Abstracts
Day 1, Session 1
The importance of social mechanisms in the commission of or resistance to fraud: A field study
By: Pujawati (Estha) Gondowijoyo (The University of Melbourne) and Christie Hayne (University of Illinois)
We analyze 14 stories from individuals who committed group fraud and 19 from those who resisted pressure to commit group fraud. Using social norms theory and a dichotomy of social and administrative mechanisms, we sought to better understand the control mechanisms that helped push people toward or against fraud. Social mechanisms are based on the influence of others (e.g., culture, mentorship) while administrative mechanisms are based on rules and policies (e.g., reward systems). We find that social mechanisms typically create and communicate normative expectations while administrative mechanisms support their enforcement by formalizing expectations, changing the perceived cost-benefit of compliance, and facilitating adherence. Further, we find that social mechanisms are significantly more influential than administrative mechanisms in pushing individuals toward the commission of and resistance to group fraud. Our field study enriches fraud literature and identifies control mechanisms in which practitioners should invest.
Governance mechanisms and the severity of supplier fraud: An exploratory study of buyer complaints
By: Neale G O’Connor (Monash University Malaysia) and David M Reeb (National University of Singapore
We examine the effectiveness of various screening, auditing, and resolution governance mechanisms in limiting the severity of supplier fraud in inter-firm relationships (supplier fraud). Using a proprietary dataset with over 2,500 complaints about emerging-economy suppliers from 2014 to 2020, we find substantial heterogeneity in a buying firm's risk reduction strategies to limit supplier fraud. We first explore which screening and incentive (auditing and resolution) mechanisms are associated with curbing supplier fraud severity. Our analysis shows that several mechanisms (screening, audit, and resolution) are strongly associated with lower fraud severity. Importantly, we find that the effectiveness of such devices depends on whether firms use them alongside written contracts and for first-time orders. We also find that buying firms from developed (OECD - Organization for Economic Co-operation and Development) economies appear to use these devices more successfully than firms from non-OECD economies. Overall, our results highlight the relative effectiveness of different governance mechanisms used at the firm's boundary and how this effect varies based on contract and buyer (initial order relationship and home-country) characteristics.
Day 1, Session 2
Vibrant materialities and quasi-evidence in the discharge of accountability: A field-study of an international development NGO
By: Roel Boomsma (The University of Sydney Business School) and Wai Fong Chua (The University of Sydney Business School)
This paper seeks to analyse (a) how human actors together with vibrant things shape the production of evidence in the discharge of accountability; and (b) the tactics mobilised to justify and make sense of the use of quasi-evidence (evidence that breaches ‘the’ rules of evidence). The empirics are based on an international development NGO motivated to produce ‘rigorous’ evidence of impact. The case highlights how, inter alia, variable consultants, fluid survey instruments, language proliferation, and muddy roads result in the production of quasi-evidence. The use of quasi-evidence is justified through open acknowledgement of evidential absence, the influence of ‘uncontrollable’ factors, organisational immaturity, and a discourse of hopeful betterment. Such justification, however, is grounded in irony and contradiction. The greater demand for evidence resulted in the rejection of randomised control trials as infeasible science and is now associated with a looser, ‘more feasible’ definition of impact. But the continued reliance on ‘scientific’ methods for the assembling of evidence results in the persistent acceptance and use of quasi-evidence.
The worths of water: A multi-period analysis of accounts in a water-management arena
By: Michele Andreaus (University of Trento), Laura Maran (RMIT University) and Thomas Schneider (Ryerson University)
Hydropower has been foundational to countries’ development plans during the 19th and 20th century and to the industrialised modernity of 21st century. While water management is at the centre of Sustainable Development Goals (SDGs), it presents opportunities to challenge society’s taken-for-granted assumptions about worth of things. This study applies the sociology of worth (SoW), as detailed by Boltanski and Thévenot (2006), to conceptualise the ‘common good’ water since the advent of New Public Management (NPM) reforms. The analysis of the extensive data, from 1992 to nowadays, about the Italian case of Santa Giustina dam helps to re-construct a narrative of hydropower around a nuanced understanding of NPM ‘situations’. Previous accounting studies have demonstrated how accounts play a pivotal role in defining questions of justice and accountability. Most of them have focussed on the conflict arisen during those ‘situations’. This study conceives accounts as ‘reports’ of tests of worth and, especially, as coordination devices, which decode and find a feasible compromise among orders of worth. In doing so, we demonstrate how accounts contribute to the spread of the spirit of capitalism (Chiapello, 2017) at a system level, with policy implications and ongoing concerns for social and environmental justice.
