria-2022-040","DOIUrl":"https://doi.org/10.2308/bria-2022-040","url":null,"abstract":"ABSTRACT We conduct a meta-analysis of the tax fairness–tax compliance literature from its inception in 1976 through 2021. We use an organizational justice perspective (Colquitt 2001) to differentiate between the dimensions of fairness that dominate tax fairness research. We find that the aggregate effect size of the fairness-compliance association is positive and of medium strength. We also find that distributive fairness has the strongest effect on taxpayers’ compliance and is largely driven by the subdimension of exchange equity. Other dimensions of fairness, namely, interactional (interpersonal and informational) and procedural, have smaller effect sizes. We also find a moderating effect of methodology. Our findings suggest both the importance of ensuring that tax dollars are used in ways that taxpayers value, while downplaying the effect of interactional aspects of tax administration, and the importance of carefully considering methodology when conducting tax fairness research.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135662928","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT Accounting conservatism has been described as deriving from preferences for reporting errors to be in the direction of understatement rather than overstatement. We pair reporters with users (who rely on reporters’ information) in a multiperiod experiment. We posit that, under misaligned incentives that motivate aggressive reporting, users view aggressive reports as reflecting exploitative intent and expect that a norm prohibiting aggressive reporting applies. We predict that users use noisy reporting errors to gauge reporters’ norm compliance. We find that, ceteris paribus, users prefer not to be paired with reporters producing overstatement errors likely to reflect aggressive reporting relative to reporters producing understatement errors likely to reflect conservative reporting; alternatively, we find no such asymmetric preferences when the agents’ motives are aligned. The asymmetric preferences cannot be explained by agency theory predictions of payoff maximization or loss aversion. These moral preferences provide an initial condition from which conservatism can endogenously emerge. Data Availability: Data are available from the authors upon request. JEL Classifications: B52; D81; D82; M41.
{"title":"The Conservatism Principle and Asymmetric Preferences over Reporting Errors","authors":"Jivas Chakravarthy, Timothy W. Shields","doi":"10.2308/bria-2023-003","DOIUrl":"https://doi.org/10.2308/bria-2023-003","url":null,"abstract":"ABSTRACT Accounting conservatism has been described as deriving from preferences for reporting errors to be in the direction of understatement rather than overstatement. We pair reporters with users (who rely on reporters’ information) in a multiperiod experiment. We posit that, under misaligned incentives that motivate aggressive reporting, users view aggressive reports as reflecting exploitative intent and expect that a norm prohibiting aggressive reporting applies. We predict that users use noisy reporting errors to gauge reporters’ norm compliance. We find that, ceteris paribus, users prefer not to be paired with reporters producing overstatement errors likely to reflect aggressive reporting relative to reporters producing understatement errors likely to reflect conservative reporting; alternatively, we find no such asymmetric preferences when the agents’ motives are aligned. The asymmetric preferences cannot be explained by agency theory predictions of payoff maximization or loss aversion. These moral preferences provide an initial condition from which conservatism can endogenously emerge. Data Availability: Data are available from the authors upon request. JEL Classifications: B52; D81; D82; M41.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135938442","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-01DOI: 10.2308/1050-4753-35.2.e
{"title":"Editorial Policy","authors":"","doi":"10.2308/1050-4753-35.2.e","DOIUrl":"https://doi.org/10.2308/1050-4753-35.2.e","url":null,"abstract":"","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135588379","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-01DOI: 10.2308/1050-4753-35.2.i
{"title":"Covers and Front Matter","authors":"","doi":"10.2308/1050-4753-35.2.i","DOIUrl":"https://doi.org/10.2308/1050-4753-35.2.i","url":null,"abstract":"","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135588378","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Eric N. Johnson, Philip M. J. Reckers, Mackenzie M. Festa
ABSTRACT This study demonstrates that perceived accounting information reliability is biased by the information user’s assessments of the information provider’s narcissism as well as the user’s own narcissism levels. We examine the specific subtypes of user narcissism driving these biases. Ninety-nine business professionals acting as information users read a simulated interview with an information provider (a corporate accountant) focused on a possible revenue misstatement and then assessed the perceived reliability of the information. We also examined the influence of perceived provider communion on reliability assessments. Consistent with narcissistic tolerance, information reliability assessments were higher when both the user and provider were higher in agentic narcissism. Consistent with narcissistic hypocrisy, assessments were lower when both the perceiver and provider were higher in antagonistic narcissism. Also, perceived provider communion was positively associated with reliability assessments. We discuss the theoretical and practical significance of these findings for future management accounting research and practice. Data Availability: Data are available from the first author. JEL Classifications: M41.
