Business Commons^™

Ego Depletion And Internal Controls: How Controls Can Deplete Self-Control Resources, Drew Allen, David Wood

Journal of Undergraduate Research

In order to ensure accurate financial reporting, deter fraud, and safeguard assets, companies implement internal controls throughout their organization. Internal controls can be something as simple as requiring a manager to sign off on all expenses or having two people present to handle and count cash receipts. Without these controls, companies would have to rely solely on the competency and morality of their employees or use costly and restrictive supervision and monitoring to prevent intentional and unintentional errors. While internal controls serve an important role in reducing many types of risk, controls may also have unintended consequences that can negatively …

Judging Juror Judgments: Reactions To The Discovery Of Reduced Audit Quality Acts, Hannah Whipple, Bryan Stewart

Journal of Undergraduate Research

As watchdogs of public companies’ financial reporting, auditors have the responsibility to attest whether a firm’s financial statements fairly represent its finances. As such, auditors are subject to professional standards to ensure high-quality audits. At times, however, auditors fail to meet these standards with their actions. Such actions, “which reduce evidence-gathering effectiveness inappropriately” (Malone and Roberts 1996), are referred to in the academic research literature as reduced audit quality acts (RAQAs). RAQAs increase the risk of inappropriate or misleading audit opinions, which can harm investors, lenders, and other parties, and which often lead to litigation. We seek to determine how …

Fitness Tracker Technology Motivating Healthy Living, Andrew Petersen, William Tayler

Journal of Undergraduate Research

The purpose of this project was to test whether wearing a fitness tracker, such as a Fitbit, induces wearers to increase their physical activity. We believe that when wearers know that their physical activity is being measured, they will accelerate their physical activity. To test this hypothesis, we needed a control group where we could record participants’ physical activity when the participants were unaware they were being measured. This was accomplished by using the iPhone pedometer which is automatically activated upon purchase, and relatively unknown by iPhone users. The treatment groups were given a MiFit band, which is a less …

Status Spillovers, Brian P. Reschke, Pierre Azoulay, Toby E. Stuart

Faculty Publications

When an actor experiences a sudden gain in status—for example, when a scientist wins a Nobel Prize, or a film director wins an Oscar—what does this increase do to the fates of that actor’s many ‘neighbors’? Do they bask in the reflected glory of the prize recipient, and therefore gain with her? Or, does competition for attention ensue, attenuating the recognition neighbors otherwise would have received? We investigate these questions in science. Using expert-assigned article keywords, we identify papers that are topically related to publications of future appointees to the prestigious Howard Hughes Medical Institute (HHMI). In difference-in-difference specifications we …

Strategic Silence: Withholding Certification Status As A Hypocrisy Avoidance Tactic, W. Chad Carlos, Ben William Lewis

Faculty Publications

We examine why organizations that obtain prominent certifications may at times elect not to publicize them. Drawing on the impression management literature, we argue and show that concerns about being perceived as hypocritical may cause organizations to strategically withhold their certification status. Using a longitudinal panel of corporations that were members of the Dow Jones Sustainability Index, a prominent environmental certification, we show that in the face of reputational threats, organizations are less likely to publicize their certification status when the threat appears to directly contradict the claims implied by the certification. Our findings suggest that the threat of hypocrisy …

Microcore: A Playable Case Study For Improving Adolescents’ Argumentative Writing In A Workplace Context, Derek L. Hansen, Jonathan Balzotti, Lauren Fine, Daniel Ebeling

Faculty Publications

A playable case study is an immersive, transmedia story controlled by a puppetmaster (i.e., teacher), but played by participants who advance the plot through their contributions and interactions with fictional characters. They are also explicitly educational, consisting of both the immersive, transmedia story, as well as in-game and out-of-game materials provided for educational scaffolding and reflection. We present the Microcore playable case study to illustrate the potential of this new type of experiential simulation that incorporates aspects of Alternate Reality Games (ARGs) to increase immersion. We present results from a pilot test of Microcore with an undergraduate course, identifying design …

The Core And Balance Model Of Family Leisure Functioning: A Systematic Review, Jasmine A. Townsend, Marieke Van Puymbroeck, Ramon Zabriskie

