Management's Responsibility Acceptance, Locus of Breach, and Investors' Reactions to Internal Control Reports

• 成果类型: Article
• 署名作者: Tan, Hun-Tong; Yu, Yao
• 署名单位: Nanyang Technological University; University of Massachusetts System; University of Massachusetts Amherst
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-52077
• 发表日期: 2018
• 页码: 331-355
• 关键词: market reactions; control weakness; performance; disclosure; Excuses; Blame

摘要

The triangle model of responsibility (Schlenker, Britt, Pennington, Murphy, and Doherty 1994) predicts that the extent that investors hold management responsible for an adverse event is jointly determined by the links among three elements-management, the adverse event, and the relevant accounting regulations/standards or public norms. Applying this theory, we conduct experiments to examine how the locus of breach (external versus internal) moderates the efficacy of management's responsibility acceptance (higher versus lower). Our results show that management's higher (versus lower) responsibility acceptance is a more effective strategy in the presence of an external breach, but not in the presence of an internal breach (Experiment 1). Follow-up experiments suggest that this result is driven by the relative strength of the triangle links underlying the external versus internal breaches, rather than the locus per se.