How Outcome Information Affects Ethical Attitudes and Intentions to Behave

The purpose of this experiment is to examine how outcome information affects individual ethical attitudes and intentions to behave. In the present study, a scenario manager employs revenue manipulation by prematurely forcing a product through distribution channels. This investigation employs a 1 × 3...

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Bibliographic Details
Published in:Behavioral research in accounting 2019-09, Vol.31 (2), p.1-15
Main Authors: Fleischman, Gary M., Valentine, Sean R.
Format: Article
Language:English
Subjects:
Behavior
Cognition & reasoning
Distribution
Ethics
International Financial Reporting Standards
Managers
Revenue
Revenue recognition
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Summary:The purpose of this experiment is to examine how outcome information affects individual ethical attitudes and intentions to behave. In the present study, a scenario manager employs revenue manipulation by prematurely forcing a product through distribution channels. This investigation employs a 1 × 3 between-subjects and randomized experimental design where the scenario manager's unethical behavior is associated with three behavior-based organizational outcomes: favorable, moderately unfavorable, and unfavorable. We model individual ethical reasoning using the expanded Theory of Reasoned Action. Our findings suggest that the theory provides an appropriate and parsimonious fit for modeling individual ethical reasoning in the channel stuffing context. Specifically, we also find that as organizational outcomes of the scenario manager's coercive behavior shift from unfavorable to favorable, participants judge unethical behavior less harshly, a concerning finding for regulators and policymakers. These findings have significant implications for new revenue recognition standards, such as IFRS 15 and ASC 606. Data Availability: Data available upon request. Please contact the authors.
ISSN:1050-4753
1558-8009
DOI:10.2308/bria-52273