Faculty Publications

In the past 15 years, the Core and Balance Model of Family Leisure Functioning has emerged as a focus in family leisure research. This body of work has demonstrated that family leisure involvement is consistently a significant predictor of elements of family well-being frommultiple perspectives in the family, and among a variety of family types. A closer examination of thiswork reveals a more complex interrelationship between family leisure involvement and well-being and calls for further refinement and testing of the model. A systematic review of this body of work was conducted with the goals of offering a summary of findings, …

The Higher-Ed Organizational-Scholar Tension: How Scholarship Compatibility And The Alignment Of Organizational And Faculty Skills, Values And Support Affects Scholar’S Performance And Well-Being, Milagros Pereyra-Rojas, Enrique Mu, James Gaskin, Tony Lingham

Faculty Publications

Scholars and institutions alike are concerned with academic productivity. Scholars not only further knowledge in their professional fields, they also bring visibility and prestige to themselves and their institutions, which in turn attracts research grants and more qualified faculty and graduate students. Many studies have been done on scholar productivity, and many of them focus on individual factors such as gender, marital status, and individual psychological characteristics. Also, a few studies are concerned about scholars’ well-being. We propose a causal model that considers the compatibility of the scholarship dimensions valued by scholars and institutions and their academic alignment with actual …

Measuring Actual Behaviors In Hci Research – A Call To Action And An Example, Parker A. Williams, Jeffrey L. Jenkins, Joseph S. Valacich, Michael D. Byrd

Faculty Publications

There have been repeated calls for studies in behavioral science and human-computer interaction (HCI) research to measure participants’ actual behaviors. HCI research studies often use multiple constructs as perceived measures of behavior, which are captured using participants’ self-reports on surveys. Response biases, however, are a widespread threat to the validity of self-report measures. To mitigate this threat to validity, we propose that studies in HCI measure actual behaviors in appropriate contexts rather than solely perceptions. We report an example of using movements that reflect both actual behavior and behavioral changes measured within a health care IS usage context, specifically the …

Measurement Of Transformative Learning In Study Abroad: An Application Of The Learning Activities Survey, Garrett A. Stone, Mat D. Duerden, Lauren N. Duffy, Brian J. Hill, Eva M. Witesman

Faculty Publications

Study abroad research has demonstrated that education abroad provides a host of benefits; however, it is still unclear how and to what extent these benefits occur. The present study aims to elucidate the study abroad learning process, especially as it pertains to the outcome of transformative learning. First, the study introduces the Learning Activities Survey (LAS), an instrument that operationalizes and quantitatively measures transformative learning constructs. Second, the study demonstrates the utility of the LAS for tourism educators, using data collected from students enrolled in the school of management at a private northwestern university. Results confirm that transformative learning occurs …

The Internet As An Information Intermediary, Michael S. Drake, Jacob Thornock, Brady J. Twedt

Faculty Publications

The internet is an enormous and growing source of information for investors about the opinions of others. Virtually any individual with internet access can express opinions about firms and editorialize about company news. However, to date we know very little about the impact these nontraditional internet intermediaries have on markets. We develop a framework wherein internet information intermediaries fall along a spectrum of professionalism and document a nuanced relationship between coverage by these intermediaries and capital market effects. Using a novel dataset that tracks coverage of companies by individuals posting on thousands of websites, we find that coverage by professional …

The Effect Of Industry Co-Location On Analysts’ Information Acquisition Costs, Jared Jennings, Joshua A. Lee, Dawn Matsumoto

Faculty Publications

We examine how the co-location of firms in the same industry affects analysts’ cost of gathering and processing information. We find that when the firms in an analyst’s portfolio are located farther away from other firms in the same industry, the analyst’s portfolio size is smaller and average forecast accuracy is lower. We further find that the additional costs that analysts incur to follow distant firms are amplified when earnings are more difficult to forecast. Lastly, we provide some evidence that managers are more knowledgeable about other firms in the same geographic area. Specifically, managers are more likely to reference …

Auditors’ Response To Assessments Of High Control Risk: Further Insights*, Timothy Seidel

