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Accounting for Accountability: Theoretical and Empirical Explorations of a Multifaceted Concept
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.ORCID iD: 0000-0001-8750-5666
2023 (English)Doctoral thesis, comprehensive summary (Other academic)
Description
Abstract [en]

This dissertation extends our understanding of accountability in the accounting literature, where discourses revolve around diverse manifestations of accountability. While accountability is often conceptualized as a management control tool, accountability also seems to operate through inter- and intra-personal mechanisms. This apparent elusiveness has caused confusion in the accounting literature about what accountability is, how it operates, and how it should be ultimately investigated.

The dissertation focuses on two distinct manifestations of accountability to clarify and modify explanatory mechanisms of accountability in the accounting literature. Both have in common that they explore the cognitive mechanisms of accountability involved in accounting practice, relying on behavioral, psychological, and neurobiological evidence.

Based on two laboratory experiments and one field experiment, the findings of this dissertation reveal that distinguishing between different mechanisms of accountability contributes to our understanding of how accountability is involved in the emergence of stress and dysfunctional organizational behavior. Specifically, the findings demonstrate that accountability does not only operate through external control but also through internal, self-regulatory mechanisms. Rationalization processes enable individuals to engage in potentially dysfunctional reporting behavior, while evading emotional self-sanctions, which has implications for situations where formal control is less salient. The findings of this dissertation also suggest that we need to modify our view on how accountability mechanisms are involved in the emergence of stress in the performance evaluation process. Based on neurobiological evidence, the findings reveal that individuals’ prolonged anticipation of being held to account adds to unconscious stress build-up over time, which implies that frequent performance evaluations can relieve stress.

The cumulative findings of this dissertation contribute to the accounting literature by revealing accountability as a mechanism that is inherently intertwined with what humans naturally do, that is, to self-regulate and anticipate future threats. This has implications for accounting research and practice in terms of relevant theoretical frameworks and methodological approaches, as well as control system design.

Place, publisher, year, edition, pages
Uppsala: Department of Business Studies, Uppsala University , 2023. , p. 50
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 219
Keywords [en]
accountability, stress, reporting behavior, performance evaluation, rationalization, neurobiology, experimental research
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:uu:diva-497738ISBN: 978-91-506-2994-1 (print)OAI: oai:DiVA.org:uu-497738DiVA, id: diva2:1741024
Public defence
2023-04-24, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 10:15 (English)
Opponent
Supervisors
Available from: 2023-03-31 Created: 2023-03-02 Last updated: 2023-03-31
List of papers
1. Understanding accountability: Theoretical and empirical challenges
Open this publication in new window or tab >>Understanding accountability: Theoretical and empirical challenges
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper reflects on the theoretical and empirical challenges of investigating accountability. While theoretical arguments in the experimental accounting literature largely revolve around the cognitive mechanisms of accountability, that is, how individuals perceive, interpret, and cope with accountability demands, these processes remain largely unaccounted for in empirical investigations of accountability. Three distinct empirical levels of accountability operationalizations in the experimental accounting literature are identified, ranging from institutional, social, to individual levels. Our synthesis reveals that the more we move toward the institutional level of operationalization, the larger the gap between operationalized and theorized mechanisms of accountability. We suggest that one possible explanation for these mismatches relates to the apparent confusion in the literature about what accountability is and how its causal chain operates. The existence of different levels of operationalization also suggests that research findings may be based on different theoretical and empirical manifestations of accountability within the overall causal chain of accountability mechanisms. The paper concludes by suggesting that future research should integrate the three empirical levels into a more theoretically complete operationalization of accountability. 

Keywords
accountability, judgement and decision-making, experimental research, accounting, operationalizations
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-497733 (URN)
Available from: 2023-03-02 Created: 2023-03-02 Last updated: 2023-03-02
2. How the opportunity to rationalize misreporting affects business unit controllers’ feelings of guilt
Open this publication in new window or tab >>How the opportunity to rationalize misreporting affects business unit controllers’ feelings of guilt
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper investigates how business unit (BU) controllers deal with trade-offs between their local and fiduciary duty, both cognitively and emotionally. I propose that the level of guilt that BU controllers experience depends on how well they can rationalize a decision to violate their fiduciary duty. To test my prediction, I designed a randomized, scenario-based experiment with professional controllers, where I provided both the opportunity and the motivation to misreport. Subsequently, I either restricted (treatment) or did not restrict (control) opportunities to rationalize misreporting ex-post. My findings suggest that opportunities to rationalize do play a role in reducing guilt in BU controllers, albeit different from what I had expected. The findings suggest that BU controllers experience increased guilt from misreporting despite having opportunities to rationalize, suggesting that violations of fiduciary duty are not easily rationalized away. However, when BU controllers were made aware of the moral implications of their decision, their ease of rationalization increased, and guilt levels decreased. It seems that attempts to restrict rationalizations have increased the level of threat to BU controllers’ professional integrity, triggering them to reduce guilt more actively. The findings have implications for control mechanisms aiming to increase BU controllers’ awareness of the moral ambiguity of misreporting in the interest of the BU.  

