VTechWorks Repository :: Browsing by Author "Killough, Larry N."

Browsing by Author "Killough, Larry N."

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Accounting and reporting practices of churches: an empirical study
Smith, Sarah H. (Virginia Polytechnic Institute and State University, 1982)
In the last decade the accounting profession has shown increased interest in accounting for nonprofit organizations including accounting for churches. Statement of Position 78-10 and Statement of Financial Accounting Concepts No. 4 provide standards and objectives for church financial reporting. Although accounting standards have been determined for churches, there is little information about the current accounting and reporting practices followed by churches. This research determines the actual accounting principles and reporting practices used by the group of churches whose business administrators belong to the National Association of Church Business Administrators (NACBA). The NACBA is national in scope and represents larger churches from many denominations. Secondly, the research determines the potential impact of the Statement of Position (SOP) on church accounting and reporting practices. Data measuring the churches' compliance with principles recommended in the SOP and NACBA members' attitudes toward the principles are gathered using a mail questionnaire. The compliance questions are answered by checking yes, no, or not applicable. The attitude responses are indicated on a Likert scale measuring degree of favor from 0 to 4. The questionnaire also includes demographic information about the churches and items of general interest about the type of financial reports they present. After appropriate pretesting, the questionnaire was sent to the NACBA members currently employed by a local congregation. The mailing and follow-up procedures resulted in a 64% response rate. The questionnaire was sent to a population rather than a sample, therefore, inferential statistics are not used to analyze the responses. Compliance percentages and average attitude response scores are presented for all responding NACBA members and their churches. Additional analysis provides profiles of compliance rates and attitude response scores for three groupings - denomination, size, and audit classification. In general, the analysis shows that the group of large churches and the group of churches whose financial statements are externally audited are most likely to be in compliance with recommended principles. These same groups express the most favorable attitudes toward the recommended principles.
Accounting data and stock returns across business-cycle associated valuation change periods
Kane, Gregory D. (Virginia Tech, 1992-11-06)
This study examines intertemporal variation in the associations of accounting data with subsequent firm returns. A number of accounting research studies pool data indiscriminately across time and firms. Previous research has disclosed the nature and effects of cross-sectional dependencies in pooled data. On the other hand, intertemporal dependencies associated with real macroeconomic phenomena have not been widely researched. The objective of this study was to provide evidence as to whether accounting data's associations with subsequent firm returns systematically vary across recession-associated and expansion-associated valuation change periods. Eighty-two accounting ratios were examined for evidence of systematic variation in association across business cycle-associated valuation events. Analyses are conducted, using both simple and multiple regression. Business cycle effects on the predictive accuracy of regression models were also examined.
An Activity- Based Costing and Theory of Constraints Model for Product- Mix Decisions
Gurses, Ayse Pinar (Virginia Tech, 1999-06-29)
The objective of this thesis is to demonstrate the use of the Activity-Based Costing (ABC) approach together with the Theory of Constraints (TOC) philosophy in determining the optimal product-mix and restrictive bottlenecks of a company. The contribution of this thesis is a new product-mix decision model that uses activity-based cost information. This new model is proposed to be used with the TOC philosophy in order to improve the financial performance of a company. Four case studies, all of which are based on hypothetical data, are prepared in this research to show the applicability of the proposed model in different manufacturing environments. Specifically, the first case study shows that the conventional product-mix decision model and the model developed in this thesis can give significantly different results regarding the best product-mix and associated bottlenecks of a company. The second case study demonstrates the use of the proposed product-mix decision model in a complex manufacturing environment. Specifically, this case study shows how companies should consider alternatives such as activity flexibility and outsourcing to improve their profitability figures. The third case study is an extension of the second case study, and it is prepared to illustrate that the proposed model can be extended to include more than one time period. The final case study demonstrates the applicability of the proposed model in a lean manufacturing environment. Using the proposed model developed in this research will give managers more accurate information regarding the optimum product-mix and critical bottlenecks of their companies. By applying the TOC philosophy based on this information, managers will be able to take the right actions that will improve the profitability of their companies. Specifically, they will be able to observe the effects of several alternatives, such as activity flexibility and outsourcing, on the throughput of the whole system. In addition, the proposed model should help managers to prevent making decisions that sub-optimize the system. This may occur, for example, when using only the most efficient methods to produce each product even though the capacities of these methods are limited and some other less efficient methods are currently available in the company. By extending the model to include more than one time period, managers will be able to estimate the potential bottlenecks and the amount of idle capacities of each non-bottleneck activity performed in the company ahead of time. This information is powerful and can give companies a substantial advantage over their competitors because the users of the new model will have enough time to improve the performance of their potential bottlenecks and to search for more profitable usage of excess capacities before the actual production takes place.