Online big data, fleeting time and doubtful inscriptions: Decision making in Formula One racing
By: Lichen Yu (The University of Sydney Business School) and Jan Mouritsen (Copenhagen Business School)
This study revisits the relations between accounting, inscription work, and decision making in the context of big data. It aims to understand the shifting interactions between established – offline – decision models and real time – online – big data, and how they work in a fastresponse situation, Formula One (F1) racing. Mobilising Amoore’s (2019) thesis on the practice of doubting in algorithms, this study argues that the three constituents of big data, namely volume, velocity, and variety, enable accounting to structure temporality, characterised by moreness, quickness, and nextness. Moreness stimulates decision makers to discover new relations between objects, thereby creating an array of modelled futures that are indifferent to their actual occurrences; quickness forces prompt decisions, but variety of big data renders established decisions amenable to invalidation. This moves the focus to nextness so that decisions become reversible. In this temporal structure, decision makers rely on presences in accounting inscriptions to relate and re-relate objects and existing models. Doing so creates possible futures that temporarily differentiate actors from their rivals. We find that decision makers construct temporal materiality by generating varying relations to only a few artefacts in which new temporalities are created. Temporal materiality attends to the change of times in materiality. Hence, in big data, accounting not only constitutes territories but also temporalities.
Day 1, Session 3
Management accounting as game changer? On the bidirectional effects between management accounting system innovation and organizational success
By: Alisa Sophie Bach (WHU – Otto Beisheim School of Management), Utz Schäffer (WHU – Otto Beisheim School of Management) and Daniel Schaupp (WHU – Otto)
Research on management accounting system (MAS) innovation has largely ignored that the relationship between MAS innovation and organizational success could be bidirectional. Consequently, two important questions for organizations are whether they should invest in MAS innovations and how these investments will affect organizational success. In this paper, we investigate these bidirectional effects by using a cross-lagged effects model of MAS innovation profiles and organizational success. Using longitudinal data on 101 company-level observations, our results indicate that while organizational success has no effect on the MAS innovation profile of an organization, a more innovative MAS profile has a positive effect on organizational success. We further explore these results and show that organizations with a more innovative MAS profile seem to benefit from improved decision-facilitation and information quality, increased efficiency, and a more successful collaboration between the IT and the management accounting department.
Creative capacity, multidimensional incentives, and creative performance
By: Ajanee Ranasinghe (Tilburg University)
I examine whether an individual’s ability to produce creative outcomes (“creative capacity”) determines the effectiveness of an incentive system that values both the number of ideas and the creativity of those ideas (“creativity-weighted incentives”). Individual creative capacity is an important consideration for incentive design because firms typically employ individuals with high creative capacity for creative work roles. But this has received little attention in the prior literature on creativity-weighted incentives. Drawing on psychology and economics literatures, I predict and find experimental evidence that creativity-weighted incentives lead to a lasting improvement in creativity for individuals with high creative capacity. This result challenges previous research findings that creativity-weighted incentives have no lasting effect on creative performance. My study demonstrates that, for the types of individuals who are typically employed for creative work, creativity-weighted incentives can be effective.
Day 1, Session 4
Why accounting happens—a practice perspective on accounting as teleological event in the timespace of human activity
By: Thomas Ahrens (UAE University) and Zamzulaila Zakaria (International Islamic University Malaysia)
This paper outlines a Heideggerian account of human activity to explain causality in accounting practices. It is based on Schatzki’s interpretation of Heidegger. Schatzki conceptualised human activity as caused by practical intelligibility, or what makes sense to people to do. The effects of practical intelligibility play out in the experiential timespace of human activity. We argue that practical intelligibility offers ways of explicating the complex causality of accounting practices without jeopardising the hallmark of social and organisational studies of accounting, namely, sensitivity to context through grounded analytical categories. This approach to causality can help clarify the social and organisational functionings of accounting and create greater acceptance for this kind of research. We illustrate our argument with observations of accounting, management, and control practices from an ethnographic field study of a privatised pharmaceutical company.
