Determinants of Financial Managers' Willingness to Engage in Unethical Pro-Organizational Behavior

2017 ◽  
Vol 30 (2) ◽  
pp. 81-104 ◽  
Author(s):  
Matthias D. Mahlendorf ◽  
Michal Matějka ◽  
Jürgen Weber
Keyword(s):  
Organizational Behavior ◽  
Earnings Management ◽  
Organizational Identification ◽  
High Growth ◽  
Organizational Characteristics ◽  
Performance Targets ◽  
Subjective Evaluations ◽  
Prior Literature ◽  
Willingness To Engage

ABSTRACT We examine how financial managers' willingness to engage in unethical pro-organizational behavior depends on various individual and organizational characteristics. Using survey data from 253 respondents we find that unethical pro-organizational behavior is lower when financial managers are close to retirement and when they work in high-growth or in publicly listed companies. We also find that it is positively associated with financial managers' organizational identification and with their bonuses contingent on financial performance targets but not with bonuses contingent on nonfinancial targets or subjective evaluations. We rely on a follow-up survey to reestimate the latter effects after controlling for unobserved individual heterogeneity in a changes model and find consistent results. Finally, we use another follow-up survey to compare our measure of the willingness to engage in unethical pro-organizational behavior to proxies for earnings management used in prior literature.

Why narcissistic individuals engage in unethical pro-organizational behavior. Testing a moderated mediation model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Munisa Toirova ◽  
Yoonjung Baek
Keyword(s):  
Organizational Behavior ◽  
Organizational Identification ◽  
Empirical Support ◽  
Mediation Model ◽  
Content Type ◽  
Moderated Mediation Model ◽  
Final Sample ◽  
Ethical Counseling ◽  
The Relationship ◽  
Willingness To Engage

PurposeThe purpose of the current research is to study the relationship between narcissism and unethical pro-organizational behavior (UPB), and also examine whether status striving mediates the relationship between narcissism and UPB among individuals with high organizational identification.Design/methodology/approachData that was used to test the research model were collected from five companies in the trading sector in Tashkent, Uzbekistan. The final sample included 200 responses, among all participants 29.5% were in a leadership position.FindingsThe current research found that narcissism leads individuals to exhibit a willingness to engage in UPB. Furthermore, status striving mediates the relationship between narcissism and UPB among individuals with high organizational identification.Research limitations/implicationsResearch did not use actual reported UPB but measured employees' willingness to engage in UPB.Practical implicationsOrganizations should develop special ethics guidance to change the employee's perceptions of UPB from the act of helping or protecting the organization to undesirable behavior in the organization. Moreover, the organization may develop an ethical counseling program, by which individuals may perceive that ethical behavior is valuable for the organization.Originality/valueCurrent study examines the relationship between narcissism and UPB. Moreover, it provides empirical support for the notion that the relationship between narcissism and UPB is mediated by status striving among individuals with high organizational identification.

Earnings Management, Litigation Risk, and Asymmetric Audit Fee Responses

2006 ◽  
Vol 25 (1) ◽  
pp. 85-98 ◽  
Author(s):  
Lawrence J. Abbott ◽  
Susan Parker ◽  
Gary F. Peters
Keyword(s):  
Earnings Management ◽  
High Growth ◽  
Audit Fees ◽  
Discretionary Accruals ◽  
Litigation Risk ◽  
Audit Fee ◽  
Growth Firms ◽  
Price Earnings Ratio ◽  
Year 2000 ◽  
Conservative Bias

This study examines the association between audit fees and earnings management, using publicly available fee data. We hypothesize that, due to asymmetric litigation effects, audit fees decrease (increase) with a client's risk of income-decreasing (increasing) earnings management risk. We also hypothesize that the positive relation between income-increasing earnings management risk and audit fees is heightened for clients that are high-growth firms. We test our hypotheses with a sample of 429 public, non-regulated, Big 5 audited companies, using fee data for the year 2000. We find that downward earnings management risk, as estimated by negative (i.e., income-decreasing) discretionary accruals, is associated with lower audit fees. We also document that upward earnings management risk, as estimated by positive discretionary accruals, is associated with higher audit fees and that the interaction of this risk with an industry-adjusted price-earnings ratio has an incrementally significant, positive effect on fees. We interpret our findings as consistent with a conservative bias on the part of auditors. The conservative bias arises from asymmetric litigation risk in which income-increasing discretionary accruals exhibit greater expected litigation costs than income-decreasing discretionary accruals (Simunic and Stein 1996; Palmrose and Scholz 2004; Palmrose et al. 2004; Richardson et al. 2002; Heninger 2001).