Faculty Publications

Auditing standards prescribe a risk-based approach where auditors assess the risk of material misstatement and then design and perform audit procedures to reduce audit risk to an appropriately low level. Prior research suggests that auditors are responsive to high control-risk assessment (CRA), but that this response is, perhaps, only partially effective at reducing audit risk, with relatively little insight into where and why this occurs. By refining analyses to more detailed levels of the audit, I extend this research by providing further insight into auditors’ response to high CRA. I examine and find that audit fees are significantly higher for …

Irs Attention, Zahn Bozanic, Jeffrey L. Hoopes, Jacob Thornock, Braden M. Williams

Faculty Publications

We study how public and private disclosure requirements interact to influence both tax regulator enforcement and firm disclosure. To capture IRS enforcement activities, we introduce a novel data set of IRS acquisition of firms’ public financial disclosures, which we label IRS attention. We examine the implementation of two new disclosure requirements that potentially alter IRS attention: FIN 48, which increased public tax disclosure requirements, and Schedule UTP, which increased private tax disclosure. We find that IRS attention increased following FIN 48 but subsequently decreased following Schedule UTP, consistent with public and private disclosure interacting to influence tax enforcement. We next …

Does Front-Loading Taxation Increase Savings? Evidence From Roth 401(K) Introductions, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

Can governments increase private savings by taxing savings up front instead of in retirement? Roth 401(k) contributions are not tax-deductible in the contribution year, butwithdrawals in retirement are untaxed. The more common before-tax 401(k) contribution is tax-deductible in the contribution year, but both principal and investment earnings are taxed upon withdrawal. Using administrative data from eleven companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after Roth introduction, which implies that take-home pay declines and the amount of …

A Video-Based Screening System For Automated Risk Assessment Using Nuanced Facial Features, Steven J. Pentland, Nathan W. Twyman, Judee K. Burgoon, Jay F. Nunamaker, Christopher B.R. Diller

Faculty Publications

This study investigates the development of an automated interviewing system that uses facial behavior as an indicator of the risk of given illicit behavior. Traditional facial emotion indicators of risk in semistructured dialogue may have limitations in an automated approach. However, an initial analysis of mock crime interviews suggests that the face may exhibit some form of rigidity during highly structured interviews. An interviewing system design using facial rigidity analysis was implemented and experimentally evaluated, the results of which further reveal that the rigidity is fairly generalized across the face. Whereas existing theory traditionally focuses on leakage of facial expressions, …

An Examination Of Firms’ Responses To Tax Forgiveness, Terry Shevlin, Jacob Thornock, Braden Williams

Faculty Publications

This study uses state tax amnesties to examine how firms respond to forgiveness—particularly repeated forgiveness—by a taxing authority. We posit that tax forgiveness programs alter taxpayer perceptions of the probability of detection by enforcers or the probability of future forgiveness programs, either of which could affect future tax aggressiveness. We find that firms headquartered in an amnesty-granting state increase state income tax aggressiveness following the first instance of tax amnesty, relative to control firms in other states. Moreover, we find evidence that tax aggressiveness incrementally increases with each additional repetition of a tax amnesty. Finally, we find that the effect …

Discussion Of 10-K Disclosure Repetition And Managerial Reporting Incentives What Have We Learned And Where Do We Go With Textual Research?, Travis Dyer, Mark H. Lang, Lorien Stice-Lawrence

Faculty Publications

We discuss the evolution of research on textual attributes in accounting and suggest potential directions for future research using Cazier and Pfeiffer (2017) to illustrate the challenges and opportunities in the literature. We categorize the literature based on whether a given textual attribute is assumed to be ‘‘discretionary’’ versus ‘‘nondiscretionary’’ and whether it is assumed to be ‘‘helpful’’ versus ‘‘harmful.’’ The literature to date has been largely descriptive, with limited focus on causality, and we argue that there are substantial opportunities for research that better isolate the discretionary components of textual disclosure, as well as identifying specific contexts in which …

The Evolution Of 10-K Textual Disclosure: Evidence From Latent Dirichlet Allocation, Travis Dyer, Mark Lang, Lorien Stice-Lawrence

Faculty Publications

We document marked trends in 10-K disclosure over the period 1996–2013, with increases in length, boilerplate, stickiness, and redundancy and decreases in specificity, readability, and the relative amount of hard information. We use Latent Dirichlet Allocation (LDA) to examine specific topics and find that new FASB and SEC requirements explain most of the increase in length and that 3 of the 150 topics—fair value, internal controls, and risk factor disclosures—account for virtually all of the increase. These three disclosures also play a major role in explaining the trends in the remaining textual characteristics.

