The Effects of Social Pressure and Organizational Risk Appetite on Financial Reporting Decisions

• In Event: Accounting Behavior Organizations/Government & Nonprofit
  In Paper Session: Pot Pourri - Accounting Behavior Organizations, Government & Nonprofit & International Accounting

Abstract

This study investigates the impact of social pressure, an organization’s risk appetite and Honestly-Humility on management accountants’ reporting decisions related to a missing fixed asset. The results of an experiment with 72 management accountants reveal that risk appetite appears to set the stage for how social pressures will impact misreporting intentions. Social pressure (obedience vs. conformity pressure) and an organization’s risk appetite(aggressive vs. conservative) interact to effect reporting intentions. More specifically, misreporting intentions significantly increase when either obedience or conformity pressure is introduced in the aggressive risk appetite condition. However, in the conservative risk appetite condition, misreporting intentions only increase significantly upon the introduction of obedience pressure. In addition, we find that Honesty Humility is a behavioral trait that significantly impacts misreporting intentions, such that management accountants with higher HonestyHumility scores are less likely to engage in misreporting despite the presence of pressure to engage in misreporting.

Authors

• Andrea L Gouldman, Weber State University

• Alisa Gabrielle Brink, Virginia Commonwealth University

• Lisa M Victoravich, University of Denver