IDEAS home Printed from https://ideas.repec.org/a/spr/jbecon/v87y2017i9d10.1007_s11573-017-0861-9.html
   My bibliography  Save this article

The influence of peer honesty and anonymity on managerial reporting

Author

Listed:
  • Anja Schwering

    (Ruhr-Universität Bochum)

Abstract

In certain situations, managers are able to observe their peers’ honesty in the budget setting process. This disclosed peer honesty may subsequently influence the individual managers’ honesty. Therefore, this study examines how different types of peer honesty disclosure (no, anonymous, and non-anonymous) influence managerial reporting in a budgeting setting. Non-anonymous disclosure refers to situations where both the honesty of a budget report and the reporter’s identity is disclosed. In the case of anonymous disclosure, only the budget report’s honesty can be observed. Based on different behavioral theories, I predict that honesty decreases over time when peer honesty is disclosed both anonymously and non-anonymously. Moreover, I investigate the research question whether non-anonymous disclosure affects honesty differently than anonymous disclosure does. The results of an experimental investigation show that the disclosure of peer honesty, as predicted, decreases honesty over time for both anonymous and non-anonymous disclosure. With regard to the research question, I find no difference between anonymous and non-anonymous disclosure. The results underline the necessity for management accountants to determine the ability of employees to infer the honesty of their peers. In addition, the implementation of budget-based incentive systems should be reconsidered when peer honesty is disclosed.

