Controls and the Asymmetric Stickiness of Norms

• In Event: Auditing II
  In Paper Session: Auditing & Management Accounting

Abstract

This study highlights how formal controls and the behavior of peers can shape individual behavior in accounting contexts. We exogenously manipulate visible peer behavior in a laboratory experiment, allowing us to precisely investigate the interaction of controls and social norms. In a setting where appropriate behavior is somewhat ambiguous, we demonstrate that individuals conform more to peer behavior when that behavior conflicts with individuals’ own beliefs about the appropriate behavior. We further find that individuals preferentially attend and conform to the self-interested actions of peers when given mixed signals about peer behavior. Our results suggest that the interaction of formal controls and normative influence can lead individuals and groups to gravitate toward less compliant behavior over time.

Author

• William B. Tayler, Brigham Young University