Conjunctive Explanations in Cost Variance Investigation: Experimental Replications and Extensions |
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Authors: | PETER CHALOS |
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Institution: | Peter;Chalos is an Associate Professor in the Department of Accounting at the University of Illinois —Chicago. |
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Abstract: | This study examined conjunctive explanations of cost variances. Two experiments were conducted in order to examine the effect of conjunctive or joint explanatory variables upon cost variance investigation decisions. These variables included the representativeness of the hypothesized explanatory variables; the inter-causality that existed between the explanatory factors; the perceived rarity of the explanation; and the multiplicity of explanatory variables related to the variance under investigation. Experiment 1 indicated significant main effects and insignificant interaction effects for representativeness and inter-causality upon investigation judgments. Experiment 2 revealed no significant effect for event rarity but a significant effect for multiplicity of explanatory factors. The results suggest that certain characteristics of conjunctive explanations do affect cost variance investigation decisions. |
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Keywords: | Costs Heuristic Variance analysis |
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