Activity-Based Costing & Warm Fuzzies - Costing, Presentation & Framing Influences on Decision-Making ~ A Business Optimization Simulation ~
Harrison, David Shelby (Virginia Tech, 1998-04-08)
Activity-Based Costing is presented in accounting text books as a costing system that can be used to make valuable managerial decisions. Accounting journals regularly report the successful implementations and benefits of activity-based costing systems for particular businesses. Little experimental or empirical evidence exists, however, that has demonstrated the benefits of activity-based costing under controlled conditions. Similarly, although case studies report conditions that may or may not favor activity-based costing decision making, controlled studies that measure the actual influence of those conditions on the usefulness of activity-based costing information are few. This study looked at the decision usefulness of activity-based costing information under controlled, laboratory settings. An interactive computer simulation tested the ability of 48 accounting majors to optimize profits with and without activity-based costing information and tested to see if presentation format or decision framing would influence their outcomes. The research showed that the activity-based costing information resulted in significantly better profitability decisions and required no additional time. Presentation in graphic (bar charts) or numeric (tabular reports) format did not influence profitability decisions but the graphs took longer for analysis and decision making. Decision framing influences were shown to beneficially affect profitability decisions but did not require additional time. Decision framing was especially helpful with the non-activity based costing information; it had no significant effect on activity-based costing performance.
An aggregate capital budgeting model using a product portfolio approach
Moolman, George Christiaan (Virginia Tech, 1994)
A product portfolio approach is used in this dissertation to develop a model permitting capital budgeting to be modeled interactively with aggregate production planning, in light of market supply and demand functions. Primary emphasis is on the maximization of profit, but other goals are also addressed. These are maximization of the rate of return, maximization of market share, and minimization of the cost of excess capacity. A linear mixed integer programming model is developed for each of these objectives. Then, a single goal programming model that combines all four objectives is formulated. Costs are not allocated to products. Accordingly, the notion of cash flows per product (or per project) is not used. Instead, cost is incurred as a result of the demand that a product portfolio places on resources. All costs are considered to be incurred in the acquisition and utilization (in the form of activities) of resources. Four distinct levels of activities are considered: unit, batch, product sustaining, and facility sustaining. The demand for each resource is aggregated over all levels of variability and over all the products in the product portfolio. The direct cash outflow or inflow as a result of changing resource capacity is continuously traded off against the eventual cost or benefit of changing the capacity (in the form of changed revenues and as a function of both time and market supply and demand). Capital structure and capital investment decisions are considered simultaneously for a given set of assumptions. Different sources of funds are utilized for different costs of capital. Lending and borrowing are simultaneously incorporated without the solutions becoming inconsistent due to incorrect or inappropriate discount factors. This is mainly attributable to the fact that the organization, as a single entity that manufactures a product portfolio, demands capital, and invests excess funds. The net present value of the organization (not of projects or products) is maximized. Also, the output of each project is modeled specifically. This alleviates the practical problem of fractional acceptance of projects. Variable market supply and demand functions are also included and modeled explicitly. Finally, it is shown that the developed model contains several elements of aggregate production planning. The main conclusions from this research are: 1) Better capital budgeting results can be obtained if costs are not allocated to projects (or products) when resources are shared among different projects or products; 2) Financing and investment decisions can be made interactively (with the developed model) without the solutions becoming inconsistent due to unknown discount rates; 3) Resource acquisition and resource consumption should be modeled explicitly in capital budgeting; and 4) The model yields an improvement over existing capital budgeting techniques for a given set of assumptions. Some recommendations are presented for further research to extend these conclusions.