From accounting standards to the meeting table: Tensions in risk management
By: Amalie Ringgaard (Aalborg University Business School), Per Nikolaj Bukh (Aalborg University Business School) and Niels Sandalgaard (Aalborg University Business)
Purpose This paper investigates how and why increasing regulatory requirements affect tensions in risk management and how risk experts try to solve these tensions by developing a performance management system that emphasises both sales-oriented and risk management objectives. Design/methodology/approach The paper is based on a case study approach with interviews and documents as the data sources. The case company is a systemically important financial institution located in Scandinavia. Findings We study how the regulation on risk management accelerates the tensions between backoffice risk management functions and local branch personnel with different professional logics. The study examines why the tensions occur and identifies how the decentralised organisational structure and the inadequate delineation of responsibilities challenge the implementation of formal risk management policies. Moreover, the study shows how the accounting department establishes new targets for risk to minimise the tensions. The risk-adjusted income measure effectively motivates the branch personnel’s hybridisation of loan-granting decisions when profit-seeking is balanced with credit risk considerations. However, the non-financial targets for new risk types, such as antimoney laundering efforts, merely encourage co-optation, since the branch personnel primarily complete these tasks to maintain their license to operate without deeming it strategically relevant. Originality The paper demonstrates how external demands for risk management impact formal policies and informal practices. Further, the paper delineates how risk is integrated into the performance management system.
The interplay of management control systems and social capital in a social enterprise
By: Rui Vieira (I.E. Business School), Brendan O’Dwyer (University of Amsterdam) and Tran Thi Lan Ha (University of Amsterdam)
This paper investigates the interplay between management control systems (MCS) and social capital in a social enterprise. It uncovers how the bonding and bridging dimensions of social capital operate to resolve tensions between the social and business goals of social enterprises and how this is influenced by a social enterprise’s MCS. The paper shows how an over-reliance on informal MCS and weak boundary systems contributed to financial mismanagement in the enterprise and threatened to erode social, cultural and economic capital. We argue that formal MCS, in particular strong boundary systems, need to be enrolled early in a social enterprise’s development to prevent the possible erosion of significant bonding social capital. Our analysis also shows how boundary systems can have symbiotic effects when used in parallel with beliefs systems. After the discovery of financial mismanagement in the studied enterprise, to manage the crisis and learn from it, internal controls and boundary systems were strengthened and combined with beliefs systems to enhance bonding social capital and preserve bridging social capital. Overall, social capital played a key role in crisis management and the four levers of control combined and interacted to build resilience. We show how beliefs systems strengthened bonding social capital without weakening bridging social capital. Thus, we illustrate how MCA and social capital are linked reciprocally over time. Therefore, the paper contributes to emerging areas of research in three respects – one motivated on research on the levers of control framework, the second focused on MCS and their relationship with social capital, and the other focused on the field of non-government and social enterprises.
Day 2, Session 5
Green knowledge assets and environmental management accounting: Creating value and managing competitive advantage
By: Kaveh Asiaei (Monash University), Zabihollah Rezaee (University of Memphis), Nick Bontis (McMaster University), Omid Barani (Young Researchers and Elite Club)
Environmental accounting has gained considerable attention from regulators, investors, and businesses in the past several decades. Senior management provides stewardship for all capital, including financial, social, human, reputational, and environmental. This study extends theory by proposing the natural resource orchestration approach to examine whether and how environmental management accounting (EMA) can translate green knowledge assets (GKA) into a competitive advantage (CA). We use the partial least squares structural equation modeling (PLS-SEM) technique to analyze data collected based on a survey of 106 chief financial officers (CFOs) of publicly-listed companies in Iran. The results show that two dimensions of GKA, namely green structural assets and green relational assets, are positively associated with EMA and CA. In contrast, another dimension (i.e., green human assets) can stimulate CA only in the presence of EMA as a mediating variable. Our results suggest that GKA contributes to the achievement of a competitive market return and desired environmental impacts. This study presents policy, practice, and research implications and contributes to the extant sustainability accounting literature by shedding light on the issue of whether and how organizations can synchronize, bundle, and structure (i.e., orchestrate) their various green knowledge resources with proper management accounting systems for the ultimate purpose of gaining the maximum benefits of those strategic green assets and adding to the bottom-line earnings.