{"title":"Narcissism, Communion, and Perceptions of Accounting Information Source Reliability","authors":"Eric N. Johnson, Philip M. J. Reckers, Mackenzie M. Festa","doi":"10.2308/bria-2022-047","DOIUrl":"https://doi.org/10.2308/bria-2022-047","url":null,"abstract":"ABSTRACT This study demonstrates that perceived accounting information reliability is biased by the information user’s assessments of the information provider’s narcissism as well as the user’s own narcissism levels. We examine the specific subtypes of user narcissism driving these biases. Ninety-nine business professionals acting as information users read a simulated interview with an information provider (a corporate accountant) focused on a possible revenue misstatement and then assessed the perceived reliability of the information. We also examined the influence of perceived provider communion on reliability assessments. Consistent with narcissistic tolerance, information reliability assessments were higher when both the user and provider were higher in agentic narcissism. Consistent with narcissistic hypocrisy, assessments were lower when both the perceiver and provider were higher in antagonistic narcissism. Also, perceived provider communion was positively associated with reliability assessments. We discuss the theoretical and practical significance of these findings for future management accounting research and practice. Data Availability: Data are available from the first author. JEL Classifications: M41.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134915126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT Accountability research in auditing has spanned several decades, highlighting its importance in better understanding auditors’ judgments and decision-making processes. This study provides a systematic review of experimental audit research on accountability. We identify how previous research findings relate to theory, offer design considerations for future research, and provide future research opportunities. Relevant research was identified utilizing two databases. After removing duplicate records and applying exclusion criteria, a final population of 47 manuscripts is included in this review. We find that prior research results largely align with Tetlock’s social contingency model of accountability. This research stream is ripe with opportunities to enhance our understanding of accountability in auditing. Avenues for future research include investigating auditors’ responses to multiple accountability pressures, developing a measure of accountability, better understanding accountability in a post-COVID work environment, and considering ways to improve audit quality by shifting from a punitive to a more rewards-based system. Data Availability: The data that support the findings of this study are available from the database sources cited in the text.
{"title":"A Systematic Review of Experimental Research on Accountability in Auditing","authors":"Amy M. Donnelly, David P. Donnelly","doi":"10.2308/bria-2021-050","DOIUrl":"https://doi.org/10.2308/bria-2021-050","url":null,"abstract":"ABSTRACT Accountability research in auditing has spanned several decades, highlighting its importance in better understanding auditors’ judgments and decision-making processes. This study provides a systematic review of experimental audit research on accountability. We identify how previous research findings relate to theory, offer design considerations for future research, and provide future research opportunities. Relevant research was identified utilizing two databases. After removing duplicate records and applying exclusion criteria, a final population of 47 manuscripts is included in this review. We find that prior research results largely align with Tetlock’s social contingency model of accountability. This research stream is ripe with opportunities to enhance our understanding of accountability in auditing. Avenues for future research include investigating auditors’ responses to multiple accountability pressures, developing a measure of accountability, better understanding accountability in a post-COVID work environment, and considering ways to improve audit quality by shifting from a punitive to a more rewards-based system. Data Availability: The data that support the findings of this study are available from the database sources cited in the text.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135830116","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. Schwebke, William D. Brink, V. Hansen, Charles F. Kelliher
We examine the effect of social influence on individuals’ likelihood of using an IRS pre-populated tax return system and the effects of social influence and filing method on individual taxpayer compliance. Our experiment manipulates social influence about the IRS pre-populated return system and the IRS itself (unfavorable or favorable) as well as filing method (IRS pre-populated return or IRS blank tax software) for a simulated tax return. Consistent with social influence theory, results indicate public opinion influences individuals’ likelihood of using an IRS pre-populated tax return system. Additionally, consistent with omission bias theory and prior research, individuals who use the IRS pre-populated return system are less compliant. Finally, favorable social influence mitigates the noncompliant behavior exhibited during the use of pre-populated returns when public opinion about both the pre-populated system and the IRS is favorable.