Banker needs for accounting information
Calderon, Thomas G. (Virginia Polytechnic Institute and State University, 1987)
This research examines the extent to which user needs are affected by differences in the size and ownership characteristics of reporting entities. Bank loan officers constitute the target group of financial statement users and the study focuses on the perceived need for sixteen financial statement items. Among these are twelve items for which differentiation in financial reporting has been proposed (key items), and four items that bankers generally require when evaluating a loan application (control items) . The research model is based on the hypothesis that perceptions of accounting information are affected by the decision context, complexity of the organization in which the decision is being made, and the behavior response repertoire of the user. A quasi-experimental design with two treatments is utilized. The treatments are (1) a commercial loan decision involving a small privately held corporation, and (2) a commercial loan decision involving a large public corporation. A questionnaire was mailed to gather the data. Three hundred and fifteen usable responses were received, for a response rate of 21%. The data were analyzed using multivariate analysis of variance and canonical correlation analysis. Differences in the size and ownership characteristics of commercial loan applicants were found to have a statistically significant impact on the perceived needs of bankers for financial statement information. This relationship is most observable among disclosures that are perceived to be of lesser importance in the loan evaluation process. The perceived needs for items that are considered to be of greater importance (for example, the control items) are relatively insensitive to variations in the size and ownership characteristics of commercial loan applicants. Overall, commercial loan officers tend to perceive a relatively high need for general financial statement items, but tend to downplay the importance of the more specific and detailed items. The results also indicate that the organizational complexity of a bank, and the degree to which its commercial loan officers are committed to the work ethic of the banking profession, are significantly related to the perceived need for financial statement disclosures.
Changing taxpayer attitudes and increasing taxpayer compliance: the role of individual differences in taxpayers
McClenny, R. Lorraine (Virginia Tech, 1992)
The level of taxpayer compliance has steadily decreased over the years. Individual taxpayers failed to report approximately $100 billion in federal taxes due on legal income received in 1989. The compliance gap is large enough to greatly reduce the federal government deficit. Studies employing psychological cognitive structure approaches to analyzing taxpayer compliance and attempting to increase taxpayer compliance employ theories related to equity sensitivity, attitude formation, and change. These studies generally examine relationships between compliance and socioeconomic and situational variables. Appeals to a taxpayer's moral obligation to pay taxes have been studied as a means to change taxpayer attitudes and intentions and thereby increase compliance. The present study sought to determine if taxpayer compliance could be enhanced by sanction threats or by appeals to conscience. The study also endeavored to discover if compliance differed between various types of taxpayers. These individual differences were posited to cause taxpayers to react differently to alternative types of interventions aimed at increasing compliance to income tax law. A laboratory study was designed to gauge a subject's sensitivity to equity, administer intervention techniques, and measure compliance and attitude toward taxation. The data were analyzed using Multivariate Analysis of Variance (MANOVA). Although the results of the study showed no significant main effect for treatment type, a significant main effect (p = .0075) was found for Equity Sensitivity type when the scenario depicting Overstating Business Expenses was the dependent variable in the design. There were no significant main effects for Equity Sensitivity type or treatment type when the six attitude items were used as the dependent variables in a MANOVA.
A comparative study of the accounting systems of five countries in East and Southeast Asia
Chang, Young-hang (Virginia Polytechnic Institute and State University, 1988)
The study is designed to enhance an understanding of the accounting systems in Hong Kong, South Korea, Malaysia, Singapore, and Taiwan. The stable social structure, steady political progress, and rapid economic development in the five countries provide a fertile ground for the development of their accounting systems. In the five countries, sufficient statutory and nonstatutory regulations that upgrade quality of accountants and improve financial disclosure by businesses exist. The demand for accountants exceeds their supply throughout the five countries. The accounting profession is prosperous and thriving. Although the five accounting systems still exhibit some differences in ünancial reporting, they are all moving toward more financial disclosure and increasing harmonization of accounting standards. The five countries have growing accounting influence on their neighboring Asian countries because their systems tend to be emulated by these neighbors due to their economic achievements. The accounting systems in Hong Kong, Malaysia, and Singapore can be considered to belong to one category owing to their common British tradition. However, because many American-educated students of the five countries with accounting majors have returned to their home countries, the impact of the American accounting system on the five accounting systems is on the rise. The study also shows that the five accounting systems can benefit from each other’s experiences.
