The Effects of Contract Framing on Misconduct and Entitlement

2018 ◽  
Vol 94 (3) ◽  
pp. 329-344 ◽  
Author(s):  
Jennifer E. Nichol
Keyword(s):  
Data Availability ◽  
Incentive Contract ◽  
Contract Framing ◽  
Sense Of Entitlement

ABSTRACT This study examines the effects of incentive contract framing on misreporting and entitlement. I conduct a 2 × 2 between-subjects experiment, manipulating incentive contract framing (Bonus/Penalty) and the awareness of the opportunity to misreport (Before Effort/After Effort). I predict and find that (1) penalty contracts cause a higher rate and degree of misreporting, and (2) this greater misreporting occurs due to a greater sense of entitlement to the incentive funds. Collectively, this study's theory and results indicate that while penalty contracts can sometimes increase effort relative to bonus contracts, they also encourage greater dishonesty in reporting when that effort is not successful. Data Availability: Contact the author.

Sticks and Carrots: The Effect of Contract Frame on Effort in Incomplete Contracts

2012 ◽  
Vol 87 (6) ◽  
pp. 1913-1938 ◽  
Author(s):  
Margaret H. Christ ◽  
Karen L. Sedatole ◽  
Kristy L. Towry
Keyword(s):  
Theoretical Model ◽  
Incomplete Contracts ◽  
Incentive Contracts ◽  
Incentive Contract ◽  
Incomplete Contract ◽  
Contract Framing

ABSTRACT In this study, we examine the effect of incentive contract framing on agent effort in an incomplete contract setting. Prior research suggests that when governed by complete incentive contracts, agents exert greater effort under penalty contracts relative to bonus contracts. However, in an incomplete contract setting, in which the incentive contract does not govern all tasks for which the agent is responsible, the agent's trust in the principal is relevant. In this setting, we predict that bonus contracts create a more trusting environment, and this effect spills over to tasks not governed by the incentive contract, such that bonus contracts elicit greater effort on these tasks as compared to penalty contracts. We develop and experimentally validate a theoretical model of the effects of contract frame on trust and effort in this incomplete contract setting. The main intuition behind the model is that the framing of an incentive contract affects the degree to which the contract terms are interpreted by the agent as a signal of mistrust. More specifically, penalty contracts engender greater distrust than do bonus contracts and, therefore, when contracts are incomplete, penalty contracts lead to lower effort on tasks not governed by the contract than do bonus contracts.

scholarly journals TEORI PROSPEK DAN KONSERVATISMA LAPORAN KEUANGAN

2019 ◽  
Vol 5 (1) ◽  
pp. 79-92
Author(s):  
Muhamad Safiq ◽  
Jogiyanto HM ◽  
Supriyadi Supriyadi ◽  
Ertambang Naha
Keyword(s):  
Financial Reporting ◽  
Business Students ◽  
Framing Effect ◽  
Class Action ◽  
Financial Statement ◽  
Incentive Contract ◽  
Future Studies ◽  
Research Results ◽  
Contract Framing ◽  
Risk Taker

This research was aimed to test the influence of incentive contract framing (framing effect) and class action (certainty effect) to financial reporting decision. Beside that, this research also investigated the interaction influence between framing effect and certainty effect. This research used laboratorium experiment design 2x2 between subjects. Experiment subjects were business students (MM and Maksi) Gadjah Mada University who were acted as management (CFO) with certain criteria. Research results showed that there was an influence of incentive contract framing and class action (litigation) to management’s (CFO) financial reporting decision. Subjects who were the insentive contract framed positively, tended to prepare more conservative financial statement. Vice versa, subjects who were the incentive contract framed negatively, tended to become risk taker, so that management (financial director) tended to prepare less conservative financial statement. But, the interaction result between incentive contract framing variable with class action (litigation) showed insignificant result. measurement problems are thought to affect these insignificant. Future studies are expected to give more attention to these problems.

Performance Comparison among Meta Classifier Algorithms in WEKA

2019 ◽  
Vol 1 (2) ◽  
pp. 106-112
Author(s):  
Nur Amiratun Nazihah Roslan ◽  
Hairulnizam Mahdin ◽  
Shahreen Kasim
Keyword(s):  
Social Networking ◽  
Performance Comparison ◽  
Data Availability ◽  
Data Mining Tool ◽  
Huge Data ◽  
Technology Advancement ◽  
The Social ◽  
The World ◽  
Media Platform ◽  
Mining Tool

With the rise of social networking approach, there has been a surge of users generated content all over the world and with that in an era where technology advancement are up to the level where it could put us in a step ahead of pathogens and germination of diseases, we couldn’t help but to take advantage of that advancement and provide an early precaution measures to overcome it. Twitter on the other hand are one of the social media platform that provides access towards a huge data availability. To manipulate those data and transform it into an important information that could be used in many different scope that could help improve people’s life for the better. In this paper, we gather all algorithm that are available inside Meta Classifier to compare between them on which algorithm suited the most with the dengue fever dataset. This research are using WEKA as the data mining tool for data analyzation.

