Business Commons^™

Audit Committee Accounting Expertise And The Mitigation Of Strategic Auditor Behavior, James C. Hansen, Ling Lei Lisic, Timothy Seidel, Michael S. Wilkins

Faculty Publications

Our study is motivated by the theory of credence goods in the auditing setting. We propose that audit committee accounting expertise should reduce information asymmetries between the auditor and the client, thereby limiting auditors’ ability to over-audit and under-audit. Consistent with this notion, our results indicate that when audit committees have accounting expertise, clients (1) pay lower fees when changes in standards decrease required audit effort; (2) pay a smaller fee premium in the presence of remediated material weaknesses; and (3) have a reduced likelihood of restatement when audit market competition is high. Our findings in the under-auditing setting generally …

Affective Commitment, Trust, And The Psychological Contract: Contributions Matter, Too!, Lisa Schurer Lambert, John B. Bingham, Anna Zabinski

Faculty Publications

Employees’ receipt of inducements is associated with trust and affective commitment, and employees pay for their inducements with their contributions (e.g., time, and physical and intellectual effort). Yet this relationship does not fully mirror events as they occur in an employment relationship where employees’ promises and delivery of inducements and contributions are ongoing, and relatively continuous. Our premise is that promising and delivering contributions may enhance or reduce employees’ trust in and commitment to the organization depending on how well they fulfill psychological needs. We tested a social exchange theory model and our alternative model. Survey results favoured our alternative …

The Settlement Norm In Audit Legal Disputes: Insights From Prominent Attorneys*, Eldar Maksymov, Jeffrey Pickerd, D. Jordan Lowe, Mark E. Peecher, Andrew Reffett

Faculty Publications

Prior research indicates that most audit legal disputes settle. There is, however, little evidence of the factors that drive the settlement norm and its exceptions in audit legal disputes. To better understand these factors, we rely on theory related to how professionals manage risks and, as a result, how professions defend jurisdictional claims. We use this theoretical lens to help motivate four research questions that we probe by interviewing 27 prominent attorneys experienced in audit litigation. Consistent with our lens, our interview data indicate that attorneys manage their risks, including the risk of reputational loss, by settling based on their …

Research In Defense Logistics: Where Are We And Where Are We Going?, George A. Zsidisin, Amanda Bresler, Benjamin T. Hazen, Keith F. Schneider, Taylor H. Wilkerson

Faculty Publications

The purpose of this paper is to provide insight on high-interest areas of research in defense-related logistics and supply chain management and opportunities for advancing theory and practice in this domain.

A Scenario-Based Parametric Analysis Of The Army Personnel-To-Assignment Matching Problem, Matthew D. Ferguson, Raymond R. Hill, Brian J. Lunday

Faculty Publications

This study aims to compare linear programming and stable marriage approaches to the personnel assignment problem under conditions of uncertainty. Robust solutions should exhibit reduced variability of solutions in the presence of one or more additional constraints or problem perturbations added to some baseline problems.
Several variations of each approach are compared with respect to solution speed, solution quality as measured by officer-to-assignment preferences and solution robustness as measured by the number of assignment changes required after inducing a set of representative perturbations or constraints to an assignment instance. These side constraints represent the realistic assignment categorical priorities and limitations …

Why Is Bribery Pervasive Among Firms In Sub-Saharan African Countries? Multi-Industry Empirical Evidence Of Organizational Isomorphism, Nnaoke Ufere, James Gaskin, Sheri Perelli, Antoinette Somers, Richard Boland Jr.

Faculty Publications

Motivated by the prevalence and persistence of corruption in Sub-Saharan Africa (SSA) despite high-profile anticorruption efforts, and by calls for more research on unethical organizational behavior by firms in Africa, we investigated the link between bribery in 12 SSA countries and the phenomenon of organizational isomorphism, long used to explain legitimate, but rarely, illegitimate firm practices. Analysis of 5989 SSA firms in three distinct industries known for high levels of bribery reveals direct positive relationships between bribery and its perception as frequently practiced in specific industries (“mimetic isomorphic effect”); institutional constraints on businesses (“coercive isomorphic effect”); and local market rivalry …

Overselling Winners And Losers: How Mutual Fund Managers' Trading Behavior Affects Asset Prices, Li An, Bronson Argyle