A comprehensive study of stress on individuals in middle- management positions in public accounting
Collins, Karen (Virginia Polytechnic Institute and State University, 1988)
Accounting is generally regarded as a stressful occupation. Research suggests that the most stressful positions in a public accounting firm are those of middle management. Given the pivotal role these individuals play in the accounting firm, it is important to gain an understanding of the stressors they encounter and the consequences of those stressors, as well as any possible moderating effects of personal characteristics. This study of stress in public accounting was conducted to address the following research questions: What environmental factors (both work-related and home-related) contribute to stress at the middle-management level in public accounting? What are the consequences of this stress? Are the consequences of stress modified by the personal characteristics of the individual? Data for the study were collected through questionnaires mailed to a national sample of certified public accountants. The sample consisted of two groups—1,593 individuals presently employed in public accounting positions, and 340 individuals who were employed in public accounting firms but have recently switched to nonpublic accounting jobs. Of the 1,933 individuals sampled, approximately 1,200 (62%) responded. The results of the study suggest that middle-management level public accountants are most stressed by home-related factors (conflict with leisure and conflict with family roles) as well as work-related factors (time pressure and quantitative overload). This stress is associated with several negative outcomes—job-related tension, job dissatisfaction, propensity to leave public accounting, and turnover. Gender and personality type are important moderators of the relationships between the stressors and stress outcomes.
Contingent factors affecting budget system usefulness: an information processing perspective
Cathey, Jack M. (Virginia Polytechnic Institute and State University, 1989)
An examination of the management accounting systems literature revealed the need for additional research based on a contingency perspective. Specifically, additional empirical research based on a well-articulated theory. A theoretical model was developed building on Galbraith’s theory of organization structure. Two sources of uncertainty -- environmental uncertainty and task uncertainty -- were viewed as forming the information processing requirements faced by the organization. In response to these requirements, organizations were viewed as adapting by altering their level of decentralization and their use of budget systems. Organizational effectiveness was achieved by a proper fit between the uncertainty faced by the organization and these responses. Data were collected from business unit managers using a survey instrument. A total of 103 usable responses were obtained with an overall response rate of 49%. Previously developed measures were used for all variables except for budget system usefulness. A measure for this variable was developed and validated. The data were examined using path analysis. The data did not support the model. Problems encountered in the use of perceptual measures for the uncertainty variables appeared to be the most likely explanation for the weak results. However, when the data was split based on the performance measure an interesting result was observed. Specifically, the relationships between the uncertainty measures, decentralization, and budget system usefulness were different for the low and high-performance group. An explanation for this tinding was offered.
A Decision Support System for Advanced Composites Manufacturing Cost Estimation
Eaglesham, Mark Alan (Virginia Tech, 1998-04-10)
The increased use of advanced composites in aerospace manufacturing has led to the development of new production processes and technology. The implementation of advanced composites manufacturing technology is poorly served by traditional cost accounting methods, which distort costs by using inappropriate volume-based allocations of overhead. Activity-based costing has emerged as a methodology which provides more accurate allocation of costs to products or activities by their usage of company resources. Better designs may also be produced if designers could evaluate the cost implications of their choices early in the design process. This research describes a methodology whereby companies can improve product cost estimation at the conceptual design phase, using intelligent searching and arrangement of existing accounting data to enable designers to access the activity cost information more readily. The concept has considerable scope for application in industry because it will allow companies to make better use of information that is already being recorded in their information systems, by providing it in a form which will enable designers to make better informed decisions during the design process. The design decision support framework is illustrated by applying it to a typical problem in aerospace composites manufacturing. Feasibility of the approach is demonstrated using a prototype software model of the Design Decision Support System, implemented using commercially available software.
The Design Dimensions of the Just Organization: An Empirical Test of the Relation Between Organization Design and Corporate Social Performance
Gerde, Virginia Woods (Virginia Tech, 1998-06-30)
Although organization design to bring about corporate social performance (CSP) is a critical issue in the business and society field, little research has been conducted. This study is an empirical test of the general model of the just organization presented by Stephens and colleagues (1991; Stephens, et al., 1997). The theoretical development describes organizational design principles from John Rawls' (1971) Theory of Justice, chosen for its emphasis on economic organizations and structure, its emphasis on efficiency as well as justice, and its affinity with Max Weber's wertrational (or value rationality) social action category from Economy and Society (1978/1910). From the general model of the just organization and characteristic organizational design features (structural and processual) consistent with the general model, an ideal type of just organization is developed. The primary hypothesis is that the more an organization emulates the ideal type of the just organization, the better its social performance will be as measured by higher CSP ratings. The degree of similarity of design with the ideal-type profile of the just organization is measured by the Euclidean distance, or summary distance metric, of the sample organization's profile to the ideal-type profile. The methodology utilizes surveys of corporations for organizational design features and the CSP ratings from the Kinder, Lydenberg, and Domini, Inc., social ratings database. The results indicate that there is no correlation between organization design and social performance when CSP is taken as an aggregate of all the stakeholder-firm relationships. However, when the specific stakeholder relationship is analyzed, there is an association between the presence of stakeholder-specific design features and higher CSP ratings along the stakeholder-specific social rating dimension.
