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Advances in Accounting Education Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-84950-867-4

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Book part
Publication date: 13 December 2004

Kristin Wentzel

Prior research demonstrates a positive relationship between information asymmetry and managers’ use of budgetary slack and thereby suggests that minimizing managers…

Abstract

Prior research demonstrates a positive relationship between information asymmetry and managers’ use of budgetary slack and thereby suggests that minimizing managers’ private information is a potential tactic for reducing slack in budgets. Asymmetric information, however, often cannot be avoided when specialized technical expertise is required to operate a particular responsibility area. This study contributes to the literature by investigating whether favorable perceptions of fairness mitigate managers’ use of budgetary slack during participative environments in which managers hold private information. Overall, the findings demonstrate the benefits of fair budgeting practices. In particular, survey results suggest that the presence of budgetary slack in efficiency targets is lower for managers who hold favorable fairness perceptions. A gender effect is also demonstrated between perceptions of fairness and the presence of budgetary slack in spending targets. Factor analytical evidence toward the development of a more refined measure of budgetary slack is provided.

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Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-139-2

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Book part
Publication date: 20 December 2000

David Ryan and Kristin Wentzel

The purpose of this study is to examine the influence of causal attributions and budget emphasis on individuals' framing perceptions and risk preferences under conditions…

Abstract

The purpose of this study is to examine the influence of causal attributions and budget emphasis on individuals' framing perceptions and risk preferences under conditions of unfavorable budget variances. Prospect theory maintains that risk preferences are domain-specific; individuals tend to be risk-averse in gains and risk-seeking in losses. Prior accounting research has found that while individual actions clearly reflect prospect theory propositions during situations of gain, individuals demonstrate risk indifference when faced with situations of loss. We investigate potential explanations for this lack of strict adherence to prospect theory during situations of loss. Our study uses internal and external attributions and pressure to meet budget targets for performance appraisals to create salient loss conditions. The results demonstrate that budget decisions vary depending on the casual factors of the unfavorable variance and on the degree of emphasis placed on achieving time budget targets. As expected, subjects exhibited relatively more risk seeking behavior when faced with internal attributions and when they expected a greater emphasis on meeting budgetary goals in performance assessment. Our results also demonstrate the importance of controlling for framing effects in prospect theory related tests.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-84950-055-5

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Book part
Publication date: 5 January 2015

C. Andrew Lafond and Kristin Wentzel

The subject area of the assignment is cost accumulation. This instructional tool enhances coverage of cost accumulation topics in graduate level Introductory to Management

Abstract

Purpose

The subject area of the assignment is cost accumulation. This instructional tool enhances coverage of cost accumulation topics in graduate level Introductory to Management Accounting courses.

Methodology/approach

The assignment entails visiting a small business and interviewing the owner to learn about the company’s process for determining costs of products and/or services. Such active learning hones leadership and critical thinking skills by requiring students to employ interviewing and listening techniques as they act as business advisors to discuss cost accumulation processes with small business owners. The assignment provides flexibility since a range of business types can be used from a landscaping business operated out of one’s garage to a mid-size manufacturing company.

Findings

Students see how a small business accumulates costs and gain experience analyzing the effectiveness of cost accumulation systems and providing recommendations.

Practical implications

A list of supplementary materials is included, covering teaching notes, assessment data, and grading rubrics.

Originality/value

Student feedback suggests that students value the opportunity to engage in a realistic exercise that allows them to draw linkages between textbook material and the real world, while also acting in a consulting role to apply class concepts to small businesses. Furthermore, assessment data based on grading rubrics indicate that all students meet or exceed instructor expectations, thus increasing the viable use of this course project.

Details

Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-78441-587-7

Keywords

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Book part
Publication date: 24 April 2007

Abstract

Details

Advances in Accounting Education Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-84950-867-4

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Book part
Publication date: 30 September 2003

Abstract

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-84950-231-3

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Book part
Publication date: 20 December 2000

Abstract

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-84950-055-5

To view the access options for this content please click here
Book part
Publication date: 13 December 2004

Abstract

Details

Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-139-2

To view the access options for this content please click here
Book part
Publication date: 13 December 2004

Abstract

Details

Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-139-2

To view the access options for this content please click here
Book part
Publication date: 1 October 2015

Abstract

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78441-635-5

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