Employee benefits and company performance: Evidence from a high-dimensional machine learning model
By: Mikko Ranta (University of Vaasa) and Mika Ylinen (University of Vaasa)
We analyze in detail how 26 different benefits and perks offered to employees affect the market and operational performance of companies. With the aid of an efficient machine learning -based predictive model and tools from explainable AI, we find significant differences in the relative importance and nature of association for different benefits. Furthermore, using a state-of-the-art machine learning approach, we are able to identify several causal links from the employee benefits to performance. Stock and equity options, reimbursed daycare and employee discounts are found to affect company performance positively, and are beneficial to offer equally to all employees. However, benefits like life insurance and paid time off are found to have a negative effect when offered widely, but a positive effect when offered in-equally to a small group of key employees. We argue that these differences are probably due to significant variations in the cost/benefit ratio of various employee benefits.
Day 2, Session 6
Show me my future! The effect of forecast performance source and accuracy on employees’ willingness to acquire distal skills
By: Fangbin Lin (UNSW Sydney), Mandy M. Cheng (UNSW Sydney) and Kerry A. Humphreys (UNSW Sydney)
This study examines the effect of providing individual forecast performance information (i.e., estimated future performance ratings) to employees on their willingness to acquire distal skills that are critical for future work roles. This new type of forward-looking information can be predicted by either human forecasters (e.g., supervisors and human resource advisors) or artificial intelligence (AI)-based systems. Despite their proven forecast accuracy benefits, prior research suggests that employees are sometimes resistant to using AI-based systems for performance evaluation purposes. We conduct an experiment to examine whether and how providing employees with forecasts of their individual performance improves their acquisition of distal skills, and to what extent this effect depends on two important features associated with the forecast performance – namely, forecast performance source (human versus AI system) and accuracy. We find that providing employees with forecast performance improves their willingness to acquire distal skills. Further, employees are more willing to acquire distal skills if the forecast performance source is a HR performance advisor compared to an AI-based performance evaluation system, but this difference is weaker when the forecast source has had a lower forecast accuracy in the past. Further analyses show that our findings can be explained by employees’ construal mindset when they are provided with their forecast performance. Our findings contribute to understanding the use of this new type of forward-looking information to encourage employees’ futureoriented skill-acquisition behaviors and suggests that organizations need to be aware of factors that may undermine the effectiveness of this practice.
When is multi-source or single-source performance feedback preferable? The combined effect of feedback source and feedback valence on subordinates’ fairness perceptions
By: Xiaoning (Cynthia) Wu (Monash Business School), Sukari Farrington (Monash Business School) and Ralph Kober (Monash Business School)
The use of multi-source performance evaluations, in which feedback is provided from various sources (e.g. peers, clients, subordinates) is becoming increasingly popular over traditional topdown, single-source performance evaluations. However, there remains an open empirical question regarding the conditions in which multi-source performance evaluation are preferable to single-source performance evaluations. One important determinant of performance evaluation effectiveness is subordinates’ perceptions of performance evaluation fairness. We employ a 2 x 2 between-subjects experiment in which we manipulated feedback source (multi/single) and feedback valence (positive/negative), in which participants played the role of a senior accountant and received a hypothetical performance evaluation for an audit engagement. Results indicate that with respect to distributive fairness, feedback source and feedback valence interact, however in the opposite direction of our predictions. Subordinates perceive multi-source feedback as fairer than single-source feedback when feedback is negative. Conversely, subordinates perceive multi-source feedback as less fair than single-source feedback when feedback is positive. This study contributes to the burgeoning literature on multi-source performance feedback and provides practical insights to business practitioners by revealing the conditions under which it may be preferable to include or exclude feedback from other sources (e.g. peers, clients, subordinates) in performance evaluations.