Effectiveness of the complaint-based enforcement system of the AICPA Code of Professional Ethics
Beets, S. Douglas (Virginia Polytechnic Institute and State University, 1987)
The American Institute of Certified Public Accountants (AICPA) is presently considering a proposal to revise the enforcement system of the Code of Professional Ethics from the current complaint-based mechanism to a system based on reviews of practitioners and their work. Inherent within the proposal is the conclusion that the existing enforcement provisions, based on complaints about violations, are not adequate. Complaints about ethics violations can originate from practically anyone although two of the primary initiators of violation complaints are Certified Public Accountants (CPAs) and their clients. CPAs, however, may have limited opportunities to observe violations committed by colleagues. Clients, on the other hand, may be in a prime position to detect departures from the ethics code but may have no incentive to report violations committed by their CPAs; e.g., a violation may benefit the client. A survey of these two groups (CPAs and clients) indicated that while both groups are familiar with the code and believe that the rules of conduct are appropriate, clients do not tend to report violations and CPAs, on average, indicated that they would report observed violations slightly more than one-half the time. These findings suggest that an enforcement system based solely on the complaints of CPAs and clients cannot be effective.
The Effects of Auditors' Trust in Client Management on Auditors' Judgments
Kerler, William A. III (Virginia Tech, 2005-06-27)
This dissertation presents the results of three research studies investigating the role trust plays in an auditor's decisions. The first study examines whether auditors develop trust in a client's management after working with the client during prior audit engagements. The results indicate that auditors have higher trust in the client's management after a positive, overall satisfying experience working with the client compared to a negative, overall unsatisfying experience. The first study also investigates whether auditors" trust in a client affects their audit decisions. The results show a negative relationship between auditors" trust and their fraud risk assessment. Specifically, lower levels of trust are associated with higher levels of risk, and vice versa. Together, the results suggest that auditors may indeed develop trust in a client's management and this trust may affect their audit decisions. The second study examines whether Certified Public Accountants’ (CPAs) level of moral reasoning affects their decision to trust a client's management and the extent to which to trust them. The results show that CPAs with relatively higher levels of moral reasoning have less trust in the client's management than CPAs with relatively lower levels of moral reasoning. The findings indicate that an auditor's decision to trust a client's management is, at least in part, an ethical judgment. Also, because the decision is an ethical one, the findings suggest that trust beyond some threshold would be considered unethical. The third study extends the results of the first study by simultaneously examining how an auditor's trust and the financial importance of the client affect the auditor's decision to accept the client's preferred method of recognizing revenue. The results indicate that auditors" trust in the client's management is positively related to their commitment to the goal of supporting the client's preferred reporting methods (goal commitment), which in turn is positively related to the auditors" assessments of the acceptability of the client's methods for reporting purposes. The importance of the client did not affect auditors" goal commitment or their acceptability assessments. The findings suggest that auditors with higher levels of trust may be more likely to accept the client's preferred method of financial reporting. Overall, these results add to our knowledge of audit judgment and decision-making by providing evidence that auditors do indeed develop trust in a client's management; that the decision and extent to trust the client is in part an ethical judgment; and that auditors" trust may affect their audit decisions. This dissertation highlights the important role that an auditor's trust plays in his or her audit decisions.
