The value of self-reported costs in repeated investment decisions

Article Abstract:

Management control procedures improve planning and employee motivation because they improve the flow of information concerning production processes. A principal-agent model incorporating endogenous demands for cost reports, and which is characterized by optimal contracts, is used to examine the value of self-reported costs in repeated investment decisions. In the model, a principal uses an agent for implementing investment decisions in which the agent's wealth is subject to bankruptcy constraints and cannot fall below zero. The principal incorporates the agent's cost reports within an optimal contract; as a substitute for cost verification, the agent can write long-term contracts. Research reveals a value to communication in long-term contracts, which relax the bankruptcy constraints and isolate both the benefits and costs of communication.

Management research, Communication, Communications

---

Solicitation and auditor reporting decisions

Article Abstract:

A study is conducted to determine if state rules on direct univited solicitation influence the decisions of auditors concerning the type of audit report to issue. The relationships existing among information dissemination, client-auditor alignment and auditor independence are investigated. Such a study is made possible by the lack of uniformity in state boards' direct solicitation regulations in the 1980s because some states lifted restrictions on solicitations while other states did not. Results of a logistic regression analysis indicate that, among relatively small markets, there is a higher probability for auditors to issue nonstandard reports in markets where solicitation is permitted than in markets where it is banned.

Accounting & Auditing Services, Accounting, Tax Preparation, Bookkeeping, and Payroll Services, Auditing, Business reports

---

Effects of outcome information on evaluations of managerial decisions

Article Abstract:

The effects of outcome data on managerial decision analyses are examined. Hypotheses based on cognitive considerations are developed about a base-line result of outcome data and attenuation of that effect by: evaluator's previous involvement with evaluatee's decision process, and the degree to which reported outcomes suggest evaluatee responsibility for expecting such results. The results of an experiment set within the capital budgeting context confirm the hypotheses. Results are considered as they relate to information system design and the process of generalizing psychological study into the context of accounting.

Decision-making, Decision making, System design, Systems analysis, Accounting and auditing, Capital budgets

Similar abstracts:

• Abstracts: The role of credit strategy in creating competitive advantage. Questions You Should Answer Before You Sell on Credit
• Abstracts: Clients as 'partial' employees of service organizations: role development in client participation. Political-cultural analysis of organizations
• Abstracts: Facade and self-deception in the deteriorating financial firm. The behavioral foundations of public policy-making
• Abstracts: Steel: a classic case of industrial relations change in Britain. The structures of industrial development
• Abstracts: The hidden danger in bond yields. Selected yields. Advertising and profitability: testing alternative hypotheses

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.