The effect of honesty and superior authority on budget proposals

• 成果类型: Article
• 署名作者: Rankin, Frederick W.; Schwartz, Steven T.; Young, Richard A.
• 署名单位: Colorado State University System; Colorado State University Fort Collins; State University of New York (SUNY) System; Binghamton University, SUNY; University System of Ohio; Ohio State University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2008.83.4.1083
• 发表日期: 2008
• 页码: 1083-1099
• 关键词: Information asymmetry; PAY SCHEME; SLACK; systems; COOPERATION; performance

摘要

Research in budgeting suggests that subordinates may exhibit economically significant degrees of honesty, in spite of pecuniary incentives to do otherwise. This study continues the exploration of honesty in budgeting along two dimensions. First, unlike prior experiments, we measure the incremental effect of honesty by manipulating whether budget requests are made in the form of a factual assertion. Second, prior designs may have emphasized the ethical dimension of budgeting by granting the subordinate wide discretion over setting the budget, whereas we manipulate whether the subordinate or the superior has final authority over setting the budget. We find that less slack is created when budget communication requires a factual assertion in the subordinate authority treatment, but not when the superior has final authority. Hence, we find an incremental effect of honesty only when the subordinate has final authority. We conjecture, and provide some evidence, that this is due to subordinates framing the superior authority situation as one of negotiation where each party acts in his or her self-interest, rather than as an ethical dilemma. This view, that budgeting is essentially devoid of ethical considerations, is consistent with some recent characterizations of budget practices.