Faculty Publications

We link a seemingly biased trading behavior to equilibrium asset prices. U.S. equity mutual fund managers tend to sell both their big winners and big losers. This selling pressure pushes down current prices and leads to higher future returns; aggregating across funds, we find that securities for which investors have large unrealized gains and losses outperform in the subsequent month. Funds with larger turnover, shorter holding period, and higher expense ratios, are significantly more likely to manifest this trading pattern, and unrealized profits from such funds have stronger return predictability. This cross-sectional return predictability is difficult to reconcile with alternative …

Separate But Not Equal: Toward A Nomological Net For Migrants And Migrant Entrepreneurship, Lisa Jones Christensen, Arielle Badger Newman, Heidi Herrick, Paul Godfrey

Faculty Publications

This paper considers migrants on a continuum in terms of voluntariness of departure and intended timeframe in the new location. The corresponding 2 x 2 framework offers a theory-driven typology with which to consider four groups: exiles, sojourners, immigrants, and refugees. We apply the framework to the topic of migrant entrepreneurship, demonstrating the need for separate consideration of refugee and immigrant entrepreneurs. We propose ways in which types of capital differ between the two and discuss how differences affect entrepreneurial endeavors. The framework extends scholarship on migrant entrepreneurship, while providing a nomological net for improved theorizing for a range of …

Real Effects Of Search Frictions In Consumer Credit Markets, Bronson Argyle, Taylor Nadauld, Christopher Palmer

Faculty Publications

We establish two underappreciated facts about costly search. First, unless demand is perfectly inelastic, search frictions can result in significant deadweight loss by decreasing consumption. Second, whenever cross-price elasticities are non-zero, costly search in one market also affects quantities in other markets. As predicted by our model of search for credit under elastic demand, we show that search frictions in credit markets contribute to price dispersion, affect loan sizes, and decrease final-goods consumption. Using microdata from millions of auto-loan applications and originations not intermediated by car dealers, we isolate plausibly exogenous variation in interest rates due to institution-specific pricing rules …

Augmenting Environmental Sustainability Through The Exchange Of Green Creative Ideas –Evidence From An Emerging Economy, Samuel Ogbeibu, Abdelhak Senadjki, Jude Emelifeonwu, James Gaskin, Vijay Pereira

Faculty Publications

Leader trustworthiness and perceived green reputation are becoming increasingly important for driving the exchange of green creative ideas within a team. The effective exchange of green creative ideas is relevant for building organisational strategies that align with the United Nations global compact envi- ronmental sustainability principles and helps advance the achievement of the sustainable development goals (SDG). However, evidence from emerging countries is limited. This paper contributes by investi- gating the case of the Nigerian manufacturing sector, wherein organisations have achieved little success in cultivating the effective exchange of green creative ideas. Through the lens of the social exchange and …

Using Accelerometer And Gyroscope Data In Common Mobile Devices To Assess Credibility, Joseph S. Valacich, Jeffrey L. Jenkins, Michael D. Byrd, David Kim, Manasvi Kumar, Parker A. Williams

Faculty Publications

An observational study examined the efficacy of using accelerometer and gyroscope (i.e., orientation) data from standard mobile devices to assess response credibility. Study participants played twenty rounds of a card game where they self-reported whether they won or lost each round. Participants received a base payment but could gain increased “bonus” payments by cheating. After the card game, participants were asked a “Yes-No” question whether they cheated while their orientation data was captured. We predicted that people concealing information about an adverse behavior (i.e., cheating), would result in differences in both absolute magnitude changes in acceleration and in rotation, as …

Which Early Withdrawal Penalty Attracts The Most Deposits To A Commitment Savings Account?, John Beshears, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian, Jung Sakong

Faculty Publications

Previous research has shown that some people voluntarily use commitment contracts that restrict their own choice sets. We study how people divide money between two accounts: a liquid account that permits unrestricted withdrawals and a commitment account that is randomly assigned in a between-subject design to have either a 10% earlywithdrawal penalty, or a 20% early withdrawal penalty, or not to allowearlywithdrawals at all (i.e., an infinite penalty).When the liquid account and the commitment account pay the same interest rate, higher early-withdrawal penalties attract more commitment account deposits. This pattern is predicted by the hypothesis that some participants are partially- …

