Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/103416
Title: Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports
Authors: Tan, Hun-Tong
Yu, Yao
Keywords: Business::Accounting
Internal Controls over Financial Reporting
Section 404 of SOX
Issue Date: 2018
Source: Tan, H.-T., & Yu, Y. (2018). Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports. The Accounting Review, 93(6), 331-355. doi:10.2308/accr-52077
Series/Report no.: The Accounting Review
Abstract: The triangle model of responsibility (Schlenker, Britt, Pennington, Murphy, and Doherty 1994) predicts that the extent that investors hold management responsible for an adverse event is jointly determined by the links among three elements—management, the adverse event, and the relevant accounting regulations/standards or public norms. Applying this theory, we conduct experiments to examine how the locus of breach (external versus internal) moderates the efficacy of management's responsibility acceptance (higher versus lower). Our results show that management's higher (versus lower) responsibility acceptance is a more effective strategy in the presence of an external breach, but not in the presence of an internal breach (Experiment 1). Follow-up experiments suggest that this result is driven by the relative strength of the triangle links underlying the external versus internal breaches, rather than the locus per se.
URI: https://hdl.handle.net/10356/103416
http://hdl.handle.net/10220/49490
ISSN: 0001-4826
DOI: http://dx.doi.org/10.2308/accr-52077
Rights: © 2018 American Accounting Association. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:NBS Journal Articles

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