It may be urgent,but is it important? A look at how employees evaluate their emails

This paper presents the results of a study designed to identify the cues employees use to identify an email as important and/or urgent. Taking an emic perspective, a qualitative research methodology is used to analyze interview responses from knowledge workers. Our findings support the notion that employees use strategies similar to those encapsulated in Mitchell et al.’s (1997) operationalization of stakeholder salience when evaluating an email's importance and/or urgency. Results from this study can be used to design email policies to support knowledge worker performance.     

Supervisors' overtime hours,abusive supervision and leader–member exchange: How supervisors' long work hours harm their relationships with subordinates

The current research examines the consequences of supervisors' overtime hours on subordinates. Drawing upon the stressor-emotion model of counterproductive behaviors, we argue that supervisors' overtime hours positively relate to abusive supervision behaviors through negative emotions, which in turn undermine leader–member exchange relationships. We further posit that this process is exacerbated among subordinates with a strong relational self-concept. Multisource multilevel data collected from an organizational sample of 181 employees and longitudinal data from 416 employees from multiple organizations support our predictions. This research indicates that the consequences of working overtime extend beyond supervisors, as subordinates may be negatively affected when their supervisors work long hours. We discuss implications for both theory and practice.     

Herbal Pharma Inc.: Conducting an Effective Group Audit*

As the relative weight of global economic activity continues to shift toward non-OECD countries (OECD 2018), audit firms are more likely to encounter clients with significant business operations in foreign jurisdictions. The associated need to engage and oversee local component auditors in these jurisdictions can lead to challenges arising from different business cultures and the resulting intra-audit miscommunications. Audit deficiencies related to these challenges have been detected by regulators (PCAOB 2011, 2010; CPAB 2012, 2015). Standard setters such as the IAASB and the Auditing and Assurance Standards Board (AASB) have responded by issuing an exposure draft proposing revisions to ISA 600 (IAASB 2020) and CAS 600 (AASB 2020) to strengthen the auditor's approach and provide enhanced guidance to practitioners. In light of this evolving area of assurance, this case was developed to deepen students' understanding of both group and component audits in an international context. The case takes the perspective of the group auditor and features an audit senior in a specialized role overseeing the component audit of a client's increasingly material Chinese subsidiary. Deficiencies in the prior year component audit, along with a change in the component auditor, further underlines the importance of robust risk analysis for the upcoming engagement.     

Sanders Foods: Planning for Success—An Instructional Case*

This case describes the second-generation importer Sanders Foods, which requires improved profitability. A new CFO has been hired to improve profits and thereby increase the market value of the firm for a possible future sale. The firm's strategy, although still completely valid, has not been carried out as intended. The board of directors has reaffirmed the firm's strategy. The CFO and CEO have developed a five-year plan to implement the strategy; the plan has been approved by the board. The task for the CFO is to develop a bottom-up budget for next year that accomplishes the first year of the plan. The operational improvements to achieve the existing strategy with the next year's budget will be demanding, which means it will likely need to be frequently updated with forecasts. Students will be tested on their knowledge and skills in implementing a committed budget, complete with a process for forecasts.     

A Simple Approach to Better Distinguish Real Earnings Manipulation from Strategy Changes*

Researchers typically infer real earnings management when a firm's operating and investing activities differ from industry norms. A significant problem with classifying deviations from industry averages as myopic earnings management is that companies can change their operating and investing decisions for strategic business reasons rather than to mislead stakeholders. Using principal components analysis, we systematically evaluate existing measures and develop a comprehensive real activities measure to better capture earnings manipulation. Our measure reflects (i) deviations from industry averages across multiple activities and (ii) other signals of manipulation. This approach is promising because, although there are many sources of abnormal activities, manipulation is more likely the cause when managers engage in multiple income-increasing abnormal activities that coincide with other signals that indicate an elevated risk of manipulation. This simple approach results in a metric that associates negatively with future operating performance and earnings persistence, yields high-power tests, and captures manipulation reasonably well across most life-cycle stages. Importantly, this approach performs better than the standard real earnings management metrics across all dimensions. Specifically, it generates the expected reduction in future earnings and reduced earnings persistence in 82% of the tests compared to 36% and 46% in common alternatives. Also, because this innovation does not require a long time-series or rely on future period realizations for classification, it can be useful in more research settings than other recent innovations in the literature.     

