Quasi-experimentation - design and analysis issues for field settings - cook,td, campbell,dt

Abstract Rooted in contingency theory, this study puts forth propositions stating (1) that superiors of business units which face higher environmental uncertainty will use a more subjective performance appraisal approach whereas superiors of business units which face lower environmental uncertainty will use a more formula-based performance evaluation approach, and (2) that a stronger fit between environmental uncertainty and performance evaluation style would be associated with higher business unit performance. Findings from 58 business units in eight Fortune 500 firms provide strong support to both sets of these propositions.

Appropriateness of accounting data in performance evaluation: an empirical examination of...

This study presents a review of academic research on audit quality. We begin with a review of existing definitions of audit quality and describe general frameworks for establishing audit quality. Next, we summarize research on indicators of audit quality, such as inputs, process, and outcomes. Finally, we offer some suggestions for future research. The study should be useful to academics interested in audit quality as well as to the Public Company Accounting Oversight Board (PCAOB) and other regulators.

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Audit Quality: Insights from the Academic Literature

SUMMARY: This study presents a review of academic research on audit quality. We begin with a review of existing definitions of audit quality and describe general frameworks for establishing audit ...

/pdf/audit-quality-insights-from-the-academic-literature-12piqz9bgo.pdf

This study examines the processes through which the availability of broad-based strategically relevant performance information impacts on the performance outcomes of organizations. We explore the role of evaluation mechanisms in influencing managers’ use of broad-based performance measurement information for feedback and feed-forward control. We hypothesize that these resultant decision-making patterns impact the exploitation and identification of strategic capabilities within an organization and in turn organizational performance. Using a structural equation model, we find support for a model in which the degree of commonality between measures identified as decision-facilitating and decision-influencing is significantly associated with the use of decision-facilitating measures for both feedback and feed-forward control. In turn, the extent to which decision-facilitating measures are actually used by strategic business unit managers impacts on the strategic capabilities of the organization and subsequently its performance. Overall the results suggest that to encourage managers to use the multiple financial and non-financial performance indicators increasingly incorporated in contemporary performance measurement systems it is imperative that performance evaluation schemes are also designed to reflect these measures. To the extent performance evaluation schemes do not reflect such decision-facilitating measures it is less likely managers will use these indicators to effectively manage performance. The resultant performance implications for the organization arise from the impact of these decision effects on the exploitation of existing capabilities and the search for and identification of new strategic opportunities.

The role of performance measurement and evaluation in building organizational capabilities and performance

Purpose – The purpose of this paper is to examine the attributes of the performance appraisal system used for primary school teachers in Singapore, and how those attributes affect satisfaction with the appraisal system, stress experienced with the appraisal system, attitudes towards performance bonus, job satisfaction and motivation, and perceived cooperativeness amongst teachers.Design/methodology/approach – Data were obtained from surveys of primary school teachers in Singapore (n=85). The researchers used factor analysis to identify factors of appraisal system attributes and factors of teacher attitudes and perceptions, and then employed step‐wise multiple regressions to relate appraisal system attributes to teacher attitudes and perceptions.Findings – The findings indicate that fairness of the performance appraisal system and clarity of appraisal criteria are related to greater satisfaction with the appraisal system, more positive attitudes towards performance bonus, and higher job satisfaction and mo...

Teacher appraisal and its outcomes in Singapore primary schools

This paper examines how adding leading non-financial value drivers to a lagging summary financial measure affects managerial decision making in firms where either intangible assets (intangible assets firm) or tangible assets (tangible assets firm) are more important for future financial performance. Using an experiment, I compare a control performance evaluation system (PES) with feedback and incentives on only a summary financial measure to a PES with added feedback on non-financial measures and a PES with added feedback and incentives on non-financial measures. I find that managers increase their decision quality more in the intangible assets firm than in the tangible assets firm when both feedback and incentives on non-financial measures are added, but not when only feedback on non-financial measures is added. Early in the experiment, managers of the intangible assets firm do not make better decisions with the adding of only feedback on non-financial measures, but do so with the further adding of incentives on non-financial measures. However, managers of the intangible assets firm improve their decisions over time with the adding of only feedback on non-financial measures. On the other hand, managers of the tangible assets firm do not make better decisions with the adding of only feedback on non-financial measures nor with the further adding of incentives on non-financial measures. The results suggest that the benefits of adding non-financial value drivers may vary based on a firm's dependency on tangible versus intangible assets, and on whether the non-financial value drivers are explicitly rewarded in the incentive contract.

Feedback and Incentives on Non-Financial Value Drivers: Effects on Managerial Decision Making

Audits are claimed to not only enhance the detection of fraud but also the deterrence of fraud. This study examines whether different audit procedures and attitudes conveyed to management deter aggressive earnings management that may be fraudulent, and whether such different procedures and attitudes conveyed influence managers’ perceptions about the ethicality of any anticipated earnings management. In an experiment with 171 senior corporate managers, we find that compared to the condition where the audit proceeds the same as last year, managers anticipate that there would be less earnings management when the nature of evidence collected has increased probative value; and when the auditor conveys a more sceptical attitude via more critical inquiry combined with either an increase in the evidence extent (increased sample size) or the nature of the evidence. However, this reduction in anticipated earnings management is not found with either the increased extent of evidence collected alone or more critical inquiry alone, suggesting that a combination of action and attitude changes compared to a change in either action alone or attitude alone better signals to managers the heightened scepticism that enhances the effectiveness of auditor deterrence. We also find, after controlling for the underlying ethical disposition of managers, that the different audit procedures and attitudes conveyed to management affect managers’ perceptions of the ethicality of anticipated earnings management. Interestingly, the conditions that engender greater earnings management also paradoxically increase managers’ perceived unethicality of the anticipated earnings management. Together these findings have implications for how different changes in audit approaches may result in differential managerial responses about their intention to commit fraud and its appropriateness. This study is one of the first papers to provide experimental empirical evidence that specific audit actions conveying heightened scepticism have significant influence on managerial judgments and behaviours with respect to committing aggressive earnings management.

Do changes in audit actions and attitudes consistent with increased auditor scepticism deter aggressive earnings management? An experimental investigation

We investigate the effects of tangible versus cash rewards in a repeated tournament setting. Firms frequently use tangible rewards to motivate employees, but minimal research has examined their effects relative to cash rewards. We conducted a field experiment at a rug wholesaler that held two consecutive sales tournaments for its retailers. The top three retailers in each tournament received either cash rewards or tangible rewards (gift cards) to be distributed to sales staff. We do not find significant effects of reward type in the first tournament. However, in the second tournament, retailers eligible for tangible rewards significantly outperformed those eligible for cash rewards, and this effect is driven by Tournament One losers. Our results are consistent with the theory that Tournament One losers competing for tangible rewards increased sales effort in the second tournament significantly more than their counterparts competing for cash rewards. Our results have practical and theoretical imp...

Khim Kelly

Papers

Teacher appraisal and its outcomes in Singapore primary schools

Feedback and Incentives on Non-Financial Value Drivers: Effects on Managerial Decision Making

Do changes in audit actions and attitudes consistent with increased auditor scepticism deter aggressive earnings management? An experimental investigation

The Effects of Tangible Rewards versus Cash Rewards in Consecutive Sales Tournaments: A Field Experiment

Feedback and Incentives on Nonfinancial Value Drivers: Effects on Managerial Decision Making*