Boomerang Employees: Should You Welcome Them Back?, Brad Harris, Richard G. Gardner

Faculty Publications

It’s 4:45 PM on a Friday, you’re about to head home, and then your phone buzzes. You look down to see a text from a previous employee that hasn’t been in contact since departing several months ago (sans a LinkedIn request). He says he just wants to “catch up”, but you suspect another angle. Ten minutes into a coffee meeting the next week and you get it — he wants to come back to the company. A host of questions go through your mind: Is this normal? Why did you leave in the first place? Why do you want to …

Is Retention Necessarily A Win? Outcomes Of Searching And Staying, Wendy R. Boswell, Richard G. Gardner, Jiexin Wang

Faculty Publications

This research examines the issue of employee retention by considering what happens to employees that engage in the job search process yet end up staying with an organization. Grounded in the conceptualization of reluctant staying from Hom, Mitchell, Lee, and Griffeth (2012), we consider a potential downside of employee retention. Specifically, the study examines the psychological (i.e., job dissatisfaction, low organizational commitment) and behavioral detachment (i.e., neglect behavior, diminished job performance) employees may experience when they search for alternative employment yet ultimately stay with an organization. This study also examines the moderating role of the objective underlying the search behavior …

Understanding “It Depends” In Organizational Research: A Theory-Based Taxonomy, Review, And Future Research Agenda Concerning Interactive And Quadratic Relationships, Richard G. Gardner, T. Brad Harris, Ning Li, Bradley L. Kirkman, John E. Mathieu

Faculty Publications

The study of interaction effects is critical for creating, extending, and bounding theory in organizational research. Integrating and extending prior work, we present a taxonomy of two-way interaction effects that can guide organizational scholars toward clearer, more precise ways of developing theory, advancing hypotheses, and interpreting results. Specifically, we identify three primary interaction types, including strengthening, weakening, and reversing effects. In addition, we explore subcategories within these interaction types. Our review of articles published in leading management and applied psychology journals from 2009 to 2013 supports the generalizability of this framework. We offer specific recommendations for using this taxonomy to …

What Do We Really Know About How Habituation To Warnings Occurs Over Time? A Longitudinal Fmri Study Of Habituation And Polymorphic Warnings, Anthony Vance, Brock Kirwan, Daniel Bjornn, Jeff Jenkins, Bonnie Brinton Anderson

Faculty Publications

A major inhibitor of the effectiveness of security warnings is habituation: decreased response to a repeated warning. Although habituation develops over time, previous studies have examined habituation and possible solutions to its effects only within a single experimental session, providing an incomplete view of the problem. To address this gap, we conducted a longitudinal experiment that examines how habituation develops over the course of a five-day workweek and how polymorphic warnings decrease habituation. We measured habituation using two complementary methods simultaneously: functional magnetic resonance imaging (fMRI) and eye tracking.

Our results show a dramatic drop in attention throughout the workweek …

Development And Application Of A Self-Report Measure For Assessing Sensitive Infordevelopment And Application Of A Self-Report Measure For Assessing Sensitive Information Disclosures Across Multiple Modesultiple Modes, Matthew D. Pickard, David Wilson, Catherine A. Roster

Faculty Publications

Building on the literature that approaches selfdisclosure as a decision-making process, we proposed a selfreported Sensitive Information Disclosure (SID) measure and tested the measure’s reliability and validity in two studies across a variety of interview modes and settings. We used theory to identify potential dimensions of sensitive information disclosures, created potential scale items, performed two separate card sorts, and validated the resulting pool of items in two separate experiments. Participants answered the SID scale items following an interview involving sensitive information, potential risk, and after-disclosure vulnerability. Study 1 was a laboratory experiment conducted with 165 university students. Exploratory factor analysis …

