Search results

The purpose of this paper is to investigate practicing auditors' beliefs regarding the effect of prior involvement on the occurrence of quality threatening behaviour (QTB) during an audit. The authors examine the extent to which auditors' beliefs about QTB are consistent with the theoretical framework of Kanodia et al., according to which prior involvement in audit work would increase the likelihood of auditors suppressing evidence inconsistent with earlier audit decisions.

The authors conduct an experiment in which auditors assess the likelihood of perceived reputation threats associated with encountering disconfirming evidence late in the audit, and the likelihood that such evidence will be suppressed.

Auditors participating in the study believe that prior involvement will induce a perception of personal reputation threats in an auditor encountering evidence inconsistent with the conclusions of earlier audit work. Participants perceive an auditor with prior involvement in the audit work to be more likely to suppress audit evidence than an auditor with no prior involvement; this effect is largely explained by the personal reputation threats believed to be induced by prior involvement.

The findings provide important information, from the perspective of practicing auditors, about a situational antecedent of QTB that is present on most audit engagements. Prior involvement is perceived by auditors to induce a conflict of interest in reporting troublesome evidence uncovered late in the audit. These perceptions suggest it is important to raise reviewers' awareness of the possibility of undesirable behavior in such situations. Potential limitations of the study relate to generalizability of the results under different levels of misstatement risk and under different environments in audit practice. Also, the authors do not measure auditors' actual behaviour, but their assessment of hypothetical situations and beliefs about others' actions. Future research can examine actual auditor behaviour in the presence of prior involvement.

The paper provides evidence on auditors' beliefs about the effects on QTB of prior involvement, a factor that has not been previously studied in this line of research. The authors show that auditors' beliefs about QTB are consistent with Kanodia et al.'s theoretical framework. The study is the first to measure auditors' assessments of perceived reputation threats and to show their mediating effect on the predicted behavior of audit professionals.

When a crisis occurs, do corporate social responsibility (CSR) activities protect organizational reputation by buffering negative effects or do CSR activities intensify negative effects, potentially leading to a worse reputation compared to if the organization had no prior CSR engagement? The authors hypothesize that if a crisis emerges in a domain aligned with an organization’s CSR initiatives (crisis-congruent CSR) backfire effects would arise, adversely affecting the organization’s reputation. Conversely, in cases of incongruence, where the crisis emerges in a domain not aligned with an organization’s previous CSR involvement, a buffering effect would manifest, protecting the organization’s reputation.

The authors conducted an experiment with a 3 (crisis-congruent, crisis-incongruent, and no CSR activities) × 2 (repeated measures) mixed factorial design. In the first scenario, no information was provided concerning a company’s social commitment. Alternatively, participants were exposed to an article illustrating the company’s dedication either to healthcare (crisis-incongruent commitment) or to combating sexism (crisis-congruent commitment). Afterward, participants were presented with a newspaper article addressing allegations of sexism against the company’s CEO.

The findings demonstrate that prior CSR activities have the potential both to serve as a buffer and to cause backfire effects in times of crisis. Domain congruence is the decisive moderator of these effects: Crisis-incongruent CSR activities acted as a buffer, crisis-congruent CSR activities “backfired” and led to more negative perceptions of the company’s reputation.

The study directly contributes to the understanding of CSR effects in crisis communication, while also addressing the often paradoxical and contradictory findings of prior studies.

The purpose of this paper is to provide meaningful information to sport organizations that have just recently started hosting sporting events in a new market and want to build long-term relationships with that market’s consumers.

Using self-administered questionnaires, the study surveys 463 spectators who attended the 2012 Formula One Korean Grand Prix.

Prior affect and existing sensory cues are crucial for spectators’ consumption behavior. Spectators’ prior event attendance plays a significant role on perceiving sensory stimuli as well as on consequent outcomes. This study also finds arousal significantly affected by seeing and hearing and prior affect. Arousal mediates the effects of these sensory stimuli and prior affect on satisfaction and revisit intention.

This study expands the knowledge on spectators’ experience at live sporting events. In addition, more dimensions of the mechanisms that are at work between cognitive elements and sensory stimuli are added to the existing knowledge of sport spectators’ behavior.

This paper aims to investigate consumer behaviour in response to social norms under pay-what-you-want (PWYW) pricing. Specifically, it explores the critical role of social norms such as norm priming and consumer prior trust in the retailer on consumers’ perceived price fairness, trust, willingness to pay, purchase intentions and intentions to spread negative word of mouth about the retailer.

