Earnings management, human rationality, and relative deprivation : some critical assessments

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dc.contributor.advisor Saccon, Chiara it_IT
dc.contributor.author Mohapatra, Siddharth <1969> it_IT
dc.date.accessioned 2011-04-16T11:38:16Z it_IT
dc.date.accessioned 2012-07-30T16:03:57Z
dc.date.available 2011-04-16T11:38:16Z it_IT
dc.date.available 2012-07-30T16:03:57Z
dc.date.issued 2011-04-04 it_IT
dc.identifier.uri http://hdl.handle.net/10579/1051 it_IT
dc.description.abstract Although lawful, the widespread use of earnings management in financial reporting, as noted by Arthur Levitt (the former Chairman of the US SEC), gives reasons to believe that companies may be indulging in illegally manipulating earnings in stead of managing them prudently. What motivate it are not straightforward because the nature of human motivation is complex. Although, earnings management is deemed an intentional action, wherein company decision-makers use managerial discretions and judgements to achieve desired earnings numbers; yet nothing has been said beyond this. In this empirical study, based on a real case, using vignettes in a Web-survey as the method of investigation (i.e., a mix of qualitative and quantitative approaches); we have attempted to study relative deprivation – i.e., people’s reaction to objective situations depends on their subjective comparisons – as one of the causes behind decision-makers’ reasoning process to manipulate earnings. Our findings are mixed in the sense that while answering if relative deprivation causes earnings management to stray into earnings manipulations, the respondents have rendered varied levels of support to it under two different situations. Notwithstanding, we have some interesting findings as regards relative deprivation effecting manipulative earnings management practices that can potentially set the roadmap for future research on causal correlates behind managing earnings, including manipulating them. it_IT
dc.description.abstract Sebbene permesso, il diffuso ricorso all’”earnings management” nell’informazione di bilancio, come sostenuto da Arthur Levitt (former chairman US-SEC), porta a ritenere che le società possano indulgere in manipolazioni illegali dei profitti invece che gestirli con prudenza. Non è chiaro cosa causi questo comportamento perché la natura della motivazione umana è complessa. Earnings Management è considerata un’azione intenzionale in cui i decision-makers delle società usano giudizi e valutazioni manageriali per conseguire i valori di profitto desiderati, oltre questo niente è ancora stato detto. In questo studio empirico, basato su un caso reale, il metodo investigativo utilizza un approccio quali-quantitativo e si basa una web-survey che impiega “vignettes”; si è voluto indagare la ‘relative deprivation’ (la reazione delle persone a situazioni oggettive dipende dalle loro comparazioni soggettive) come una delle cause che nei processi decisionali conducono alla manipolazione dei profitti. Le nostre conclusioni sono incerte nel senso che gli intervistati nel rispondere se la ‘relative deprivation’ porta l’Earning Management verso la manipolazione dei profitti, hanno dato vari livelli di supporto ad essa in due diverse situazioni. Ciò nonostante ci sono conclusioni interessanti per quanto attiene all’influenza della ‘relative deprivation’ sulla prassi della manipolazione dei profitti che possono tracciare la strada per una future ricerca sulle correlazioni causali del management dei profitti, inclusa la loro manipolazione. it_IT
dc.format.medium Tesi cartacea it_IT
dc.language.iso en it_IT
dc.publisher Università Ca' Foscari Venezia it_IT
dc.rights © Siddharth Mohapatra, 2011 it_IT
dc.subject Earnings management it_IT
dc.subject Human rationality it_IT
dc.subject Relative deprivation it_IT
dc.title Earnings management, human rationality, and relative deprivation : some critical assessments it_IT
dc.type Doctoral Thesis it_IT
dc.degree.name Economia aziendale it_IT
dc.degree.level Dottorato di ricerca it_IT
dc.degree.grantor Scuola superiore di Economia it_IT
dc.description.academicyear 2009/2010 it_IT
dc.description.cycle 23 it_IT
dc.degree.coordinator Warglien, Massimo it_IT
dc.location.shelfmark D000981 it_IT
dc.location Venezia, Archivio Università Ca' Foscari, Tesi Dottorato it_IT
dc.rights.accessrights openAccess it_IT
dc.thesis.matricno 955403 it_IT
dc.format.pagenumber 218, [134] p. it_IT
dc.subject.miur SECS-P/07 ECONOMIA AZIENDALE it_IT