Effects of Principles vs. Rules Based Accounting Standards and Increased Audit Reporting on Investors' Perceptions of Management's Reporting Credibility
Ozlanski, Michael Edward (Virginia Tech, 2013-04-23)
The purpose of this study is to investigate how the effects of principles vs. rules based accounting standards and a potential change in the audit reporting model will affect investors' perceptions of management's reporting credibility. The Securities and Exchange Commission is currently considering the adoption of International Financial Reporting Standards, which is considered to be a set of principles based accounting standards. Whereas, U.S. Generally Accepted Accounting Principles are considered rules based. Additionally, the Public Company Accounting Oversight Board is considering a possible change to the existing audit reporting model. The audit reporting change currently under consideration would require the use of additional emphasis of matter paragraphs within the audit report to discuss areas of higher risk in the financial statements. A sample of 196 nonprofessional investors completed an on-line 2 X 2 between subjects experiment that manipulated accounting standard type and level of auditor reporting. Participants assessed direct and indirect measures of reporting credibility, obtained the experimental manipulations, and provided revised credibility assessments. Changes in credibility served as the dependent variable. The results suggest that expanded auditor reporting resulted in lower perceptions of management\'s reporting credibility. Additionally, the effects of expanded auditor reporting appear stronger under rules based accounting standards. No main effects, however, of accounting standard type were observed. These results contribute to the existing literature on accounting standard type, the information content of audit reports, and reporting credibility.
An empirical investigation into differences between companies that elected an early compliance with SFAS 52 and companies not electing an early compliance
Brown, Betty Coffee (Virginia Polytechnic Institute and State University, 1985)
The latest foreign currency translation standard, Statement of Financial Accounting Standard No. 52 (SFAS 52), promulgated in December of 1981, was issued in response to harsh criticisms of its predecessor, Statement of Financial Accounting Standard No. 8 (SFAS 8). Large foreign currency translation gains and losses, resulting from the use of the temporal translation method, were required to be reported in net income under the al1—inclusive income concept mandated by SFAS 8. In contrast, SFAS 52 adopted the functional currency approach whereby companies whose functional currency is the local currency are required to use the current rate method, generally resulting in only minor translation gains and losses that are required to be reported in a separate component of stockholders' equity. This study compares seven specific financial attributes between 83 Fortune 500 companies electing a December 31, 1981, compliance and 103 Fortune 500 companies not opting for a 1981 adoption. Univariate t—tests on each attribute indicate the strongest difference between the two groups is in the foreign currency translation gains and losses for 1981. The multivariate Hotelling T2 test simultaneously compared differences in the seven attributes for the two groups. Test results indicate the two groups of companies are different. Since the "yo-yo" effect on earnings was an often cited reason for opposing SFAS 8, differences in the volatility in reported earnings between the two groups for the five-year period covered by SFAS 8 (1976-1980) were examined using three different measures. The overall conclusion was that companies adopting the standard early did not have more volatility in earnings than the other group during the period that SFAS 8 was in effect. Security price reactions to the early adoption were also investigated. Surprisingly, a strong market reaction was indicated. Significant differences between the cumulative average residuals (CARs) for the two groups began two weeks prior to year-end and continued for five months. The CARs for the group that adopted SFAS 52 early generally performed better than expected whereas the residuals for the companies that continued to report under the temporal method were worse than expected.
An empirical study of the fidelity of organziational accounting communication and the impact of organizational culture
Johnson, Steven D. (Virginia Tech, 1991-06-04)
Communication and culture both play essential roles in organizations. The effective communication of accounting information is required to coordinate business operations and move the organization toward the accomplishment strategic goals. Without effective communication, the most sophisticated analyses and crucial reports will fail to generate appropriate decisions and actions. Culture is a symbolic system of values that helps the members of an organization explain, coordinate, and evaluate behavior and to ascribe common meanings to events and symbols encountered in the organization. Organizations confine the experience and interaction of its members into structured and recurring patterns. As organization members interact, shared meaning for issues of common interest evolve. A technical organizational language develops whose symbols have definite and common meaning. If the culture of organizations or subcultures within an organization are different, dissimilar meanings could be ascribed to the management accounting terms (symbols) used to communicate accounting information. Dissimilar meanings could inhibit the fidelity of accounting communication within and between organizations and organization subunits.