Data on dependent measures were collected through the scenario-based online experimental approach and assessed using MANOVA analysis.

Results confirm the significance of norms by indicating the critical role of norm belief on consumer responses. Also, increasing the salience of norms by priming them usually intensifies negative behaviour, and pre-existing trust in the retailer serves as an imperfect cushion against consumer negative reactions to norm violation, but this effect is observed to be decreasing with increase in prior trust.

Further research should consider the contextual (time, place, media) influences and assumptions to increase the generalizability of the findings.

To the best of the authors’ knowledge, this is the first paper to explicitly examine the effects of social-norm compliance by sellers on consumer behaviour in the context of PWYW pricing.

Although consumers are viewed as one of the important target groups of new product preannouncements (NPPs), little existing literature focuses on the NPP's consequences from consumer perspective. To fill up this research gap, this paper explores how a NPP signal influences consumer purchase intention and how its influences vary across consumers.

Based on a scenario‐based survey with different new cellular phone preannouncement contexts, this paper examines impacts of brand, prior vaporware history, and innovativeness conveyed by NPP signals, as well as consumer characteristics, on purchase intentions. A logit regression and a hierarchical Bayesian Logit regression are applied to test effects of NPP signal and consumer factors, respectively.

The empirical results show that consumers may mainly rely on brand and prior vaporware history to decide whether to purchase this new product after it is launched. They are more likely to purchase a preannounced new product with strong brand, or from a company without prior vaporware. The results also demonstrate that the brand and vaporware impacts on purchase intention are moderated by consumer product knowledge, NPP experience, and risk attitude.

Following the competitive signal interpretation process model in signaling theory, this paper first provides and empirically examines an overall framework of NPP impacts on purchase intentions from the consumer perspective, which may contribute to the preannouncement literature. The findings also provide useful insights to help companies to make right NPP decisions.

Built upon brand attitude literature, particularly the cognitive dissonance theory and contrast theory, the authors' conceptual framework aims to explain how prior consumer satisfaction with each alliance partner affects consumer attributions (i.e. credit or blame) directed toward each partner for both highly satisfying and less‐than‐highly satisfying alliance experiences.

This paper extends the cognitive dissonance theory and contrast theory to the brand alliance context. Survey responses from 1,510 consumers, each having had purchase experiences with one of 18 brand alliances, were used to test hypotheses.

The authors identify which of the two theories provides greater explanatory power under varying conditions. Further, they find an intriguing host effect. That is, consumers tend to hold host partners more responsible for both highly satisfying and less‐than‐highly satisfying alliance encounters.

The authors' findings help firms better understand how consumers respond to alliance encounters. Practical insights include distinct advice for host versus guest partners in partner selection and resource commitments to alliance platforms.

This paper is among the first to investigate consumer reactions to actual alliance encounters, especially in market rather than experimental conditions. Further, whereas the literature has focused on positive consumer experiences with brand alliances, the authors' research includes both highly satisfying and less‐than‐highly satisfying alliance experiences and thus they uniquely report on the full range of alliance encounter outcomes.

The purpose of this paper is to propose a new measure of earnings management flexibility based on the limits of the allowable set of accruals, prior discretionary accruals used, and the reversal rate of these accruals.

Quarterly financial data from Compustat for the period 1990‐2009 were used to construct the flexibility measure. Then the author examined how well this measure captures flexibility by investigating its effect on a firm's probability of meeting analysts' forecasts.

The results show that this flexibility measure better captures the firm‐specific flexibility than that of Barton and Simko which captures mainly the difference in flexibility across industries. Further, the positive effect of their measure on a firm's probability of meeting/beating analysts' forecasts is not observed in the extended sample period.

The flexibility measure proposed here can assist investors, analysts, or researchers to compare earnings management flexibility across firms in the same industry, which is useful in evaluating the quality of a firm's financial reports, stock picking or credit granting decisions.

This paper contributes to the earnings management literature by incorporating both the variation in flexibility used and that in flexibility limits. Second, evidence in this paper suggests that while financial benefits motivate managers to undertake earnings management, flexibility determines the extent of earnings management they can undertake. Third, this study points out that the unreversed discretionary accruals impose a constraint on the level of discretionary accruals a manager can incur in the current period, and hence have an indirect influence on current reported earnings.

