Discussion of an Experimental Investigation of Alternative Damage-Sharing Liability Regimes with an Auditing Perspective

The Effect of Ethical Commitment Reminder and Reciprocity in the Workplace on Misreporting

“…This finding is consistent with Mayhew and Murphy (2014, p. 424), who rely on moral disengagement theory (Bandura, 1990(Bandura, , 1999Bandura et al, 1996) and conclude that "it is more likely that individuals experience negative affect on a continuum where the decision to misbehave does not depend on reducing ex-post negative affect to zero but to a tolerable threshold level." The study's findings provide support for the validity of relying on multiple theories (e.g., self-concept maintenance theory and social exchange theory) to explain the misreporting phenomenon (Chong & Eggleton, 2007;Kachelmeier, 1994Kachelmeier, , 1996Luft, 1997;Merchant et al, 2003).…”

“…The results reveal that managers (i.e., superiors) who are obliged to reciprocate are more likely to engage in an unethical action that would benefit the subordinate who helped them before; however, managers make this unethical decision only when the formal control of an ethical commitment reminder is absent. Third, the findings support the validity of relying on multiple theories (e.g., self-concept maintenance theory and social exchange theory) to explain the phenomenon of misreporting (Chong & Eggleton, 2007;Kachelmeier, 1994Kachelmeier, , 1996Luft, 1997;Merchant et al, 2003). The study reveals that while the social exchange theory predicts that individuals will misreport, self-concept maintenance theory explains individuals' actual dishonest behavior and their desire to maintain a positive self-image, and moral disengagement theory suggests that individuals will misbehave "to a tolerable threshold level" (Mayhew & Murphy, 2014, p. 424).…”

An Empirical Study of Audit ‘Expectation Gap’ in The People's Republic of China

“…This viewpoint has been touted by the profession on the grounds that audits are designed to assure the conformity of financial statements with GAAP, and fraud prevention and detection should be the responsibility of management who bear a legal obligation for truthful financial reporting (CAR, 1978;Nair & Rittenberg, 1987;Goldberg, 1988;CICA, 1988;Martens & McEnroe, 1991;Chapman, 1992). Accordingly the public should be educated on the nature and limitations of independent auditing (AICPA, 1987;APC, 1990;Fogarty et al, 1991;Kachelmeier, 1994).…”

The impact of reliance on incentive-based compensation schemes, information asymmetry and organisational commitment on managerial performance

“…Frederickson (1992) also argues that conclusions drawn from agency theory-based models that ignore behavioural factors should be interpreted cautiously. In addition, numerous studies (Baker et al, 1988;Kachelmeier, 1994Kachelmeier, , 1996Luft, 1997;Evans et al, 2001;Merchant et al, 2003) argued that better insights may be gained if the results of agency and behavioural studies are integrated. For example, it has been asserted that a manager's level of organisational commitment 1 From an agency theory perspective, an incentive-based compensation scheme exerts two important functions: selection and effort effects.…”