Financial Costs Of Judicial Inexperience: Evidence From Corporate Bankruptcies, Benjamin Iverson, Joshua Madsen, Wei Wang, Qiping Xu

Faculty Publications

Exploiting the random assignment of judges to corporate bankruptcy filings, we estimate financial costs of judicial inexperience. Despite new judges’ prior legal experience, formal education, and rigorous hiring process, their public Chapter 11 cases spend 19% more time in bankruptcy, realize 31% higher legal and professional fees, and 21% lower creditor recovery rates. Examining possible mechanisms, we find that new judges take longer to rule on motions and cases assigned to these judges file more plans of reorganization. Conservative estimates suggest that minor policy adjustments could increase creditor recoveries by approximately $16.8 billion for the public firms in our sample.

A Pedagogical Model For Teaching Data Analytics In An Introductory Information Systems Python Course, Heber C. Brau, James C. Brau, Mark Keith

Faculty Publications

In this paper we answer the call of Sheppard (2012) and Brunner & Kim (2016) and present a model for teaching data analytics in an introductory information systems class using the Python programming language. The pedagogy follows an active-learning strategy in which students are assumed to have no statistical or Python programming training prior to class. The learning outcomes include: 1) Data: write code to import and manipulate data; 2) Visualization: write code to generate useful and theoretically sound data visualizations; 3) Feature Engineering: write code to generate, condense, or recombine variables (i.e., "features") of any type (numeric, categorical, ordinal, …

Budget Habits Of College Students: An Empirical Analysis Of Expectations And Realizations, James C. Brau, Marshall Ringwood, Jessica West

Faculty Publications

Using a sample of more than 500 college students from a large, private university, this study seeks to analyze spending expectations of students, their realized habits, and the dispersion between the two. We first ask the students to project what they think their monthly budget will be throughout the semester. We then ask them to track their expenses for three months. The students do the same for income they receive. The students then report their actual spending habits and answer various questions related to their demography, family, and life experience. We use simple univariate correlation methods to explain factors that …

Wearables As Augmentation Means: Conceptual Definition, Pathways, And Research Framework, Abdul Sesay, Jacob Heaton Steffen

Faculty Publications

Wearables pervade many facets of human endeavor, thanks to their integration into everyday artifacts and activities. From fitness bands to medical patches, to augmented reality glasses, wearables have demonstrated immense potential for intelligence augmentation (IA) through human-machine symbiosis. To advance an understanding of how wearables engender IA and to provide a solid foundation for grounding IS research on wearables and IA, this study draws from Engelbart’s framework for augmenting human intellect to: (1) develop a conceptual definition of wearable technology as a digitally enhanced body-borne device that can augment a human or non-human capability by affording context sensitivity, mobility, hands-free …

Technological Turbulence And Greening Of Team Creativity, Product Innovation, And Human Resource Management: Implications For Sustainability, Samuel Ogbeibu, Jude Emelifeonwu, Abdelhak Senadjki, James Gaskin, Jari Kaivo-Oja

Faculty Publications

Given the overwhelming increase in technological advancements and global warming concerns, our study attempts to investigate the predictive powers of green human resource management (GHRM) bundles and green team creativity on green product innovation. Additionally, we examine the roles of technological turbulence and environmental dynamic capability.We have administered a cross-sectional (time lag) survey design with 229 respondents from 31 manufacturing organisations in Malaysia and employed the partial least square path modelling (SmartPLS3) for data analysis. Results indicate that technological turbulence, green recruitment and selection and green training, involvement and development are positive predictors of green team creativity. Green performance and …

Research Relevance And Research Productivity, Jared Moon, David A. Wood

Faculty Publications

Research in accounting education has evolved to include, among other areas, research relevance, faculty research productivity, and the use of journal lists. These topics offer new areas for research including investigating the benefits and risks of relevant/irrelevant research, how effectively faculty research is evaluated, the potential consequences of using journal lists, and much more. Although these areas have significant and wide‐ranging effects on faculty, much more empirical data is needed to inform decision making. This paper highlights these issues and makes suggestions for additional research to help the academy make better decisions by using data‐driven research findings.