Keywords
guilt, rationalization, budgetary slack, business unit controllers
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-497735 (URN)
Available from: 2023-03-02 Created: 2023-03-02 Last updated: 2023-03-02
3. The slippery road of earnings management: The role of rationalization as a coping strategy for guilt
Open this publication in new window or tab >>The slippery road of earnings management: The role of rationalization as a coping strategy for guilt
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper investigates the causal mechanisms through which earnings management becomes an acceptable practice in organizations. I propose that individuals often cope with earnings management by re-construing it as ultimately reasonable and appropriate. Once guilt from misreporting can be relieved through rationalization, re-engaging in earnings management becomes less ethically problematic. I expect that interfering with this rationalization process increases guilt and therefore motivates individuals to rectify previous transgressions. I examine this proposition with a randomized scenario-based experiment with business students, where I disable versus do not disable rationalizations after managing earnings, and subsequently measure changes in guilt and reporting behavior. The findings contribute to the accounting literature by revealing guilt as the causal mechanism through which rationalization processes facilitate or curb the acceptability of earnings management over time. Specifically, the results confirm that increasing guilt from misreporting can trigger rather drastic behavioral changes, pointing to rationalization as an important target for intervention. The study adds to previous accounting research by showing that impeding rationalization is not only important to prevent misreporting from occurring in the first place, but that interfering with rationalization processes after misreporting is crucial to avoid earnings management to become the routine rather than the exception. The findings emphasize the importance of identifying and managing the underlying, often hidden, processes and structures that enable rationalization processes in organizations. 

Keywords
earnings management, guilt, rationalization
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-497736 (URN)
Available from: 2023-03-02 Created: 2023-03-02 Last updated: 2023-03-02
4. Performance evaluations and stress: Field evidence of the hormonal effects of evaluation frequency
Open this publication in new window or tab >>Performance evaluations and stress: Field evidence of the hormonal effects of evaluation frequency
2021 (English)In: Accounting, Organizations and Society, ISSN 0361-3682, E-ISSN 1873-6289, Vol. 95, article id 101279Article in journal (Refereed) Published
Abstract [en]

Accounting studies document that performance evaluations may cause evaluatees to experience job related stress and suggest there is a positive relationship between the frequency of such evaluations and stress. In this paper we aim to modify this suggestion. Since performance evaluations also involve a periodic discharge of accountability for evaluatees, we expect that low evaluation frequency may cause stress as well. Drawing on the neurobiological literature on allostatic load, we argue that the prolonged anticipatory threat of being held accountable adds to stress buildup over time. Such buildup is often not consciously experienced but shows in hormonal patterns that are associated with delayed job-related dysfunctions such as burnout. We conducted a one-year field experiment, in which we observed enhanced stress-hormone levels (cortisol and thyrotropin) in participants assigned to a 12-week performance evaluation cycle compared to participants remaining in a 6-week cycle. We found no corresponding difference between conditions on self-reported mental fatigue. This confirms our expectation and suggests that adopting a neurobiological view of job-related stress provides a complementary account of the effect of performance evaluation on both immediately experienced and delayed manifestations of job-related stress. (c) 2021 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Place, publisher, year, edition, pages
Elsevier, 2021
Keywords
Performance evaluation, Accountability, Stress, Neurobiology
National Category
Business Administration
Identifiers
urn:nbn:se:uu:diva-460215 (URN)10.1016/j.aos.2021.101279 (DOI)000722027700004 ()
Funder
Riksbankens JubileumsfondSwedish Research Council
Note

Correction in: Accounting, Organizations and Society, Volume 112, June 2024, 101544

DOI: 10.1016/j.aos.2024.101544

Available from: 2022-01-12 Created: 2022-01-12 Last updated: 2024-05-17Bibliographically approved

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