Experimental research in financial accounting

A reading of back issues of the major academic journals in accounting suggests an increasing number of laboratory experiments. Since 1970, the results of over 100 experiments have been published in Accounting, Organizations and Society, The Accounting Review, and the Journal of Accounting Research. These experiments have focused on the behavior of subjects in response to a wide variety of settings and stimuli. Our intent here is to provide an assessment of laboratory experiments in accounting. We do not intend to provide a review of these experiments, since several reviews of experimental research in accounting are available. Dyckman, Gibbins, and Swieringa [1978] review and evaluate experimental and survey research in financial accounting, Gibbins [1977] reviews behavioral research in auditing, and Ashton [1982], Libby [1981], and Libby and Lewis [1977; 1982] review human information processing research in accounting. Also, a review of the diverse accounting experiments would have to be very general. For example, Berelson used to summarize Berelson and Steiner [1964], which contained 1,045 established propositions about human behavior, with three propositions: (1) some do, some don't; (2) the differences aren't very great; and (3) it's more complicated than that. These propositions also may provide more than a casual summary of results from laboratory experiments in accounting.

Defining management accounting constructs: A methodological note on the risks of conceptual misspecification

Financial accounting is essential to financial accountability, which is essential to a prosperous society. There are many examples of how improvements to financial accounting, supported by research, have enhanced financial accountability. Such research requires a strong relation between accounting academics and practice; this relation has ebbed and flowed during the life of Abacus. The relation seems to ebb when accounting academics embrace related fields and flows when the relevance to accounting practice emerges. Economics and finance have provided new perspectives and meaningful insights about the information investors need to make informed decisions. Regardless, there are many intriguing and open questions awaiting accounting research that can provide insights into how financial accounting—and thus financial accountability—can be improved. The future is bright for financial accounting researchers who do research relevant to accounting practice and want to contribute to a prosperous society.

Experimental Economics: Economic and Game Theoretic Principles in Experimental Research in the Social Sciences

ABSTRACTA large body of the published research in financial accounting provides strong and persuasive evidence on the association between accounting numbers and stock prices but falls short of drawing any implications about accounting policies on measurements or on reporting. Attempting to go beyond association the author of this paper provides an application of a possible methodology for evaluating materiality of accounting measurements in a given decision situation. The methodology employs discriminant analysis in which the sensitivity of the discriminating model to the changes in mean earnings per share provides a decisions reaction scale and shows that a change in mean earnings per share equal to or less than 10% does not significantly affect the prediction. The validity of the results would depend on the correspondence between this model and the behavior of decision‐makers. However, in situations such as the one chosen here, in which an investor's decision‐making process cannot be normatively structured, appropriate statistical methods effectively can be utilized to describe the process.

Research methods and methodology towards knowledge creation in accounting

<b>MARCH 2013 PLACEMENT ADS</b>

The focus group method has been used extensively in social science research in order to gain a deep understanding of participant perceptions of specific topics of interest. However, the method has rarely been used in the social accounting and accountability literature. This paper reviews and critically reflects on the key characteristics of the method drawing on a research project examining NGO (non‐governmental organisation) beneficiary perspectives on the accountability processes employed by NGOs in Ghana. It offers insights and future research suggestions that might encourage greater use of the method by social accounting and accountability researchers.

RIO GRANDE VALLEY, the Robert C. Vackar College of Business and Entrepreneurship, School of Accountancy invites applications from

This study investigates the interrelations between accounting research and the IASB activity. Prior research shows a significant gap between academia, the standard setters and the accounting profession and underlines the failure of academic papers to contribute to accounting practice. Although we find some evidence of the intention of the IASB to fill the gap between accounting theory and practice, our analysis confirms the existence of a significant distance between financial accounting research and the IFRSs. The IASB ‘due process’ definitely influences the academic activity, but the accounting literature does not seem to represent a cornerstone for the IFRSs. Particularly, during the ‘due process’ steps that precede the P.I.R. phase, the IASB only quotes few papers. With the P.I.R. process, the number of research papers analysed by the IASB significantly increases, but it is not yet clear how this ex-post activity might really influence the IFRSs statements. Finally, we find that the traditional academic ranking systems are not a key factor driving the IASB selection of the articles to analyse during the P.I.R. process. This evidence sheds light on the risk of an unfruitful self-referentiality of the accounting academic literature and on the self-feeding nature of the academic world.

Purpose Manipulation checks are a recommended for experimental accounting research. Usage of information gained by manipulation checks varies. In some studies, participants who failed the manipulation check are removed from the sample. Other studies report the results of the manipulation checks but still use the full sample. Some authors recommend removing participants who failed the manipulation check as a means to increase the power of the statistical analysis. Others warn that removing these participants endangers the randomization as a crucial precondition for gaining valid insights from experimental research. Until now, there is little research on how sensitive results react to exclusion of participants. The purpose of this paper is to study the effects of removing participants failing the manipulation checks on the evaluation of a hypothesis and the development of alternative usages of the information gained from manipulation checks. Design/methodology/approach Based on an analytical model and a simulation, the authors show how removing participants who fail the manipulation check affects experimental findings. Findings Simulations show that statistical results and conclusions drawn from an experiment differ substantially, depending on whether participants who failed the manipulation check are removed from the sample. As the participants who are removed are no random sub-sample, but share a certain property, the experimental results react strongly, typically showing significant results, where there are actually none. Originality/value This paper is, to the best of the authors’ knowledge, the first to address the sensitivity of experimental results to removing participants who fail the manipulation check from the sample and the implications for the validity of conclusions drawn from experimental accounting research. This paper’s contribution is a better way of using information gained in the manipulation check in the statistical analysis of the experimental data.