Design Principles For Signal Detection In Modern Job Application Systems: Identifying Fabricated Qualifications, Nathan W. Twyman, Steven J. Pentland, Lee Spitzley

Faculty Publications

Hiring a new employee is traditionally thought to be an uncertain investment. This uncertainty is lessened by the presence of signals that indicate job fitness. Ideally, job applicants objectively signal their qualifications, and those signals are correctly assessed by the hiring team. In reality, signal manipulation is pervasive in the hiring process, mitigating the reliability of signals used to make hiring decisions. To combat these inefficiencies, we propose and evaluate SIGHT, a theoretical class of systems affording more robust signal evaluation during the job application process. A prototypical implementation of the SIGHT framework was evaluated using a mock-interview paradigm. Results …

Open Communities And Formal Organizations: A Symbiosis View, Tanner Skousen, Hani Safadi, Richard Watson

Faculty Publications

How can formal organizations and open communities engage in mutually beneficial relationships? We develop a framework that explains how an open community’s engagement with a formal organization can be mutually beneficial to both in the long-term. We theorize how a symbiotic relationship between open communities and formal organizations can be forged by nurturing various forms of capital flow between them as well as creating virtuous feedback loops within and across each other’s capital creation systems. The framework has implications for understanding innovation in ecosystems and networked economies.

Exploring Antecedents And Consequences Of Managerial Moral Stress, Justin B. Ames, James Gaskin, Bradley D. Goronson

Faculty Publications

The legitimacy of moral stress as a distinct form of general stress has long been debated in previous research. Moreover, individual-level antecedents of moral stress are yet to be tested among executives. This study investigates role identity saliency (by calculating the total saliency of roles and competition between roles) as an individual- level antecedent of managerial moral stress and turnover intent as a consequence of managerial moral stress among high-level strategic decision makers in organisations. We also analyse the moderating effect of moral attentiveness in these relationships. Survey data were collected from 264 strategic decision makers from small to large …

Assessing The Effects Of Service Variability On Consumer Confidence And Behavior, Clay M. Voorhees, Jonathan M. Beck, Praneet Randhawa, Kristen Bell Detienne, Sterling A. Bone

Faculty Publications

This research examines the effects of service variability on consumer confidence and behavior across multiple transactions in a service relationship. This article integrates discussions of service relationships and models of service variability. Leveraging a field study, the authors track over 12,000 experiences across 3,084 consumers for a 2-year period and model the impact of variability in these experiences on consumer relationships. The results reveal variability in a service relationship can significantly impact consumer confidence and that the nature of this relationship is nonlinear, revealing that small variations in quality will have strong effects on confidence and that these effects plateau …

Perspectives On Management Review Controls: Challenges And Solutions—Insights From A Qualitative Study Of The Issues, John Fogarty, Mark Beasley, Douglas F. Prawitt

Faculty Publications

This study focuses on subjective, judgment-based management review controls (MRCs) used by management teams of public companies (hereinafter referenced as “preparers” or “organizations”) as part of their efforts to address the risk of material misstatements in financial reporting and to effectively and efficiently provide management with reasonable assurance that internal control over financial reporting (ICFR) is effective. This report provides information and insight useful to preparers, auditors, and regulators on issues surrounding the design, implementation, execution, and documentation of MRCs, including issues in the context of ICFR assessments and attestations under Section 404 of the Sarbanes-Oxley Act of 2002 (SOX). …

Sale-Leaseback Transactions: Price Premiums And Market Efficiency, C. F. Sirmans, Barrett A. Slade

Faculty Publications

Sale-leaseback transactions are ubiquitous in real estate markets in the United States with annual volume estimated to be greater than $7 billion. However, there is no evidence concerning the price impact of such transactional arrangements. Using a data set of sale-leaseback transactions, this study examines the price impact on commercial property transactions across seven markets. The findings reveal that transactions structured as saleleasebacks occur at significantly higher prices than market transactions. In addition, after accounting for income differentials, buyers and sellers are appropriately pricing the transactions resulting in no undue advantage to either party, that is, the expected price premium …

Sizing Up Corporate Restructuring In The Covid Crisis, Robin Greenwood, Benjamin Iverson, David Thesmar

Faculty Publications

In the wake of the COVID-19 pandemic, the financial and legal system will need to deal with a surge of financial distress in the business sector. Some firms will be able to survive, while others will face bankruptcy and thus need to be liquidated or reorganized. Many surviving firms will need to be downsized or acquired. In normal times, this triage is supported by the court system, banks, and financial markets. The goal of this paper is to size up the coming surge of financial distress, list the challenges it presents in the current environment, and analyze potential policy solutions. …

