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The purpose of this paper is to introduce counterfactual analysis and reasoning to the study of accounting history. The counterfactual focus is the institutionalisation of public accountancy in the UK.

The study adopts a counterfactual research design using Ferguson and Bunzl and asks a “what if” question of an event of importance to accounting historians in order to create a plausible counterfactual outcome that is grounded in rationality and causal analysis. The specific counterfactual question relates to the royal charter granted to public accountants practicing in Edinburgh in 1854. The counterfactual outcome is compared to the actual timeline of public accountancy institutionalisation in the UK.

The “alternative” history reveals uncertainties that confronted public accountants in the past and provides a basis for suggesting that the current fractured and inefficient state of institutionalised public accountancy in the UK has its origins at least partially in the 1854 royal charter. It also suggests that attempts to register and unify public accountants in the UK have been hindered by nineteenth century royal charters.

The study argues that counterfactual analysis is a useful historical tool with which to understand the consequences of historical decisions made in the professional project of British public accountancy. In addition, the study reveals the potential for counterfactual analysis to illumine the consequences of decisions in other areas of accounting and auditing history.

This study is the first counterfactual analysis in the accounting history literature and therefore provides a template for further studies and improved research design.

Commentators express concern that when auditors investigate for but fail to detect fraud, jurors might effectively penalize the auditors for having investigated for the fraud (AICPA, 2004; Coffee, 2004; Golden, Skalak, & Clayton, 2006). Consistent with these concerns, Reffett (2010) finds that, in a between-participants setting, evaluators in cases of undetected fraud are more likely to hold auditors liable for damages when the auditors identified the perpetrated fraud as a fraud risk and then investigated for the fraud, relative to when the auditors did neither. What remains unclear, however, is the extent to which identifying versus investigating fraud risks increases evaluators’ between-participants assessments of auditor liability. That is, when auditors investigate for, but fail to detect fraud, is the increase in evaluators’ liability assessments due to the fact that the auditors identified (i.e., were aware of) the fraud risk but did not detect the fraud, or that the auditors unsuccessfully investigated for the fraud (or both)? This study addresses these questions by reporting evidence that both identifying and investigating fraud risks can each, in isolation, increase evaluators’ perceptions of auditor negligence. The processes by which identifying and investigating fraud risks increase evaluators’ negligence verdicts, however, appear to differ.

Graduates of cross-cultural management (CCM) courses should be capable of both tackling international and cross-cultural situations and creating positive value from the diversity inherent in these situations. Such value creation is challenging because these situations are typically complex due to differences in cultural values, traditions, social practices, and institutions, such as legal rules, coupled with variation in, for example, wealth and civil rights among stakeholders. The paper aims to discuss these issues.

The authors argue that a scientific mindfulness approach to teaching CCM can help students identify and leverage positive aspects of differences and thereby contribute to positive change in cross-cultural situations.

Scientific mindfulness combines mindfulness and scientific thinking with the explicit goal to drive positive change in the world.

The authors explain how the action principles of scientific mindfulness enable learners to build positive value from cultural diversity. The authors then describe how to enact these principles in the context of CCM education.

Erroneous perceptions of relevance contribute to business projects not being successful. Although the importance of relevance is recognized in the project management literature, thus far there has not been a formal framework for addressing erroneous perceptions of relevance. The purpose of this paper is to introduce a framework for identifying and counteracting erroneous perceptions of relevance.

The research comprised review of the literature relating to factors that contribute to, and methods that counteract, erroneous perceptions of relevance.

Contributory factors to erroneous perceptions of relevance include cultural cognition, path dependencies, lock-ins, fads, and hype. Mediating factors include priming and questioning, counterfactual reasoning, and optimal stopping.

A classification of erroneous perceptions of relevance is introduced Type III (inept positive) errors, Type II (false negative) errors, and Type I (false positive) errors. This terminology has the advantage of already being known to academics through statistical hypothesis testing, and to practitioners through process capability studies.

The introduction of a framework for identifying and counteracting erroneous perceptions of relevance can better enable practitioners to make the selection of relevant concepts and technologies for projects – a capable process.

The originality of this research note is that it provides a framework that can be applied to increase objectivity in perceptions of relevance. The value of this research note is that it introduces a framework for identifying and counteracting erroneous perceptions of relevance before the application of methods such as cost-benefit analysis.

The study aimed to explore the effect of second year business students engaging in counterfactual reasoning on their unrealistic optimism regarding attainment on an employability module.

Using an experimental design, the study compared the module performance of those who generated reasons why they would and would not achieve a series of specific grades. A control group who did not generate any reasons also took part.

Students who generated reasons why they would not achieve a good grade were less likely to be unrealistically optimistic and more likely to attain a good grade on their assessment.

This is a small sample of students from one form of programme, so replication with a greater sample drawn from other programmes would increase reliability.

