The Effect of Reversibility on a Manager's Decision to Record Asset Impairments

Trottier, Kim

doi:10.2139/ssrn.1840746

Cited by 7 publications

(13 citation statements)

References 31 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our paper addresses these issues by analyzing a financial reporting experiment conducted on a sample of senior managers involved in their firms’ accounting decisions (Trottier, ), and subsequently replicated with a sample of undergraduate business students recruited from a fourth year Accounting Theory course. The experiment (see appendix) presented a setting where a fictitious manager must choose whether to record an impairment loss on an asset.…”

supporting

confidence: 69%

“…The differences by treatment are explored more precisely in Table . Here we estimated the differential and interactive effects with an ANCOVA model for consistency (Trottier, ) and to allow for interpretation of the coefficients. The model is:

italicLikelihood = α prefix+ β_{1} italicReversible prefix+ β_{2} italicNoBonus prefix+ β_{3} italicInteraction prefix+ δ_{1} italicSDum prefix+ δ_{2} italicSDum * italicReversible prefix+ δ_{3} italicSDum * italicNoBonus prefix+ δ_{4} italicSDum * italicInteraction prefix+ ε

…”

Section: Resultsmentioning

confidence: 54%

“…Panel B of Table tabulates the results from an ANCOVA estimate of Equation for students (n = 103) and managers (n = 118) separately. The first column reports the coefficients obtained with the manager sample, which are consistent with the original study on the likelihood of impairments (Trottier, ) . The coefficients from estimating the model with the student sample are tabulated in the second set of columns in Panel B.…”

Section: Resultsmentioning

confidence: 99%

“…The responses received from the manager sample have been analyzed and published (Trottier, ), warranting a summary of those findings and their implications. The author found that both the reversibility and bonus plan have an effect on the perceived likelihood the impairment will be recorded.…”

Section: Background Framework and Hypothesesmentioning

confidence: 99%

“…Therefore, we expected students to recognize that the manager's decision to record the asset impairment would affect the manager's utility. A priori, we had no reason to expect students to respond differently from the managers surveyed in Trottier ().…”

Section: Background Framework and Hypothesesmentioning

confidence: 99%

See 4 more Smart Citations

Students as surrogates for managers: Evidence from a replicated experiment

Trottier

Gordon

2016

Can J Adm Sci

Self Cite

View full text Add to dashboard Cite

Using students as surrogates for managers in experiments is commonplace, yet the validity of this practice has not been fully established. To explore the appropriateness of using student samples, we replicate an experiment previously conducted employing a sample of senior managers involved in financial reporting. The result is that although student and manager responses are significantly different from a statistical perspective, both samples lead to the same conclusion for this experiment. The findings suggest that having some disassociation between students and the target population they are meant to represent does not necessarily make them inappropriate surrogates. To examine when inferences are best supported, we explore the comparability for student subgroups and managers along dimensions of experience, knowledge, culture, and gender. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.Keywords: students, surrogates, experiments, ethics, knowledge/expertise Résumé L'utilisation des étudiants en lieu et place des gestionnaires pendant les expériences est une pratique courante, mais dont la validité n'est pas pleinement établie. Pour en examiner la validité, nous reprenons, dans cet article, une expérience antérieure menée sur un échantillon composé de cadres supérieurs impliqués dans la communication d'information financière. L'étude montre que même si les résultats des étudiants et ceux des gestionnaires diffèrent considérablement du point de vue statistique, dans le cadre de notre expérience, les deux échantillons permettent de déboucher sur les mêmes conclusions. Elle révèle aussi que le fait de dissocier les étudiants de la population cible qu'ils sont censés remplacer ne remet pas forcément en cause leur statut de substituts appropriés. Pour examiner les meilleurs arguments qui appuient les inférences formulées, nous explorons la comparabilité entre les sousgroupes d'étudiants et les gestionnaires à partir des quatre dimensions suivantes: l'expérience, la connaissance, la culture et l'appartenance sexuelle.

show abstract

supporting

confidence: 69%