Provocation And Related Subjective Experiences Along The Dark Tourism Spectrum, Andrew Lacanienta, Gary Ellis, Brian Hill, Patti Freeman, Jingxian Jiang

Faculty Publications

We examined relations between ‘darkness’ of dark tourism sites, provocation, and select indicators of the quality of visitors’ immediate subjective experiences. Experience observations (N = 101) were collected from tourists who visited Auschwitz (Krakow), Schindler’s Factory (Krakow), Execution Square (Paris), and a ghost tour (Edinburgh). Research participants completed measures of provocation and quality of experience at the end of their visits to each site. Hypotheses were founded in four theories: self-determination theory, cognitive dissonance theory, arousal theory, and the theory of structured experience. These hypotheses proposed that particular experience outcomes vary according to the ‘darkness’ of the dark tourism site. …

Rethinking Leisure Time Use Metrics: Greater Diversity In Shared Sibling Leisure Is Associated With Higher Relationship Quality During Emerging Adulthood, Eric K. Layland, Camilla Hodge, Mikala Glaza, Jerrica O. Peets

Faculty Publications

Leisure diversity—the total number of unique leisure categories shared within a sibling dyad—may vary according to sibling characteristics (e.g., sibling gender, age difference) and predict sibling relationship quality. Using triangulated lists, brief narratives, and focus groups, we constructed a taxonomy of shared sibling leisure in emerging adulthood and then calculated individual leisure diversity scores. The sample (N ¼ 185) included college-attending emerging adults with an average age of 20.1 years (35.7% female). Taxonomic analysis suggested 19 categories of shared sibling leisure. Analyses of variance indicated differences by dyadic gender composition in endorsement rates of select leisure categories and average levels …

Dealing With Dysfunction: Negotiating With Difficult Individuals, Marc-Charles Ingerson, Kristen Bell Detienne, Jill M. Hooley, Nathan A. Black

Faculty Publications

Workplace negotiations often present daunting challenges. The negotiation process can test relationships and place reputations at risk. Moreover, in some situations, the difficulty and stress involved in routine negotiations become magnified. Approximately ten percent of working adults have personality styles or behavioral tendencies that can make interactions with them especially challenging. Identifying, understanding, and dealing with personality dysfunction in the negotiation process is therefore a critically important skill (Kessler et al. 2005; Eddy 2018). Today’s negotiators need to be able to recognize and interact with people who have difficult and dysfunctional personality traits.

Unfortunately, many of those on the receiving …

In Situ Engagement During Structured Leisure Experiences: Conceptualization, Measurement, And Theory Testing, Gary D. Ellis, Jingxian Jiang, Patti A. Freeman, Andrew Lacanienta, Elizabeth J. Ellis

Faculty Publications

We conducted an experiment to test theoretical propositions relating coherence, personalization, and provocation to in-situ engagement, deep experience, delight, and perceived value of time spent. Four hundred adults from a national panel viewed one of eight versions of a video centered on a character in Victor Hugo’s classic novel Les Miserables, and then completed measures of engagement, deep experience, delight, perceived value of time spent, preexisting familiarity with the story, and the subjective experience of provocation. Each video represented a unique combination of presence or absence of the three hypothesized determinants: coherence, personalization, and provocation. Coherence, personalization, and preexisting familiarity …

Factors That Facilitate Or Impair Kinesic And Vocalic Nonverbal Behaviors During Interpersonal Deception, Judee K. Burgoon, Lauren M. Hamel, J. Pete Blair, Nathan W. Twyman

Faculty Publications

Nonverbal demeanor has long been thought to be a high-fidelity display window into a person’s inner self. At the same time, nonverbal behaviors are thought by laypeople to be reliable indicators of dissembling. In the realm of deception, both of those beliefs are true—and false. Humans can choose to reveal their personal identity, affiliations, attitudes, and behavioral inclinations through their nonverbal presentation of self. But, as the adaptive creatures that they are, humans also use their nonverbal actions to fabricate, conceal, and evade. In this respect, deception can disguise the true self and yet can also betray the truth. In …