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Full-Text Articles in Business
A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter
A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter
Gordon Potter
Much management accounting research focuses on design of incentive compensation contracts. A basic assumption in these contracts is that performance-based incentives improve employee performance. This paper reports on a field test of the multi-period incentive effects of a performance-based compensation plan on the sales of a retail establishment. Analysis of panel data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented, an effect that persists and increases over time. Sales gains are significantly lower in the peak selling season when more temporary workers are employed.
Increasing Auditor Sensitivity To The Risk Of Fraudulent Financial Reporting: Assessing Incentives And Pressures On Top Management, Donald Wengler
Increasing Auditor Sensitivity To The Risk Of Fraudulent Financial Reporting: Assessing Incentives And Pressures On Top Management, Donald Wengler
USF Tampa Graduate Theses and Dissertations
The ability of auditors to detect fraud, including intentional material misstatements in earnings, remains key to the credibility of audit firms and confidence in capital markets. The PCAOB concludes from its most recent inspections of public company audits that auditors often fail to assess and respond to risks of material misreporting by management. In a behavioral experiment, this study concludes that auditors can increase sensitivity to management motivation to misreport by actively seeking to transform identified risk factors focused on the organization, into factors focused on top managers, and to evaluate whether these manager-focused risk factors represent incentives for personal …
Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson
Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson
Deborah Archambeault
This study investigates whether incentive-based compensation for audit committee members is associated with accounting restatements. We use an agency framework to predict that short-term (long-term) incentive compensation for audit committee members will increase (decrease) the likelihood of accounting restatements due to error or fraud. Using a matched-sample logistic regression with 153 restatement and 153 nonrestatement companies, we find the predicted positive relation between short-term incentive compensation (short-term stock option grants) for audit committee members and likelihood of restatement. However, the long-term incentive compensation results contradict prediction and indicate a significant positive relation between audit committee member long-term incentive compensation {long-term …