Het belang van de context voor onderzoek binnen de organisatiepsychologie

2012 ◽  
Vol 25 (3) ◽  
Author(s):  
Wim van Breukelen
Keyword(s):  
Organizational Behavior ◽  
Contextual Factors ◽  
Field Studies ◽  
Cultural Factors ◽  
Organizational Characteristics ◽  
Research And Practice ◽  
Research Findings ◽  
The Individual ◽  
Underlying Processes ◽  
Voor Onderzoek

The importance of context in research on organizational behavior The importance of context in research on organizational behavior This article emphasizes the need to pay more attention to the context in field studies of organizational behavior. The context refers to factors external to the individual, which include organizational characteristics and societal and cultural factors. The context may offer additional explanations for research findings and may improve insights in underlying processes. In addition, a focus on contextual factors in a study may increase the fit between research and practice. This article describes the potential effects of contextual factors and offers possible reasons for the lack of attention to context in many studies. Finally, several recommendations are presented in order to bring contextual factors back into the study of behavior in organizations.

Does Mandatory IFRS Adoption Affect Audit Hours and the Effectiveness to Constrain Earnings Management? Evidence from Italy

2021 ◽  
Author(s):  
Stefano Azzali ◽  
Tatiana Mazza ◽  
Kenneth J. Reichelt ◽  
Dechun Wang
Keyword(s):  
Earnings Management ◽  
Empirical Analysis ◽  
Audit Quality ◽  
Ifrs Adoption ◽  
Hourly Rate ◽  
Prior Literature ◽  
Abnormal Accruals

We examine the effect IFRS adoption has had on audit effort and the effectiveness of greater audit effort on constraining earnings management. While prior studies have examined the costs of IFRS adoption, it is unclear whether IFRS adoption affects audit effort and whether extra audit effort results in higher audit quality. We find that following Italy's adoption of IFRS, audit hours (but not the hourly rate) increased, suggesting that audit effort (in audit hours) increased following IFRS adoption. We then examine whether more audit hours are associated with improved audit quality in the IFRS regime. Consistent with prior literature (Caramanis and Lennox 2008), we find that more audit effort is associated with lower abnormal accruals in the period before IFRS adoption. Interestingly, after Italy adopted IFRS, abnormal accruals are lower, but audit hours were less associated with lower abnormal accruals, implying that more audit hours are needed to constrain earnings management. Collectively, our empirical analysis suggests that while audit effort increased with mandatory IFRS adoption, the effectiveness of audit effort to constrain earnings management decreased.

scholarly journals Natural history of cavernous sinus meningiomas

2019 ◽  
Vol 130 (2) ◽  
pp. 435-442
Author(s):  
Aymeric Amelot ◽  
Remy van Effenterre ◽  
Michel Kalamarides ◽  
Philippe Cornu ◽  
Anne-Laure Boch
Keyword(s):  
Natural History ◽  
Medical Treatment ◽  
Cavernous Sinus ◽  
Incidental Findings ◽  
Survival Rates ◽  
High Growth ◽  
Benign Tumors ◽  
Growth Variability ◽  
History Of

OBJECTIVEMeningiomas confined to the cavernous sinus (MCSs) are benign tumors. Due to the high risk of severe complications, the intracavernous surgical procedure was abandoned in favor of radiotherapy. However, the choice of treatment remains complicated due to the fact that the natural history of this lesion has not yet been described.METHODSThe authors studied the natural history of this lesion using a prospective series of 53 consecutive patients suffering from MCSs. The median follow-up duration was 10.2 years (range 2–25 years), from 1990 to 2016.RESULTSPatients ranged in age from 30 to 72 years (mean 53 years). The meningiomas were diagnosed by major symptoms (mainly oculomotor palsy and neuralgia experienced in 28 patients), minor symptoms (headache, intermittent diplopia in 15 patients), or incidental findings (10 patients). Simple symptomatic treatment (short courses of corticosteroids and carbamazepine) allowed patients to become asymptomatic in 19 (67.9%) of 28 cases experiencing major symptoms, and for 12 (80%) of 15 patients with initial minor symptoms (p < 0.0001). All patients with incidental findings remained asymptomatic. Forty four (83%) of 53 MCSs did not show any significant growth and 42 (80%) of 53 patients were not symptomatic at the end of follow-up (p < 0.001). The radiographic progression-free survival rates (± SD) at 5, 10, and 20 years were 90% ± 4.2%, 82% ± 5.7%, and 70% ± 10.2%, respectively. Five patients (9.4%) with no evidence of any effect of the initial medical treatment desired additional conventional radiation therapy.CONCLUSIONSBecause of the capricious, unpredictable, and slow growth of MCSs, together with high growth variability from one patient to the next, the symptomatic medical treatment of these tumors is a highly effective method. This series shows that these lesions are naturally, clinically, and radiologically indolent.

