Journal article 399 views
Causal Attribution, Benefits Sharing, and Earnings Management*
Contemporary Accounting Research, Volume: 39, Issue: 2, Pages: 893 - 916
Swansea University Author: Lukas Helikum
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DOI (Published version): 10.1111/1911-3846.12755
Abstract
We conduct two experiments to investigate the joint effect of two justification factors of earnings management—namely, attribution for the firm's underperformance and benefits accruing to other employees from inflating reported earnings. This investigation is important because prior research ex...
Published in: | Contemporary Accounting Research |
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ISSN: | 0823-9150 1911-3846 |
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Wiley
2022
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URI: | https://cronfa.swan.ac.uk/Record/cronfa64538 |
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v2 64538 2023-09-13 Causal Attribution, Benefits Sharing, and Earnings Management* b4dd73821ce17c52521386cd177395bb 0000-0002-9392-6165 Lukas Helikum Lukas Helikum true false 2023-09-13 BAF We conduct two experiments to investigate the joint effect of two justification factors of earnings management—namely, attribution for the firm's underperformance and benefits accruing to other employees from inflating reported earnings. This investigation is important because prior research examines the effects of individual justification factors, whereas real-world settings entail more complexity involving multiple justification factors. In Experiment 1, we predict and find that managers are more likely to manage earnings when the firm's underperformance is caused by an external event and misreported earnings benefit other employees besides the reporting manager. Furthermore, we show that the extent to which participants use moral justifications mediates the effect of benefits sharing on earnings management, but only when causal attribution is external, and that it mediates the effect of causal attribution on earnings management, but only when benefits are shared. In Experiment 2, we use a neutral control condition that makes no mention of inconsistent incentives to demonstrate that it is the combination of causal attribution and benefits sharing that triggers earnings management. We contribute to the accounting and psychology literature by proposing and testing a theory that explains how multiple justification factors interact to cause opportunistic behavior. Our results suggest that policy-makers and governing parties should consider developing a holistic view of possible justification factors, focusing on situational opportunities created by combinations of factors rather than individual factors alone. Journal Article Contemporary Accounting Research 39 2 893 916 Wiley 0823-9150 1911-3846 Earnings management, causal attribution, benefits sharing, justifiability, fairness, attribution causale, équité, gestion des résultats, justifiabilié, partage des bénéfices 1 6 2022 2022-06-01 10.1111/1911-3846.12755 http://dx.doi.org/10.1111/1911-3846.12755 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2023-10-04T11:26:48.9556570 2023-09-13T14:48:06.6086457 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Lukas Helikum 0000-0002-9392-6165 1 Hun‐Tong Tan 2 Tu Xu 3 |
title |
Causal Attribution, Benefits Sharing, and Earnings Management* |
spellingShingle |
Causal Attribution, Benefits Sharing, and Earnings Management* Lukas Helikum |
title_short |
Causal Attribution, Benefits Sharing, and Earnings Management* |
title_full |
Causal Attribution, Benefits Sharing, and Earnings Management* |
title_fullStr |
Causal Attribution, Benefits Sharing, and Earnings Management* |
title_full_unstemmed |
Causal Attribution, Benefits Sharing, and Earnings Management* |
title_sort |
Causal Attribution, Benefits Sharing, and Earnings Management* |
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b4dd73821ce17c52521386cd177395bb |
author_id_fullname_str_mv |
b4dd73821ce17c52521386cd177395bb_***_Lukas Helikum |
author |
Lukas Helikum |
author2 |
Lukas Helikum Hun‐Tong Tan Tu Xu |
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Journal article |
container_title |
Contemporary Accounting Research |
container_volume |
39 |
container_issue |
2 |
container_start_page |
893 |
publishDate |
2022 |
institution |
Swansea University |
issn |
0823-9150 1911-3846 |
doi_str_mv |
10.1111/1911-3846.12755 |
publisher |
Wiley |
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Faculty of Humanities and Social Sciences |
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Faculty of Humanities and Social Sciences |
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Faculty of Humanities and Social Sciences |
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School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance |
url |
http://dx.doi.org/10.1111/1911-3846.12755 |
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description |
We conduct two experiments to investigate the joint effect of two justification factors of earnings management—namely, attribution for the firm's underperformance and benefits accruing to other employees from inflating reported earnings. This investigation is important because prior research examines the effects of individual justification factors, whereas real-world settings entail more complexity involving multiple justification factors. In Experiment 1, we predict and find that managers are more likely to manage earnings when the firm's underperformance is caused by an external event and misreported earnings benefit other employees besides the reporting manager. Furthermore, we show that the extent to which participants use moral justifications mediates the effect of benefits sharing on earnings management, but only when causal attribution is external, and that it mediates the effect of causal attribution on earnings management, but only when benefits are shared. In Experiment 2, we use a neutral control condition that makes no mention of inconsistent incentives to demonstrate that it is the combination of causal attribution and benefits sharing that triggers earnings management. We contribute to the accounting and psychology literature by proposing and testing a theory that explains how multiple justification factors interact to cause opportunistic behavior. Our results suggest that policy-makers and governing parties should consider developing a holistic view of possible justification factors, focusing on situational opportunities created by combinations of factors rather than individual factors alone. |
published_date |
2022-06-01T11:26:50Z |
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11.03559 |