Testing a Model of Cognitive Budgetary Participation Processes in a Latent Variable Structural Equations Framework

Previous accounting research has suggested that subordinate participation in the budgetary process has two cognitive aspects: (1) participation enhances budget quality, and hence the utility of budgets, by allowing subordinates to introduce private knowledge into the budgetary process, and (2) participation enables subordinates to obtain information that is relevant to performing their jobs. This study tests a model that encompasses both cognitive aspects of budgetary participation. Data were gathered with a questionnaire distributed to managers from a variety of different national origins who were working in many different global locations. The data were analysed with latent variable structural equation modelling, which provides several advantages over more conventional analytic methods generally used in budgetary participation and other behavioural accounting research. The results indicated that participation enhances budget quality and that budget quality, in turn, has a positive effect on budget utility. Participation was also found to have a direct and positive effect on job-relevant information. The results failed to support a proposed indirect effect of participation on job-relevant information through the enhancement of budget quality.     

The interactive effect of budgetary participation and budget favorability on attitudes toward budgetary decision makers: A research note

Referent cognitions theory predicts that employees who receive unfavorable budgets will have less negative attitudes toward budgetary decision makers if they participated in the budgetary process than if they did not participate. Questionnaire data from international managers were analyzed with regression to test for this predicted interaction between budgetary participation and budgetary outcome favorability. The results indicated that budgetary participation and budget favorability had the predicted interactive effect on the managers' attitudes toward their supervisor and their organization.     

Evidence on the relationship between procedural and distributive justice in performance appraisal and accounting faculty attitudes and performance

This study examined the relationship between procedural and distributive justice in performance appraisal and accounting faculty attitudes and performance. Data were gathered with a mail survey of nonadministrative accounting faculty at U.S. colleges and universities and analyzed with regression analysis. Procedural justice was more strongly associated with commitment to the institution, trust in department head, and intent to stay with the institution than was distributive justice. Conversely, distributive justice was more strongly associated with performance. We discuss the implications of our results to persons responsible for performance appraisal of accounting faculty and to researchers.     

Heuristics in Mutual Fund Consumers' Willingness‐to‐Invest: An Experimental Approach

This paper improves the understanding of heuristics in the choice of mutual funds. We analyze the effect of price‐quality relationship and anchors as heuristics on the evaluation of the willingness‐to‐invest. We perform two studies with graduate students who possess a medium–high level of financial literacy in Chile. In the first study, we find that willingness‐to‐invest increases (decreases) when subjects observe (do not observe) in the market a positive relationship between expense ratios (price) and service quality. In the second study, in the presence of an anchor, the reference price obtained by individuals from the market information loses relevance and the anchor effect predominates. Our results confirm that participants, as consumers of financial services, apply heuristics as groundwork for their investment decisions. These heuristics as a decision making process are useful but do not always lead to the choice of the lowest cost alternative with the highest possible service quality.     

Reversing the Question: On What Does the Turnover of Mutual Funds Depend? Evidence from Equity Mutual Funds in Chile

Abstract:

The purpose of this research is to study the factors that influence portfolio turnover in equity mutual funds in Chile. The main result of this research indicates that turnover is related to a combination of variables associated with efficiency, and with behavioral and agency problem hypotheses. In addition, negative effects of turnover are observed on the returns from the funds; positive effects are observed on portfolio liquidity. This study should be of interest to policymakers who regulate and monitor the delegated portfolio management industry in developing countries, as well as individual and institutionalinvestors concerned about the efficiency and performance of their investments.