Using Wearable Devices For Non-Invasive, Inexpensive Physiological Data Collection, James Gaskin, Jeffrey Jenkins, Thomas Meservy, Jacob Steffen, Katherine Payne

Faculty Publications

Using sensors to gather physiological data about users can provide valuable insights for Information Systems (IS) research that are not availed through traditional measures. While useful in many laboratory settings, many of these physiological sensors (e.g., fMRI, EEG, EKG, etc.) are impractical and severely limited in other scenarios due to (1) prohibitive cost, (2) small sample size, (3) invasiveness, and (4) the difficulty to match psychological traits to physiological measures. In this study, we demonstrate how inexpensive consumer-grade wearable technologies overcome these first three limitations while we extend existing research on exploring the fourth limitation.

Partly Cloudy, Scattered Clients: Cloud Implementation In The Federal Government, Elston H. Steele, Indira R. Guzman, James Gaskin, Monica Adya

Faculty Publications

While cloud computing adoption is on the rise, barriers continue to play a critical role in delaying the progress of some cloud computing adoption efforts. In 2010 the United States federal government launched the ‘Cloud First’ policy which requires government agencies to consider the adoption of cloud computing when the solution is secure, reliable and cost effective (Kundra, 2010). Unfortunately, cloud computing adoption among federal agencies has been sluggish. This study investigates pressures asserted to facilitate cloud computing adoption. Although a vast amount of literature exists, very few studies empirically investigate cloud computing adoption from an institutional perspective in concert …

An Experimental Investigation Of The Individual And Joint Effects Of Financial And Non-Financial Incentives On Knowledge Sharing Using Enterprise Social Media, Degan Kettles, Robert D. St. Louis, Paul John Steinbart

Faculty Publications

Many organizations implement enterprise social media (ESM) in an effort to capture and store valuable knowledge that employees possess. Unfortunately, more often than not, employees do not make a large number of knowledge contributions. Using agency theory and contingency theory as foundations, we examine managerial interventions that can improve knowledge contribution rates in ESM. Specifically, we investigate the individual and joint effects of paying people to share knowledge, providing social cues, and having supporting and policing moderators on knowledge sharing. We further examine how two contingency factors—the nature of an employee’s compensation scheme (variable or fixed) for their primary work …

Embodied Conversational Agent-Based Deception Detection, Aaron C. Elkins, Jeffrey G. Proudfoot, Nathan Twyman, Judee K. Burgoon, Jay F. Nunamaker Jr.

Faculty Publications

An Embodied Conversational Agent-based human deception detection system was tested in a laboratory experiment during which some subjects had committed a mock crime and had guilty knowledge of that crime. Sensor signals were analyzed for their ability to discriminate between guilty/deceptive and innocent/truthful examinees and suitability for conducting automated agent-based deception interviews. Electrodermal activity confirmed the presence of arousal during the agent-based interviews.

How Does Intentional Earnings Smoothing Vary With Managerial Ability?, Peter Demerjian, Melissa F. Lewis-Western, Sarah Mcvay

Faculty Publications

We investigate if high-ability managers are more likely to intentionally smooth earnings, a form of earnings management, and when they are more likely to do so. Although prior studies provide evidence that high-ability managers report higher quality earnings, the literature does not indicate whether this behavior is common because of (or happens in spite of) high-ability managers’ intentional smoothing activities. We find that (1) high-ability managers are significantly more likely to engage in intentional smoothing, (2) their intentional smoothing is associated with improved future operating performance, and (3) their intentional smoothing is more prevalent when the smoothing either benefits shareholders, …

The Consequences Of Audit-Related Earnings Revisions, Jacob Z. Haislip, Linda A. Myers, Susan Scholz, Timothy Seidel

Faculty Publications

In this paper, we investigate the consequences that auditors and their clients face when earnings announced in an unaudited earnings release are subsequently revised, presumably as a result of year-end audit procedures, so that earnings as reported in the 10-K differ from earnings as previously announced. Specifically, we examine whether the likelihood of an auditor ‘losing the client’ is greater following such revisions, and whether the likelihood of dismissal is influenced by revisions that more negatively impact earnings, that cause the client to miss important earnings benchmarks, by greater local auditor competition, or by auditor characteristics. We also examine audit …