Task re-allocation: Matching individual knowledge and skills with tasks within job positions
By: Jasmijn Bol (Tulane University), Zhichao (Alex) Wang (The Australian National University) and Chen Wang (The Australian National University
Task allocation is a core element in organization architecture. Prior literature on task allocation focuses on the allocation of tasks to different specific job positions, tasks may also be re-allocated within the same job positions. In this study, we examine the effects of task re-allocation on employee performance. Based on archival data obtained and survey data collected from a research setting that has recently adopted a task re-allocation problem, we find that re-allocating tasks within a group of employees who have the same job position enhances employee performance. We also find that including self-selection in task re-allocation enhances the positive effect of the task re-allocation on employee performance. Our study shows the benefit of increasing the level of task customization for individuals within the same job position. We also contribute to job (re)design literature by showing that re-allocating tasks among employees to better match their abilities and preference can be a good complement to job (re-)design, increasing the satisfaction and productivity of employees. Finally, we speak to the literature on employee self-selection and highlight the benefits of self-selection even when the information asymmetry is relatively small. Our study also has practical implications.
Day 2, Session 7
The impact of compensation and anonymity on peer feedback distortions
By: Thorsten Knauer (Ruhr-University Bochum), Svenja Marsula (Ruhr-University Bochum) and Sandra Winkelmann (Ruhr-University Bochum)
Firms are increasingly implementing peer feedback systems in different settings. Compensation systems to which the feedback is linked or feedback source anonymity vary by company. In this multi-period experimental study, we investigate how two crucial peer feedback design elements (1) compensation (fixed pay vs. tournament) and (2) feedback source anonymity (no vs. yes) affect peer feedback distortions. In the case of a tournament, we predict and find that feedback is more negative compared to fixed pay. Concerning our second factor source anonymity, we predict and find, that anonymity leads to more negative feedback compared to non-anonymity. We reason that individuals barely suffer from psychological costs and feel less responsible for their feedback when remaining anonymous. Further, we predict and find that anonymity affects peer feedback differently in the case of a tournament compared to fixed pay. Specifically, the negative effect of anonymity on peer feedback is stronger under tournament compensation compared to fixed pay. Our results inform managers about the importance of feedback distortions when considering the implementation of peer feedback systems.
Do birds of a feather flock together? The joint effects of manager and subordinate narcissism on performance evaluation
By: Miriam K. Maske (Bundeswehr University Munich) and Matthias Sohn (European University Viadrina Frankfurt (Oder)
Giving superiors discretion in the evaluation of subordinate performance is common in practice. This study investigates the interactive effect of superior and subordinate narcissism on subjective performance evaluation. Based on the homophily effect (i.e., the tendency of like to associate with like), we hypothesize that narcissistic superiors show greater tolerance towards narcissistic subordinates than non-narcissistic superiors. We conduct an online experiment with experienced managers and find that both superiors high and low in narcissism evaluate a narcissistic subordinate less favorably than non-narcissistic subordinates. Our results show that this effect is mediated by the superiors’ weaker feelings of closeness to narcissistic subordinates. In line with our hypotheses, this mediation is moderated by superior narcissism. Superiors high in narcissism show greater feelings of closeness to narcissistic subordinates and, hence, evaluate narcissistic subordinates more favorably than non-narcissistic superiors. Our results provide novel insight into the pivotal role of individual traits in subjective performance evaluation.
Day 2, Session 8
Demand-driven feedback: Effects on evaluations of performance and potential
By: Jan Hendrik Lampe (WHU – Otto Beisheim School of Management)
In demand-driven feedback systems, employees receive performance feedback only upon request, and the feedback employees receive from other employees is commonly shared with the supervisor. In this study, I investigate which employees choose to provide their supervisor with evaluation-relevant information about themselves by requesting feedback, and how this information is used by supervisors in their subjective evaluations of employees. I predict that high performers are more likely to request feedback in a demand-driven feedback system, and that the feedback is informative for evaluations of performance while the feedback request is informative for evaluations of potential. Using data from a large European company, I find support for these predictions. My results suggest that demand-driven feedback systems can be used as an additional source of information for evaluation and resource allocation purposes. However, they may not be effective in supporting the performance development of most employees and low performers in particular when feedback is shared with evaluators.