Behavioral and experimental economics have conventionally employed text data to facilitate the interpretation of decision-making processes. This paper introduces a novel methodology, leveraging text data for predictive analytics rather than mere explanation. We detail a supervised classification framework that interprets patterns in chat text to estimate the likelihood of associated numerical outcomes. Despite the unique advantages of experimental data in correlating textual and numerical information for predictive modeling, challenges such as limited sample sizes and potential data skewness persist. To address these, we propose a comprehensive methodological framework aimed at optimizing predictive modeling configurations, particularly in small experimental behavioral research datasets. We also present behavioral experimental data from a preregistered tax evasion game (n=324), demonstrating that chat behavior is not influenced by experimenter demand effects. This establishes chat text as an unbiased variable, enhancing its validity for prediction. Our findings further indicate that beliefs about others’ dishonesty, lying attitudes, and risk preferences significantly impact compliance decisions.

(1992). Relationships between financial accounting research, standards setting and practice in Germany. European Accounting Review: Vol. 1, No. 1, pp. 27-38.

Abbas A. M., Graham J. H. &amp; Magnus O. (2006) International Financial Reporting Standards workbook and guide. Adzongo, A. A., &amp; Agbo, H. E. (2020). Financial Reporting and Accountability in Public Tertiary Institutions in Benue State, Nigeria. Journal of Accounting and Financial Management, 6(1), 1-12. Agada, J. O. (2020). Financial Reporting and Accountability in Public Tertiary Institutions in Benue State, Nigeria (Ph.D. Thesis). Benue State University. Akiga, P. A., &amp; Ochai, A. O. (2020). Financial Reporting and Accountability in Public Tertiary Institutions in Benue State, Nigeria. Proceedings of the 14th International Conference on Accounting and Finance, 12-14. Beest, F. V., Braam, G. &amp; Boelens, S. (2009). Quality of Financial Reporting: measuring qualitative characteristics, Accessed online on http://www.ru.nl/nice/workingpapers on 12/6/2017. Bizavings, (2016). Importance of Transparency in Financial reporting. Retrieved from:http://www.streetdirectory.com/travel_guide/29036/business_and_finance/the_Impo rtance_of_transparency_in_financial_reporting.html Edeh, C. I., Akinola, R., &amp; Uzoh, M. (2023). Financial accountability and transparency in Nigeria University: Challenges and prospects. African Journal of Educational Management, 18(1), 43-56. Iorliam, A. M., &amp; Okolo, J. U. (2019). The Impact of Financial Reporting on Transparency and Accountability in Nigerian Public Universities: A Study of Benue State University. Proceedings of the 13th International Conference on Financial Management, 20-22. Ikyo, P. O., &amp; Ochai, A. O. (2019). The Impact of Financial Reporting on Transparency and Accountability in Nigerian Public Universities: A Study of Benue State University. International Journal of Financial Research, 10(3), 148-158. Igba, P. O. (2019). The Impact of Financial Reporting on Transparency and Accountability in Public Universities in Benue State, Nigeria ((link unavailable) Thesis). University of Agriculture, Makurdi. Ode, E. J., &amp; Okolo, J. U. (2018). Financial Reporting Quality and Accountability in Public Institutions in Nigeria: Evidence from Benue State. Journal of Financial Reporting and Accounting, 16(1), 55-70. Ogundipe, O., &amp; Olufemi, A. (2021). Policy reforms and the role of financial reporting in enhancing transparency in Nigerian higher education. Policy and Governance Review, 5(4), 112-124. Ogunleye, J. A., Sanni, B., &amp; Adeyemi, T. (2020). Financial reporting quality and accountability in Public tertiary institutions in Benue State. Journal of African Studies in Education, 5(2), 55-70. Olayemi, K. (2022). Financial disclosure and accountability in Public tertiary institutions in Benue State. West African Journal of Business and Management, 14(1), 32-45. Onalo, U., LIzam, M., &amp; Kaseri, A., (2014). International Financial Reporting Standards and the Quality of Banks Financial Statement Information: Evidence from an Emerging Market- Nigeria, European Journal of Business and Social Sciences, 3, (8):243-255. Nwafor, A., &amp; Onah, G. (2021). Financial reporting and accountability in Nigerian public universities. International Journal of Management Studies, 9(2), 68-85. Stainbank, L. J. (2014). Factors Influencing the Adoption of International Financial Reporting Standards by African Countries, South African Journal of Accounting Research, 28 (1): 79-95.

<b>Editorial Policy and Style Information</b>