{"title":"Pre-Populated Tax Returns: Individual Taxpayer Adoption and the Effect on Compliance","authors":"J. Schwebke, William D. Brink, V. Hansen, Charles F. Kelliher","doi":"10.2308/bria-2022-018","DOIUrl":"https://doi.org/10.2308/bria-2022-018","url":null,"abstract":"\u0000 We examine the effect of social influence on individuals’ likelihood of using an IRS pre-populated tax return system and the effects of social influence and filing method on individual taxpayer compliance. Our experiment manipulates social influence about the IRS pre-populated return system and the IRS itself (unfavorable or favorable) as well as filing method (IRS pre-populated return or IRS blank tax software) for a simulated tax return. Consistent with social influence theory, results indicate public opinion influences individuals’ likelihood of using an IRS pre-populated tax return system. Additionally, consistent with omission bias theory and prior research, individuals who use the IRS pre-populated return system are less compliant. Finally, favorable social influence mitigates the noncompliant behavior exhibited during the use of pre-populated returns when public opinion about both the pre-populated system and the IRS is favorable.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2023-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49049230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine how client importance affects judgment conservatism depending on auditors’ career concerns. We argue that auditors will interpret being assigned to a client of major importance as a more powerful signal of their promotion chances under strong competition than under weak competition for advancement and, hence, that they will consider their promotion opportunities to a greater extent in their judgments. We therefore predict that auditors exhibit more conservatism in their judgments regarding more important clients when competition for advancement is strong but not when it is weak. Using an experiment, we generally find results in line with this prediction. Unexpectedly, yet interestingly, we also find that less important clients are judged less conservatively under strong competition than under weak competition for advancement. Data Availability: Contact the authors. JEL Classifications: M42; M52.
{"title":"The Effects of Client Importance and Career Concerns on Auditors’ Judgment Conservatism","authors":"J. Pruijssers, Marcel van Rinsum","doi":"10.2308/bria-2022-031","DOIUrl":"https://doi.org/10.2308/bria-2022-031","url":null,"abstract":"\u0000 We examine how client importance affects judgment conservatism depending on auditors’ career concerns. We argue that auditors will interpret being assigned to a client of major importance as a more powerful signal of their promotion chances under strong competition than under weak competition for advancement and, hence, that they will consider their promotion opportunities to a greater extent in their judgments. We therefore predict that auditors exhibit more conservatism in their judgments regarding more important clients when competition for advancement is strong but not when it is weak. Using an experiment, we generally find results in line with this prediction. Unexpectedly, yet interestingly, we also find that less important clients are judged less conservatively under strong competition than under weak competition for advancement.\u0000 Data Availability: Contact the authors.\u0000 JEL Classifications: M42; M52.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2023-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47427695","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporate fraud imposes significant costs on stakeholders. Accordingly, firms strive to deter fraud ex ante and detect fraud ex post. Using a sample of experienced business managers, we experimentally examine the degree to which selected whistleblowing incentives provisions and a strong corporate governance culture serve ex ante to deter complicity in fraudulent financial reporting by increasing the perceived likelihood that observed violations will be reported. We find that reward provisions marginally increase perceived risks compared to a control condition, whereas penalty provisions significantly increase perceived risks. We also find that the existence of a stronger (compared to a weaker) corporate governance culture increases perceptions that observed violations will be reported; but greater Machiavellianism leads to diminished perceptions of risk. Additionally, we find that the influence of whistleblowing incentives provisions only manifest among participants low in Machiavellianism. We conclude by discussing the contributions of our research and by suggesting future research. Data Availability: The data are available from the authors upon request.