An Examination of Decision Aid Reliance in a Dynamic Environment
Briggs, John Whitfield (Virginia Tech, 2003-12-11)
Computerized decision aids are powerful tools to assist with decision-making. Decision models are designed to incorporate and analyze available data in order to present a recommended solution to a problem. Business decision makers, including accountants, have much to gain from integrating decision support technology with their own skills and experience. Several studies have determined that there are many instances in which these decision aids perform favorably to human decision-makers. Despite this fact, studies have shown that reliance upon these aids is incomplete, even when they process data in a highly efficient manner. On the other hand, decision aids have limitations. If such a decision support system is not updated to match changing conditions, relying on the aid can lead to suboptimal decision-making. This study uses a laboratory experiment involving a managerial accounting task: prediction of manufacturing overhead costs. In the experimental scenario, a decision support system's recommended solutions become inaccurate due to a shift in environmental conditions. The first research objective is to determine whether subjects rely on the aid's advice before this change and, to their detriment, after the change. The second research objective is to examine whether the feedback environment, the timing of the decision aid's inclusion into the task, or the inherent confidence level of the task participant affect the tendency to rely on the aid in both of these environmental conditions. The results of the study provide evidence that decision-makers rely on decision aids, and are susceptible to over-reliance on them. These findings add to the results of prior studies that only examine a single trial task. Additionally, it is determined that the timing of a decision aid's recommendation can affect the degree to which it is relied upon. Next, there is evidence that feedback environment can help reliance and mitigate over-reliance. There is no evidence that task confidence affects reliance. Lastly, decision aids result in longer amounts of time used to complete the task.
An Examination of Organizatinal Performance Measurement System Utilization
DeBusk, Gerald Kenneth (Virginia Tech, 2003-12-17)
This dissertation provides results of three studies, which examine the utilization of organizational performance measurement systems. Evidence gathered in the first study provides insight into the number of perspectives or components found in the evaluation of an organization's performance and the relative weight placed on those components. The evidence suggests that the number of performance measurement components and their relative composition is situational. Components depend heavily on the strategies selected by the organization. Bottom-line financial measures like return on invested capital and net profit, while perceived as more important than their nonfinancial counterparts, were not part of the extracted components suggesting that they were viewed as outcomes to be achieved by controlling key nonfinancial measures. The second study examines potential cognitive difficulties inherent in the use of performance measurement systems. Results suggest that whether performance was better than target, worse than target, or equal to target does not affect the perceived importance of the measures. Results also suggest an emphasis on historical financial measures and a lack of emphasis on more forward-looking nonfinancial measures. In addition, there is evidence of a halo effect in that an organization's performance on financial measures appears to influence an individual's perception of the organization's performance on nonfinancial measures. The third study uses structural equation modeling and other related procedures to examine the relationships surrounding an executive's use of performance measurement information. Results suggest that a personality characteristic of executives, specifically their intolerance of ambiguity, affects the amount of information perceived to be important in a performance measurement system. The results further suggest that the amount of information perceived to be important affects the evaluation of organizational performance with perceived risk serving as a mediating variable. Overall, these three studies add to our knowledge of organizational performance measurement system utilization by examining the relative weightings of performance measures, the judgmental effects from utilization of performance measurement systems, and the impact of intolerance of ambiguity on the importance of performance measurement data. In addition, this dissertation examines the link between performance measurement data and the perception of risk in the evaluation of organizational performance.
An Examination of the Effectiveness of Sanction Based Tax Compliance Persuasive Messages over Repeated Periods
Adams, Mollie (Virginia Tech, 2010-03-15)
Prior tax compliance literature has examined the use of persuasive messages that emphasize audit and sanctions as a way to increase compliance. This work has been done in single period experiments using either survey or field study methodologies. Results from the prior studies are mixed. The theory of reasoned action is a theory of social behavior that promotes emphasizing direct consequences of actions to motivate specific behavior. Persuasive messages based on this theory have been found to be effective in a number of different disciplines. The theory of reasoned action has been used in the field of tax compliance to explain compliance behavior and examine the behavioral beliefs related to compliant reporting, but has not been used to design persuasive messages aimed at increasing compliance. In this dissertation, I conduct a laboratory experiment that examines the effects of two types of messages - a traditional message consisting of a simple reminder of audit risk and a message designed based on the theory of reasoned action. Consistent with prior research on tax compliance, I test the messages in an initial single period but I extend prior research by also examining the effects of the messages over repeated periods. Neither the traditional message nor the message based on the theory of reasoned action have a significant effect on initial period compliance. The interaction effect of the traditional message and time on tax compliance is positive and significant and the interaction effect of the theory of reasoned action message and time on tax compliance is positive and marginally significant. These results provide evidence that the messages may be effective in increasing an individual's tax compliance over time. In the repeated period data, the theory of reasoned action message exhibits a positive and significant impact on the amount of income reported when an individual reports less than 100% of their earned income, providing evidence that messages designed based on the theory of reasoned action may be an effective tool in reducing the tax gap.

Browsing by Author "Killough, Larry N."

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