Transparency and biases in subjective performance evaluation
By: Jan Bouwens (Amsterdam Business School), Christian Hofmann (LMU Munich) and Christopher Lechner (LMU Munich)
Abstract: One of the major functions of accounting is to report unbiased numbers. In this paper, we demonstrate how favoritism may bias results and also how greater transparency can mitigate this bias. We examine whether one subtle feature of transparency – the physical presence of a stakeholder during the evaluation process – mitigates favoritism biases in subjective evaluations. Using archival data from professional ski jumping, we find that, controlling for objective performance indicators, subjective evaluations suffer from favoritism. In particular, evaluators favor athletes of their own nationality and athletes that have a compatriot on the evaluation panel. We test our transparency hypothesis taking advantage of the situation where, during lockdowns, sports competitions took place without an audience on-site. We predict and provide evidence that the physical presence of an audience during the decision-making process is associated with lower levels of favoritism in subjective evaluations. As such, we contribute to the accounting literature by highlighting how transparency may decrease the likelihood that subjective evaluations are biased by favoritism.
Multi-rater performance evaluation and calibration: Managing multiple opinions
By: Jasmijn C. Bol (Tulane University), Maximillian Margolin (Erasmus University Rotterdam) and Daniel Schaupp (WHU – Otto Beisheim School of Management)
This paper studies multi-rater performance evaluation and calibration. Specifically, we examine how supervisors use their discretion to weight multi-rater assessments and how calibration committees make decisions to adjust these employee performance evaluations. Using data from an e-commerce company, we document that supervisors use their discretion to weight multi-rater assessments consistent with the aim to improve the informativeness of employee performance evaluations by emphasizing (deemphasizing) ratings that are relatively more (less) informative. However, we find that these weighting efforts can be constrained by a high information load placed on the supervisor and supervisor bias. Furthermore, we document that calibration committees analyze the performance information provided and are less likely to adjust supervisors’ weighting decisions when the supervisor relied more strongly on more informative multi-raters’ assessments as well as when the supervisor provided more substantiated argumentation for their decision. We also find that the extent to which the calibration committee relies on different information sources depends on job type, and more focus is placed on those employee cases that are more suspect of supervisor bias.
Day 3, Optional workshop
Eye Tracking, Pupillometry and Psychophysiological Assessment in Management Accounting (and other Business Disciplines): Lessons and Advances
By: Monash Business Behavioural Laboratory, Monash University
The workshop will focus on practical aspects of the use of eye tracking, pupillometry, and psychophysiological assessment techniques (e.g., electrodermal activity assessment, or skin conductance, and electrocardiography) for theory building and testing in management accounting and other business disciplines.
The workshop will start with a brief history of neuroaccounting, its developmental trajectory, claimed potential and a general outline of insights gained to date. A quick primer into the technologies – such as eye tracking, pupillometry, skin conductance, and electrocardiography – will be provided. We will then discuss practical aspects of the use of these technologies based on several recently published articles and a couple of ‘under review’ studies conducted by our team. We will wrap up by outlining several promising trends in the use of these technologies to advance theory building and testing in accounting.
The workshop is planned in a form of a dialogue with the participants, so there will be an opportunity to deep dive in any of the above aspects given the demand from the audience.
About the workshop facilitator
Kristian Rotaru is an associate professor of accounting information systems and the Chair of the Steering Committee at Monash Business Behavioural Laboratory, Monash University. He uses laboratory experiments to study individual decision-making, including its neurophysiological basis, in such contexts as subjective performance evaluation, audit risk assessment, financial decision-making, and judgmental forecasting. He also designs and tests interventions for behavioural change, including interventions to mitigate such pervasive cognitive biases as disposition effect and algorithm aversion. In his research, Kristian uses such neurophysiological techniques as eye tracking, pupillometry, electrodermal activity assessment, electrocardiography, and functional imaging.
Registered participants can join this workshop using the provided password and Zoom link.