In the context of sequential multistage utilitarian service processes, the purpose of this study is to develop and validate propositions to study the impact of service quality (SQ) perceptions developed in intermediate stages, along with the impact of service gestalt characteristics, such as peak and end experiences, on quality perception at each stage and on overall service quality (OSQ) perception. The cascade phenomenon (interdependency between process stages) is considered in the evaluation of OSQ perception of customer, who experiences service through a series of planned, distinct and partitioned sequential stages.

In this paper, a conceptual framework is used to evolve the propositions. Subsequently, propositions are tested in three different utilitarian service contexts wherein customer survey was conducted for feedback on attributes at each stage, summary perception evaluations of each stage and OSQ evaluation of multistage process. Peak experiences, considered for OSQ evaluation, were defined by a suitable statistical technique. Ordinal logistic regression with nested models is the technique used for analyzing the data.

This work reveals significant cascade effect of summary evaluation of intermediate stages on the subsequent stage. Peak customer experience (negative or positive) is observed to be marginally significant on intermediate stage and OSQ evaluation. In addition, OSQ is observed to be influenced by summary perception evaluations of intermediate stages, which leads to better model adequacy. Finally, among all the stages, end stage performance is observed to have a significant impact on the overall multistage SQ.

The findings suggest that in view of the cascade effect of intermediate stages, managers need to allocate resources to ensure that all stages are performing at an adequate level instead of only focusing on improving peaks and end effects of customer experiences. The proposed approach is easy to implement and suitable for evaluating SQ and OSQ in varied multistage sequential utilitarian service environment.

An integrated approach for evaluation of SQ in sequential multistage utilitarian service processes is proposed from the perspective of cascade effect of intermediate stages and peak and end effects on OSQ perception.

The purpose of the study is to examine how awareness of the prior year fraud detection testing strategy impacts auditor judgments at differing levels of engagement risk.

A 2 × 2 between-subject experiment was conducted using 64 practicing auditors as participants. The independent variables are manipulated at two levels – awareness of prior-year testing strategy (aware versus unaware) and engagement risk (high versus low). The dependent measures are identified risk factors, targeted areas of auditors’ risk assessments, proposed audit procedures and the desire to consult with a forensic specialist.

Although continuing auditors anchor on prior-year audit strategies, new auditors (who are unaware of prior-year testing strategies) focus on generally known high-risk areas and firm standard procedures while planning the audit.

This paper contributes to the ongoing debate regarding how auditor tenure impacts auditors’ decision-making at a time when the profession and US regulators are focused on enhancing audit quality. The findings further suggest that auditors should take steps to enhance their judgments and avoid potential biases, particularly when planning continuing engagements.

Although the extant literature document anchoring by continuing auditors, this paper is the first to examine successor auditors’ fraud testing strategies. The findings suggest auditors on high-risk engagements who are unaware of the prior-year testing strategy may process information at a deeper level, as they are more likely to seek consultation with a forensic specialist rather than relying on simple heuristics.

The purpose of this paper is to understand how augmented reality (AR) try-on experiences facilitate consumers’ shopping decision. Focusing on the immersion and psychological ownership, the study investigated how the properties of AR experiences (environmental embedding (EE) and simulated physical control (SPC)) affect decision comfort.

This research theoretically and empirically analyzes how each property of AR experiences affects consequential psychological states and then further increases decision comfort by employing an existing AR try-on mobile application. A total of 99 valid responses were used for the partial least square structural equation modeling analysis. One’s prior AR try-on experience was predicted as a moderator and analyzed using SPSS-based PROCESS macro.

The results demonstrated that EE and SPC evoke immersion and the feeling of ownership of a virtual product, which increased decision comfort. The moderating effect of one’s prior AR try-on experience showed that the impact of EE and SPC on immersion was attenuated for those with prior experience. Further, immersion mediated the effect of EE but SPC on the feeling of ownership, which corroborated the direct effect of SPC on the feeling of ownership.

Firms must consider technological and user-experience features that can induce users to perceive high levels of AR characteristics such as EE and SPC. Practitioners should develop realistic content that can correctly place virtual products on users to enhance EE. Including more interactive features is encouraged to provide users with a feeling of control toward the virtual product that directly leads to ownership and positively affects decision making. Further, practitioners need to be cautious about consumers getting used to the new technology; retailers and marketers need to focus on creating new and innovative content to continually engage customers.

This study adopted EE and SPC to determine how each property of AR experience forms the consequential psychological states, particularly depending on one’s prior experience. Methodologically, the study provided external validity in conducting an experiment by adopting an existing AR mobile application available in the market and employing an objective measure of respondents (e.g. prior AR try-on experience).