{"title":"The Deterrence Effects of Whistleblowing Provisions, Corporate Governance Culture, and Machiavellianism","authors":"D. Lowe, Philip M. J. Reckers","doi":"10.2308/bria-2022-041","DOIUrl":"https://doi.org/10.2308/bria-2022-041","url":null,"abstract":"\u0000 Corporate fraud imposes significant costs on stakeholders. Accordingly, firms strive to deter fraud ex ante and detect fraud ex post. Using a sample of experienced business managers, we experimentally examine the degree to which selected whistleblowing incentives provisions and a strong corporate governance culture serve ex ante to deter complicity in fraudulent financial reporting by increasing the perceived likelihood that observed violations will be reported. We find that reward provisions marginally increase perceived risks compared to a control condition, whereas penalty provisions significantly increase perceived risks. We also find that the existence of a stronger (compared to a weaker) corporate governance culture increases perceptions that observed violations will be reported; but greater Machiavellianism leads to diminished perceptions of risk. Additionally, we find that the influence of whistleblowing incentives provisions only manifest among participants low in Machiavellianism. We conclude by discussing the contributions of our research and by suggesting future research.\u0000 Data Availability: The data are available from the authors upon request.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2023-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48678733","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rachel Daniel, A. Douglass, Abagail Kluetz, Julie S. Persellin
Given that many significant decisions in accounting are made by groups of professionals, it is important to understand the impact of group interactions on ethical decision making. We examine how group dynamics can influence an individual’s ethical evaluations and intentions and whether the effect of these group interactions persists in the future. We also explore the ethical orientations used by participants to inform their ethical judgments. Our results indicate that individual initial assessments of ethical scenarios are consistently more ethical than group assessments of the same ethical scenarios. Groups consistently viewed questionable actions as more acceptable than individuals and were more likely to say that they or their peers would perform the action. This less ethical perspective persists in future individual ethical assessments, demonstrating a contagion effect on ethical judgments. Furthermore, our results show that justice and relativism are the moral constructs utilized by most participants to form ethical evaluations. Data Availability: Data are available from the authors.
{"title":"The Effect of Group Dynamics on Individual Ethical Decision Making","authors":"Rachel Daniel, A. Douglass, Abagail Kluetz, Julie S. Persellin","doi":"10.2308/bria-2022-008","DOIUrl":"https://doi.org/10.2308/bria-2022-008","url":null,"abstract":"\u0000 Given that many significant decisions in accounting are made by groups of professionals, it is important to understand the impact of group interactions on ethical decision making. We examine how group dynamics can influence an individual’s ethical evaluations and intentions and whether the effect of these group interactions persists in the future. We also explore the ethical orientations used by participants to inform their ethical judgments. Our results indicate that individual initial assessments of ethical scenarios are consistently more ethical than group assessments of the same ethical scenarios. Groups consistently viewed questionable actions as more acceptable than individuals and were more likely to say that they or their peers would perform the action. This less ethical perspective persists in future individual ethical assessments, demonstrating a contagion effect on ethical judgments. Furthermore, our results show that justice and relativism are the moral constructs utilized by most participants to form ethical evaluations.\u0000 Data Availability: Data are available from the authors.","PeriodicalId":46356,"journal":{"name":"Behavioral Research in Accounting","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2023-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47172439","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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