Real Earnings Management: Do the Experience and Gender of Big4 Auditors Matters?

2021 ◽  
Vol 6 (3) ◽  
pp. 155-166
Author(s):  
Abdul Halim Chew Abdullah ◽  
Norman Mohd Saleh
Keyword(s):  
Quality Control ◽  
Earnings Management ◽  
Business Environment ◽  
Individual Characteristics ◽  
Moral Judgments ◽  
Real Earnings Management ◽  
Audit Firms ◽  
Prior Literature ◽  
And Gender ◽  
Stringent Quality

Objective - This study examines whether the experience and gender of auditors in Big4 firm in relationship of deterring Real Earnings Management (REM).Different from the majority of previous studies, this study focuses on auditors in Big4 audit firms and real earnings management within Malaysian business environment. Big4 audit firms are associated with high quality audit because of the reputation to uphold, thus adopted stringent quality control and assurance approach, systems and procedures. Once adopted, the effect of individual characteristics may become less important. Thus, it is questionable whether individual characteristics such as auditor experience and gender could still have an influence on the outcomes of an audit, in this case, REM, when the audit firms are Big 4 (assuming very stringent quality control procedures are adopted). Methodology/Technique –This study substantiates prior literature and conducted tests only on companies audited by Big4 audit firms. We also find that auditor experiences confirms to Agency Theory where REM reduces when the experience increases. Data was obtained from the Companies Commission of Malaysia (SSM), DataStream and Bursa Malaysia. Findings - The result confirms prior literature that auditor experience is still an important factor that can limit REM, even in companies audited by the Big4 firms. The results however reveal that Big4 female auditors do not have any significant effect in reducing REM. Novelty -Although female auditors are claimed by Gender Socialization Theory, to have better moral judgments than male auditors, the result shows both genders are equal, at least in limiting REM. Type of Paper: Empirical. JEL Classification: M40; M41; M42 Keywords: Big4 Auditors; Auditor Experience; Real Earnings Management; Auditor Gender; Bursa Malaysia

The effect of the need for subsequent seasoned equity offerings on earnings management motivation

2019 ◽  
Vol 18 (1) ◽  
pp. 25-52
Author(s):  
Guannan Wang ◽  
Moshe Hagigi
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Seasoned Equity Offerings ◽  
Common Stock ◽  
Equity Offerings ◽  
Content Type ◽  
Equity Issues ◽  
Total Magnitude ◽  
Prior Literature ◽  
Reported Earnings

PurposeMost prior literature focuses on how managers’ immediate needs affect their current earnings management. The purpose of this paper is to expand this body of literature by investigating the managerial motivation in a multi-period setting. The authors believe that managers’ incentive to engage in earning management around current equity issues is not only determined by the companies’ immediate need, but that it is also determined by their longer-term financing need.Design/methodology/approachThe authors examine all issuances of common stock, whether they are issued as seasoned equity offerings or whether as a reissuance of previously repurchased stock. They believe that the motivations for earnings management are similar for all these various stock-issuance events, which result in an increase in the number of outstanding common stock items.FindingsThe results of this paper reveal that those firms with less of a need for subsequent equity issuances are more likely to engage in “income- increasing” earnings management before their equity issuances. Conversely, equity issuers with more of a need for subsequent equity issuances would be more concerned about the potential impact of current earnings management on their future reported earnings and, therefore, would be less likely to manage earnings.Originality/valueThis paper contributes to the literature by extending the findings of the prior literature, showing that managerial discretion does not only affect the total magnitude of earnings management, but that it also impacts the timing of the earnings management activities. Insights gained from our research may contribute to the literature and enable a better understanding of firms’ financial reporting strategy from a longer-run view.

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