Empoderamiento colectivo de los trabajadores en las redes de producción globalizadas: análisis retrospectivo de una oportunidad fallida

En este artículo se examina la capacidad de las ONG para empoderar colectivamente a los trabajadores en las redes de producción globalizadas, ejerciendo presión sobre las multinacionales para poner en marcha programas de elección de comités de empresa en las fábricas. La investigación empírica realizada entre 2012 y 2019 en el sur de China muestra que se logró movilizar a los trabajadores y potenciar su capacidad de acción, pero la continuidad de los programas se vio frustrada por la desigualdad estructural del sistema productivo, la falta de protección institucional de los representantes electos y el endurecimiento del régimen.     

Volatility of Tax Payments and Dividend Payouts*

Dividends are a key mechanism for shareholders to discipline managers and mitigate agency conflicts. This study examines whether the volatility of tax payments is associated with dividend payouts. Consistent with the predictions, results suggest that firms with more volatile tax payments are less likely to pay dividends overall and their dividends are lower in magnitude when doing so. These effects are economically significant and incremental to a firm's operating risk. The link between volatile tax payments and the likelihood of dividend payouts is weaker for firms that distribute dividends to alleviate agency conflicts. Similarly, the link between volatile tax payments and the amount of dividend payouts is weaker for firms that hold more cash for tax reasons. Taken together, these findings add to our understanding of the economic consequences of volatile tax payments and the determinants of dividend payouts.     

Exploring the Impacts of the COVID-19 Pandemic on Productivity: A Study of Accounting Faculty Who Are Caregivers of Children*

This study explores how the COVID-19 pandemic affected the productivity of accounting faculty who identify as caregivers of children. We examine the effects on caregivers of children because of the significant shift in the family-work interface that resulted from remote working and learning. We draw on existing family-work conflict research to develop four hypotheses that explore why the productivity of accounting faculty who are caregivers of children might be affected differently during the pandemic than that of accounting faculty who are non-caregivers of children. We surveyed accounting faculty primarily across Canada and the United States. We find that accounting faculty caring for children during the pandemic experienced reduced research, teaching, and service productivity because of increased family-work conflict and depletion. We supplement our main findings with an analysis of open-ended questions to further understand productivity changes and supports for research, teaching, and service. Our study contributes to research examining family-work conflict, employee productivity, and the accounting profession by making practical recommendations for providing targeted support for caregivers of children during times of crisis.     

The Effect of Changes in Income Shifting on Affiliate Managers' Internal Reporting Decisions*†

This study examines the interplay between tax and internal reporting incentives among affiliates of multinational corporations (MNCs). MNCs face limited information flows that may prevent affiliates' performance metrics to be responsive immediately to changes in the firm's tax planning. Using granular data of affiliates belonging to MNCs from 21 European countries, our study provides new empirical evidence of affiliate internal reporting responses induced by changing tax plans. When high-tax-rate countries tighten income shifting rules, we first document that income shifting is reduced and low-tax-rate affiliates have less income. Second, we predict and document that managers of these low-tax-rate affiliates offset this decrease in profits by managing upwards a key performance metric: affiliate earnings. Our results are consistent with firms not quickly adjusting the affiliate managers' incentives in the face of changing tax planning strategies, and affiliates managing reported earnings to offset the effect of changes in the tax planning of the firm. Cross-sectional analyses provide further evidence consistent with the theory underlying the main tests. The results support the policy of tightening income shifting rules when the objective is to reduce income shifting, and firms' central management would benefit from considering the implications of changing tax plans on the assessment of local managers.