Search results
1 – 5 of 5Christine Nolder and James E. Hunton
Jost et al. (2003) theorizes and finds that business students, on an average, hold a positive fair market ideology (FMI), which suggests that they believe in the power of market…
Abstract
Jost et al. (2003) theorizes and finds that business students, on an average, hold a positive fair market ideology (FMI), which suggests that they believe in the power of market forces to reward ethical corporate behavior and punish unethical behavior; accordingly, they tend to make an implicit association between a company's financial performance relative to the stock market and the company's ethics. We suggest that audit education in professional skepticism and ‘red flag’ analysis will mitigate this implicit bias when a company's relative market performance is unusually distant from a referent benchmark, such as an industry average. In a between-participants experiment involving 94 non-audit and 94 audit business students, we measure their FMI, and examine how they perceive the ethicality of a company's management based on the referent direction (above or below the industry average) and referent magnitude (relatively close to or distant from the industry average) of the company's relative market performance. The results suggest that both non-audit and audit students indeed hold a positive FMI, and they ascribe favorable ethical perceptions to company performance that is relatively close to the industry average, irrespective of referent direction. When company performance is relatively distant from the industry average, neither group of students makes the implicit link. Overall, the findings do not indicate that audit education differentially affects business students’ perceptions of corporate ethics when a company's relative stock market performance deviates considerably from a referent benchmark.
Alex C. Yen, Tracey J. Riley and Peiyu Liao
The purpose of this paper is to investigate whether investor reactions to accounting narratives are uniform across cultures or if there are predictable systematic culture-based…
Abstract
Purpose
The purpose of this paper is to investigate whether investor reactions to accounting narratives are uniform across cultures or if there are predictable systematic culture-based differences, particularly for investors from interdependent cultures, such as in Asia.
Design/methodology/approach
This research paper builds on the experiment conducted in Riley et al. (2014) by collecting data from investors from interdependent cultures and comparing their investment judgments to the “baseline” judgments of the investors from Riley et al. (2014).
Findings
In comparing independent and interdependent culture investors, a culture by construal interaction is observed. Whereas the independent culture investors in Riley et al. (2014) made less favorable investment judgments of a company with a concretely (vs abstractly) written negative narrative, this effect is attenuated for interdependent culture investors.
Research limitations/implications
This study extends the literature on accounting narratives by providing evidence that investors’ culture and linguistic characteristics of accounting narratives “interact,” suggesting that future studies in this area should account for culture as a variable. As for limitations, the independent and interdependent participant data were predominantly collected from different universities, so the differences observed may be due to institutional, not cultural differences. However, the populations are matched on key demographic measures.
Practical implications
The results have practical implications for investor relations professionals and international standard-setting bodies.
Originality/value
This study is believed to be the first to examine how investors’ culture may affect their reactions to the features of accounting narratives.
Details
Keywords
Laura Smeets, Wim Gijselaers, Roger Meuwissen and Therese Grohnert
Learning from errors is a complex process that requires careful support. Building on affective events theory, the purpose of this paper is to explore how a supportive learning…
Abstract
Purpose
Learning from errors is a complex process that requires careful support. Building on affective events theory, the purpose of this paper is to explore how a supportive learning from error climate can contribute to social learning from errors through affective and cognitive error responses by individual professionals.
Design/methodology/approach
A total of 139 early-career auditors completed an online questionnaire consisting of validated survey scales, allowing for serial mediation analysis to compare direct and indirect effects.
Findings
Learning from error climate was directly and positively related to engagement in social learning activities after committing an error. Furthermore, the authors found a double mediation by error strain (an affective error response) and reflecting on errors (a cognitive error response) on this relationship.
Practical implications
Organizations can actively encourage professionals to learn from their errors by creating a supportive learning from error climate and holding professionals accountable for their errors.
Originality/value
The present study enriches the authors’ understanding of the mechanisms through which learning from error climate influences engagement in social learning activities. It extends prior research on learning from errors by investigating the sequential effects of engagement in error-related learning activities performed individually and in social interaction.
Details