The results suggest an easily applied and practical way of engaging students in employability modules to support their development of a range of capitals.

The findings are considered in relation to the theory of possible selves, the value for students, particularly widening participation of students, of improved engagement with employability modules and the possibility of applying this technique in wider educational settings.

This paper extends Hoch’s (1985) original study by considering the use of counterfactual reasoning for assessment performance and offering a an easy-to-apply tool for module leaders to support student attainment in employability development modules.

The article engages with Amartya Sen’s interpretation of Piero Sraffa’s Production of Commodities by Means of Commodities (PCMC). Sen has the distinction of highlighting the philosophical and methodological aspects of Sraffa’s work. In this regard, Sen has highlighted the role of counterfactuals in economic theory and the role of value theory in political economy as a matter of “social communication.” On these two issues, there is considerable discussion in recent Sraffian scholarship that is concerned with the significance of Sraffa’s critique of marginalist theory and the rehabilitation of classical economics. The article scrutinizes Sen’s interpretation of PCMC and highlights several noteworthy contributions and insights. While being sympathetic to the substantive points of criticism entailed by PCMC, Sen misunderstands Sraffa’s “critique of economic theory” and the reasoning involved in such a critique. A critical reading reveals that Sen’s interpretation of Sraffa is more reflective of his own work on the “choice basis of description” than an appreciation of Sraffa’s theoretical project. Despite the misunderstandings, the article highlights the similarities in vision between Sen’s interpretation of Sraffa and Sraffa’s revival of classical economics. By undertaking such a critical reading, the article raises important issues about method and the scope of economic enquiries.

In this chapter, the author argues that Austrians are perhaps uniquely placed to be effective practitioners of causal inference techniques on observational data. This is because, while the methods are easy to implement, their validity and value lies in a detailed, “analytical/historical” narrative to accompany the findings. This is true for several reasons. (1) all the models have identifying assumptions (e.g., no spillovers and parallel trends) that are best addressed by an exposition of the institutional/economic/historical milieu in place before and after the treatment under study; (2) determination of external validity also requires detailed institutional and historical knowledge; and (3) researchers often want to know the mechanisms producing the reduced form result that comes out of most causal inference studies. Here again, institutional and historical learning is crucial. My conclusion is that Austrians should add the tools of causal inference with observational data to their arsenal of analysis. This would be good both for their publication prospects and for the profession at large.

This study tests a research model for promoting understanding of the responsibility attribution process.

A between-subjects experiment was conducted to test the hypotheses.

The results reveal that counterfactual thinking about how a system failure could have been prevented moderates the effect of cause of misstatement on perceived control. Counterfactual thinking about how an audit failure could have been avoided also moderates the effect of perceived control on causal account. Additionally, causal account mediates the effect of perceived control on responsibility judgment of an audit firm. Inclusion of audit firm size and auditor systems competency as control variables in the hypothesis tests and as grouping variables in the invariance tests does not alter the model results.

Research can guide the audit profession on development of innovative strategies for detecting fraud to protect the interests of decision-makers. Strategies can also be devised to prompt users to consider relevant factors to enhance their ability to arrive at an accurate assessment of an audit firm’s responsibility for an audit failure.

Regulators may need to address whether availability of advanced data analytic tools increases the audit firms’ responsibility for presenting convincing evidence suggesting due diligence in the audit work in the event of an audit failure.

This study examines the process variables influencing responsibility judgment of an audit firm. Elicitation of counterfactual thoughts before the participants responded to the questions measuring the process and dependent variables facilitates discernment of the intensity of counterfactual thinking on the variables examined in the research model.

This paper aims to explore the relationship between procedural, interpersonal, informational, and distributive justice and negotiator outcome satisfaction and desire for future negotiations (DFNs).

This research invokes and builds theories suggesting a link between perceptions of fair treatment and counterfactual generation. Data come from freely interacting negotiating dyads comprised of undergraduate students.

One's own outcomes obtained, procedural, informational, and distributive justice perceptions each uniquely predicted negotiator outcome satisfaction. Procedural and informational justice perceptions also indirectly affected outcome satisfaction through their effect on distributive justice perceptions. In turn, outcome satisfaction, and informational and interpersonal justice perceptions each uniquely predicted DFNs.

While this study reveals an important set of effects for study, it is correlational in nature. Future research should experimentally manipulate fair treatment to provide a true experiment and should also test the proposed mediators.

This paper suggests that listening to the other party, treating him or her with respect and dignity, and explaining oneself can have powerful consequences for the other party's outcome satisfaction and DFNs. Each of these, in turn, can affect one's own long run well‐being.

This is the first empirical study linking procedural and informational justice perceptions and negotiator outcome satisfaction. It is one of the few studies exploring a unique relationship between outcome satisfaction and procedural justice and may be the only one doing so with interactional justice in any setting. It investigates the effects of perceived fair treatment among relative equals rather than in the context of superiors and subordinates.