Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports
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 re...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2019
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| Online Access: | https://hdl.handle.net/10356/103416 http://hdl.handle.net/10220/49490 |
| _version_ | 1826126415216508928 |
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| author | Tan, Hun-Tong Yu, Yao |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Tan, Hun-Tong Yu, Yao |
| author_sort | Tan, Hun-Tong |
| collection | NTU |
| description | 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. |
| first_indexed | 2024-10-01T06:52:17Z |
| format | Journal Article |
| id | ntu-10356/103416 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T06:52:17Z |
| publishDate | 2019 |
| record_format | dspace |
| spelling | ntu-10356/1034162023-05-19T06:44:42Z Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports Tan, Hun-Tong Yu, Yao Nanyang Business School Business::Accounting Internal Controls over Financial Reporting Section 404 of SOX 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. 2019-07-30T09:05:55Z 2019-12-06T21:12:13Z 2019-07-30T09:05:55Z 2019-12-06T21:12:13Z 2018 Journal Article 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 0001-4826 https://hdl.handle.net/10356/103416 http://hdl.handle.net/10220/49490 10.2308/accr-52077 en The Accounting Review © 2018 American Accounting Association. All rights reserved. |
| spellingShingle | Business::Accounting Internal Controls over Financial Reporting Section 404 of SOX Tan, Hun-Tong Yu, Yao Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title | Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title_full | Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title_fullStr | Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title_full_unstemmed | Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title_short | Management's responsibility acceptance, locus of breach, and investors' reactions to internal control reports |
| title_sort | management s responsibility acceptance locus of breach and investors reactions to internal control reports |
| topic | Business::Accounting Internal Controls over Financial Reporting Section 404 of SOX |
| url | https://hdl.handle.net/10356/103416 http://hdl.handle.net/10220/49490 |
| work_keys_str_mv | AT tanhuntong managementsresponsibilityacceptancelocusofbreachandinvestorsreactionstointernalcontrolreports AT yuyao managementsresponsibilityacceptancelocusofbreachandinvestorsreactionstointernalcontrolreports |