New data-availability procedures echo PAGES’ long-standing commitment

2018 ◽  
Vol 26 (2) ◽  
pp. 48-48
Author(s):  
A Asrat ◽  
◽  
P Braconnot ◽  
E Book ◽  
C Chiesi ◽  
...  
Keyword(s):  
Data Availability

The Search for Order in Municipal Administration: Herman A. Metz and the New York City Experience, 1898–1909

2020 ◽  
Vol 47 (1) ◽  
pp. 55-74
Author(s):  
Ryan P. McDonough ◽  
Paul J. Miranti ◽  
Michael P. Schoderbek
Keyword(s):  
New York ◽  
New York City ◽  
Internal Control ◽  
York City ◽  
Internal Controls ◽  
Data Availability ◽  
Financial Reports ◽  
The Public ◽  
Operational Activities ◽  
The City

ABSTRACT This paper examines the administrative and accounting reforms coordinated by Herman A. Metz around the turn of the 20th century in New York City. Reform efforts were motivated by deficiencies in administering New York City's finances, including a lack of internal control over monetary resources and operational activities, and opaque financial reports. The activities of Comptroller Metz, who collaborated with institutions such as the New York Bureau of Municipal Research, were paramount in initiating and implementing the administrative and accounting reforms in the city, which contributed to reform efforts across the country. Metz promoted the adoption of functional cost classifications for city departments, developed flowcharts for improved transaction processing, strengthened internal controls, and published the 1909 Manual of Accounting and Business Procedure of the City of New York, which laid the groundwork for transparent financial reports capable of providing vital information about the city's activities and subsidiary units. JEL Classifications: H72, M41, N91. Data Availability: Data are available from the public sources cited in the text.

Accelerated Filing Deadlines, Internal Controls, and Financial Statement Quality: The Case of Originating Misstatements

2015 ◽  
Vol 29 (3) ◽  
pp. 551-575 ◽  
Author(s):  
Colleen M. Boland ◽  
Scott N. Bronson ◽  
Chris E. Hogan
Keyword(s):  
Internal Control ◽  
Internal Controls ◽  
Data Availability ◽  
Financial Statement ◽  
Similar Increase ◽  
Section 404 ◽  
Regulatory Changes ◽  
Rule Change ◽  
Initial Decrease

SYNOPSIS We examine whether regulations requiring accelerated filing deadlines and internal control reporting and testing affect financial statement reliability. Unlike prior research, we examine whether these regulatory changes are associated with an increase in the likelihood that misstatements originate in the period following the respective change. If the implementation of these rules causes a misstatement, then the misstatement would most likely occur in the period immediately following the rule change. We provide evidence that accelerated filers (AFs) experience an increase in the likelihood of an originating misstatement following the acceleration of filing deadlines from 90 to 75 days. Large accelerated filers (LAFs), however, do not experience a similar increase following this acceleration or the subsequent acceleration from 75 to 60 days. After the implementation of the SOX Section 404 internal control requirements, we find that the likelihood of an originating misstatement declined for AFs but not for LAFs. Taken together, the findings suggest that, although AFs experienced an initial decrease in financial statement reliability, this decrease was temporary. Data Availability: Data are publicly available from the sources identified in the text.

Does the Mandatory Adoption of IFRS Improve the Association between Accruals and Cash Flows? Evidence from Accounting Estimates

2018 ◽  
Vol 33 (1) ◽  
pp. 39-59
Author(s):  
Jimmy F. Downes ◽  
Tony Kang ◽  
Sohyung Kim ◽  
Cheol Lee
Keyword(s):  
Financial Reporting ◽  
Cash Flows ◽  
Data Availability ◽  
The European Union ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Accounting Estimates ◽  
Accounting Accruals ◽  
Future Cash Flows

SYNOPSIS We investigate the effect of mandatory International Financial Reporting Standards (IFRS) adoption in the European Union on the association between accounting estimates and future cash flows, a key concept of accounting quality within the International Accounting Standard Board conceptual framework. We find that the predictive value of accounting estimates improves after IFRS adoption. This improvement is largely driven by specific types of accounting estimates, such as accounts receivable, depreciation, and amortization expense. We also find that the improvement is concentrated in countries with larger differences between pre-IFRS domestic GAAP and IFRS. Our findings suggest that IFRS allow managers to exercise their judgment to provide information about future cash flows through the more subjective/judgmental portion of accounting accruals. JEL Classifications: M16; M49; O52. Data Availability: The data used in this study are from public sources identified in the study.

Interim Reporting Frequency and the Mispricing of Accruals

2018 ◽  
Vol 32 (3) ◽  
pp. 29-47
Author(s):  
Shou-Min Tsao ◽  
Hsueh-Tien Lu ◽  
Edmund C. Keung
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Data Availability ◽  
Financial Reports ◽  
Regulatory Changes ◽  
Sample Composition ◽  
Reporting Frequency ◽  
Over Time ◽  
Jel Classifications ◽  
Accrual Mispricing

SYNOPSIS This study examines the association between mandatory financial reporting frequency and the accrual anomaly. Based on regulatory changes in reporting frequency requirements in Taiwan, we divide our sample period into three reporting regimes: a semiannual reporting regime from 1982 to 1985, a quarterly reporting regime from 1986 to 1987, and a monthly reporting regime (both quarterly financial reports and monthly revenue disclosure) from 1988 to 1993. We find that although both switches (from the semiannual reporting regime to the quarterly reporting regime and from the quarterly reporting regime to the monthly reporting regime) hasten the dissemination of the information contained in annual accruals into stock prices and reduce annual accrual mispricing, the switch to monthly reporting has a lesser effect. Our results are robust to controlling for risk factors, transaction costs, and potential changes in accrual, cash flow persistence, and sample composition over time. These results imply that more frequent reporting is one possible mechanism to reduce accrual mispricing. JEL Classifications: G14; L51; M41; M48. Data Availability: Data are available from sources identified in the paper.

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