Suggested Citation

  • Anja Schwering, 2017. "The influence of peer honesty and anonymity on managerial reporting," Journal of Business Economics, Springer, vol. 87(9), pages 1151-1172, December.
    • Handle: RePEc:spr:jbecon:v:87:y:2017:i:9:d:10.1007_s11573-017-0861-9
    DOI: 10.1007/s11573-017-0861-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11573-017-0861-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11573-017-0861-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. R. Lynn Hannan & Frederick W. Rankin & Kristy L. Towry, 2006. "The Effect of Information Systems on Honesty in Managerial Reporting: A Behavioral Perspective," Contemporary Accounting Research, John Wiley & Sons, vol. 23(4), pages 885-918, December.
    2. Ashton, Rh & Kramer, Ss, 1980. "Students As Surrogates In Behavioral Accounting Research - Some Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 1-15.
    3. Baiman, S & Lewis, Bl, 1989. "An Experiment Testing The Behavioral Equivalence Of Strategically Equivalent Employment Contracts," Journal of Accounting Research, Wiley Blackwell, vol. 27(1), pages 1-20.
    4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    5. Remus, William, 1986. "Graduate students as surrogates for managers in experiments on business decision making," Journal of Business Research, Elsevier, vol. 14(1), pages 19-25, February.
    6. John H. Evans & Donald V. Moser & Andrew H. Newman & Bryan R. Stikeleather, 2016. "Honor Among Thieves: Open Internal Reporting and Managerial Collusion," Contemporary Accounting Research, John Wiley & Sons, vol. 33(4), pages 1375-1402, December.
    7. Sprinkle, Geoffrey B. & Williamson, Michael G. & Upton, David R., 2008. "The effort and risk-taking effects of budget-based contracts," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 436-452.
    8. Paul Fischer & Steven Huddart, 2008. "Optimal Contracting with Endogenous Social Norms," American Economic Review, American Economic Association, vol. 98(4), pages 1459-1475, September.
    9. Eddy Cardinaels & Yuping Jia, 2016. "How Audits Moderate the Effects of Incentives and Peer Behavior on Misreporting," European Accounting Review, Taylor & Francis Journals, vol. 25(1), pages 183-204, May.
    10. Warren, Danielle E. & Peytcheva, Marietta & Gaspar, Joseph P., 2015. "When Ethical Tones at the Top Conflict: Adapting Priority Rules to Reconcile Conflicting Tones," Business Ethics Quarterly, Cambridge University Press, vol. 25(4), pages 559-582, October.
    11. Bryan K. Church & R. Lynn Hannan & Xi (Jason) Kuang, 2014. "Information Acquisition and Opportunistic Behavior in Managerial Reporting," Contemporary Accounting Research, John Wiley & Sons, vol. 31(2), pages 398-419, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Stummer & Lars Lüpke & Markus Günther, 2021. "Beaming market simulation to the future by combining agent-based modeling with scenario analysis," Journal of Business Economics, Springer, vol. 91(9), pages 1469-1497, November.
    2. Anthony D. Nikias & Steven T. Schwartz & Richard A. Young, 2021. "The effect of information transparency on capital budgeting with privately informed agents: a short research note," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(2), pages 253-268, June.
    3. Kai A. Bauch & Peter Kotzian & Barbara E. Weißenberger, 2021. "Likeability in subjective performance evaluations: does it bias managers’ weighting of performance measures?," Journal of Business Economics, Springer, vol. 91(1), pages 35-59, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Markus Brunner & Andreas Ostermaier, 2019. "Peer Influence on Managerial Honesty: The Role of Transparency and Expectations," Journal of Business Ethics, Springer, vol. 154(1), pages 127-145, January.
    2. Maussen, Sophie & Cardinaels, Eddy & Hoozée, Sophie, 2024. "Costing system design and honesty in managerial reporting: An experimental examination of multi-agent budget and capacity reporting," Accounting, Organizations and Society, Elsevier, vol. 112(C).
    3. Muhammad Irdam Ferdiansah & Vincent K. Chong & Isabel Z. Wang & David R. Woodliff, 2023. "The Effect of Ethical Commitment Reminder and Reciprocity in the Workplace on Misreporting," Journal of Business Ethics, Springer, vol. 186(2), pages 325-345, August.
    4. Shana Clor-Proell & Steven Kaplan & Chad Proell, 2015. "The Impact of Budget Goal Difficulty and Promotion Availability on Employee Fraud," Journal of Business Ethics, Springer, vol. 131(4), pages 773-790, November.
    5. Ruan, Qinnan, 2022. "Management control systems and ethical decision making," Other publications TiSEM 3b6dc74f-fd2a-48ef-b1a9-c, Tilburg University, School of Economics and Management.
    6. Christian Daumoser & Bernhard Hirsch & Matthias Sohn, 2018. "Honesty in budgeting: a review of morality and control aspects in the budgetary slack literature," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(2), pages 115-159, August.
    7. Maria J. Sanchez-Exposito & David Naranjo-Gil, 2012. "Honesty and Management Control System Design: An Experimental Study," Working Papers 12.05, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration).
    8. Pamela R. Murphy & Michael Wynes & Till‐Arne Hahn & Patricia G. Devine, 2020. "Why Are People Honest? Internal and External Motivations to Report Honestly†," Contemporary Accounting Research, John Wiley & Sons, vol. 37(2), pages 945-981, June.
    9. Eddy Cardinaels & Yuping Jia, 2016. "How Audits Moderate the Effects of Incentives and Peer Behavior on Misreporting," European Accounting Review, Taylor & Francis Journals, vol. 25(1), pages 183-204, May.
    10. Schreck, Philipp, 2015. "Honesty in managerial reporting: How competition affects the benefits and costs of lying," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 27(C), pages 177-188.
    11. Janne O. Y. Chung & Sylvia H. Hsu, 2017. "The Effect of Cognitive Moral Development on Honesty in Managerial Reporting," Journal of Business Ethics, Springer, vol. 145(3), pages 563-575, October.
    12. Cardinaels, Eddy & Jia, Y., 2015. "How audits moderate the effects of incentives and peer behavior on misreporting," Other publications TiSEM 15e939fa-d6dd-4bda-824d-e, Tilburg University, School of Economics and Management.
    13. Alexandra Rausch & Alexander Brauneis, 2015. "It’s about how the task is set: the inclusion–exclusion effect and accountability in preprocessing management information," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(2), pages 313-344, June.
    14. Kevin Keasey & Philip Moon & Darren Duxbury, 2000. "Performance measurement and the use of league tables: some experimental evidence of dysfunctional consequences," Accounting and Business Research, Taylor & Francis Journals, vol. 30(4), pages 275-286.
    15. Duxbury, Darren, 2012. "Sunk costs and sunk benefits: A re-examination of re-investment decisions," The British Accounting Review, Elsevier, vol. 44(3), pages 144-156.
    16. Gary Bolton & Peter Werner, 2016. "The influence of potential on wages and effort," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 535-561, September.
    17. Maas, Victor S. & Yin, Huaxiang, 2022. "Finding partners in crime? How transparency about managers’ behavior affects employee collusion," Accounting, Organizations and Society, Elsevier, vol. 96(C).
    18. Heinicke, Franziska & König-Kersting, Christian & Schmidt, Robert, 2022. "Injunctive vs. descriptive social norms and reference group dependence," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 199-218.
    19. Felix Bolduan & Ivo Schedlinsky & Friedrich Sommer, 2021. "The influence of compensation interdependence on risk-taking: the role of mutual monitoring," Journal of Business Economics, Springer, vol. 91(8), pages 1125-1148, October.
    20. William B. Tayler & Robert J. Bloomfield, 2011. "Norms, Conformity, and Controls," Journal of Accounting Research, Wiley Blackwell, vol. 49(3), pages 753-790, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jbecon:v:87:y:2017:i:9:d:10.1007_s11573-017-0861-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.