dc.description.tableofcontent List of Contents Acknowledgements Prologue 1. Accounting, Accountability, and the Practice of Earnings Management 1.1. Organisational Accountability in the Context of Contemporary Accounting Practices 1.2. Accounting Manipulations – A Curtain Raiser 1.2.1. Earnings and Earnings Management, and Their Importance in The Context of Accounting Manipulation 1.3. Literature Review on Earnings Management 1.3.1. Motives/Intents behind Earnings Management Incentives and Earnings Management Information Asymmetry and Earnings Management Social and Political Costs and Earnings Management Impression/Reputation/Relationship Management and Earnings Management Motives Concerning Internal Aspects of a Firm and Earnings Management 1.3.2. Fraud and Earnings Management 1.3.3. Techniques Used to Detect Earnings Management Detecting Earnings Management Using Aggregate or Total Accruals Detecting Earnings Management through Specific Accruals Detecting Earnings Management through Cost Allocation and/or Cost Shifting Detecting Earnings Management through Disclosures Detecting Earnings Management through Studying Real Activities 1.3.4. Actions/Initiatives to Restrain Earnings Management Earnings Management in Itself is Self-defeating More Developed Accounting Standards with optimal accounting choices and More Efficient Regulatory Authorities in Restraining Earnings Management More Versatile Auditing in Restraining Earnings Management Better Corporate Governance to Restrain Earnings Management External Factors to be Considered in Restraining Earnings Management More-Ethical-Considerations in Restraining Earnings Management 1.3.5. Various Research Attempts to Improve Studies on Earnings Management 1.3.6. Summary of the Literature Review on Earnings Management 1.4. The Stakeholders’ Profile in The Earnings Management Phenomenon 1.5. A Summary of Our Discussion until Now 1.6. Raising the Curtains for the Next Chapter 2. Rationality – A Critique from an Economic-Psycho-Sociological Perspective 2.1. Rationality and Economics 2.1.1. Calculability and Rationality Utility Maximisation and Rationality Preference Ranking and Rationality 2.1.2. Rational Choice Theory and Rationality Revealed Preference Theory and Rationality 2.1.3. Self Interest and Rationality Individualism and Rationality 2.1.4. Ethics and Morality, and Rationality Sense of Responsibility and Rationality 2.1.5. Freedom and Rationality Boundedly Rational and Rationality 2.1.6. Empiricism versus Formalism, and Rationality 2.2. Psychology and Rationality 2.2.1. Psychoanalysis and Rationality 2.2.2. Biases and Rationality Self-serving Bias Attribution Bias 2.2.3. Heuristics and Rationality 2.3. Sociology and Rationality 2.3.1. Max Weber, Bureaucracy and (Formal) Rationality Bureaucracy and Freedom Bureaucracy and the Informality-of-Formality Bureaucracy and, Concentration of Power and Conflict Bureaucracy and, Rational-Irrationality and Irrational-Rationality 2.3.2. Institutionalisation and Rationality 2.3.3. Taylorism and Scientific Management, and Rationality 2.3.4. Social Embeddedness of Economic Activities and Rationality Social Exchange Theory and Rationality 2.3.5. Freewill and Sovereign Action, and Rationality 2.3.6. Individualism and Rationality Methodological Individualism and Rationality 2.3.7. Contingency and Context Dependency of Behaviour, and Rationality 2.3.8. Knowledge Limitations and Rationality 2.3.9. Deontology and Rationality 2.4. A Summary of Our Discussion until Now 2.5. Raising the Curtains for the Next Chapter 3. Turning Expectations from Relative Deprivation into Motivations to Manipulate Earnings (in stead of Managing Them)! An Empirical Study Based on a Real Case 3.1. Introduction 3.2. Intentional Action 3.2.1. American Dream and Intentional Action 3.3. Relative Deprivation 3.3.1. Relative Deprivation and White-Collar Crime 3.4. What is at Stake for the Accounting Community? 3.5. Study Methodology 3.5.1. Why Crosby’s Relative Deprivation Theory? 3.5.2. Why Cross-Sectional Design? 3.5.3. Why Practitioner-centric Survey? 3.5.4. Why Web-survey? 3.5.5. Why Vignettes? 3.6. Study Design 3.6.1. Research Tools Used Design Issues Concerning the Vignettes Design Issues Concerning the Web-Questionnaire 3.6.2. Study Schema 3.6.3. Linking the Study Schema with the Enron Scandal 3.7. Study Findings and Discussion: 3.7.1. Findings from Vignette#1 Concerning the Reason Types behind the Intention to Manipulate Earnings 3.7.2. Findings from Vignette#2 Concerning the Importance of Enabling Factors for Managing and Manipulating Earnings 3.7.3. Findings from Vignette#3 Concerning the Influence of RD in Manipulating Earnings 3.7.4. Findings Regarding Some General Questions Pertaining to White-collar Criminals having RD and their Modus Operandi with Respect to MEM Does RD Oriented Directional Goals Lead to MEM? Biased (Human) Decision-Making and MEM The Background of Intentionality and Enabling Factors, and MEM The Practice of MEM to Overcome RD Can Become an Obsession! 3.7.5. Let Us Look Critically at the Main Findings of the General Questions Section Concerning the Role of RD on MEM vis-à-vis the Findings from the Vignettes! 3.7.6. The Inference Tree: The Inference Set in the Context of RD Leading to MEM 3.8. Study Shortcomings and Limitations 3.9. Conclusion (Including Implications and Future Research Directions) Endnotes 1 Bibliography 1 Endnotes 2 Bibliography 2 Endnotes 3 Bibliography 3 Appendix 1: Web-Survey Questionnaire Estratto per riassunto della tesi di dottorato it_IT

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