ABSTRACT To what extent does the provision of feedback moderate the relation between target achievability and people's effort? We addressed this research question by conducting an experiment using an eye‐tracking device. We hypothesized and found that people exerted more effort after receiving feedback combined with stretch targets, whereas they exerted less effort when feedback was combined with easy targets. Furthermore, without feedback, people with stretch targets exerted less effort than those with easy targets. The results indicate that stretch targets are more demotivating than easy targets when people do not know where they stand with respect to achieving the targets. We extend prior work by using eye‐tracking devices to measure effort, specifically by timing how long participants fixated on the tasks. This study advances behavioral accounting research by providing a method to observe which financial cues capture decision‐makers' attention. Our use of eye‐tracking technology enables researchers to measure visual focus and fixation duration to understand how individuals process accounting information. Finally, our research revealed that positive feedback on easy targets induces complacency and reduced effort, whereas negative feedback on stretch targets motivates people to exert more effort.
ABSTRACT This instructional case asks students to assess and communicate the financial performance of Ontario postsecondary institutions following the 2021 insolvency at Laurentian University, a publicly funded postsecondary institution in the province of Ontario, Canada. Students are provided with excerpts from a report by the Auditor General of Ontario on the insolvency crisis at Laurentian University, as well as publicly available financial data for the period 2014–2023 for 20 Ontario postsecondary institutions. Students are then tasked with performing and analyzing trend analysis for revenues, expenses, debt burden, and key financial metrics, including net operating revenue ratio, interest burden ratio, in‐year surplus, expendable net assets, and cash flows from operations. Deliverables include spreadsheet analysis, data visualization, and written communication about financial performance across multiple years in an Ontario postsecondary institution setting. The case is designed to meet big data and data analytic competencies according to the CPA Competency Map 2.0 and the CPA Professional Program Academic Guide.
ABSTRACT Effective January 1, 2027, IFRS 18 requires non‐GAAP financial measures (e.g., management‐defined performance measures) to be relocated from the unaudited management discussion and analysis (MD&A) to the audited notes of the financial statements. This change simultaneously alters the location of non‐GAAP financial measures (i.e., from the unaudited MD&A to the audited notes of the financial statements) and extends the requirement for audit of non‐GAAP financial measures. We use an experiment to examine the effect of this new accounting standard on users with varying levels of financial expertise. We find that reliance varies with the level of financial expertise such that “lower‐expertise” users rely less on non‐GAAP financial measures when they are relocated to the audited notes of the financial statements, whereas “higher‐expertise” users' reliance does not significantly change. Our findings suggest that the decreased reliance on non‐GAAP financial measures by lower‐expertise users is consistent with the lower availability of non‐GAAP financial measures and higher information processing costs when these are relocated to the audited notes of the financial statements. However, this does not appear to similarly influence higher‐expertise users. Implications for accounting standard setters, regulators, and research are presented in the paper.
ABSTRACT This study examines the effectiveness of two types of management controls in a remote work setting. Because remote employees work outside the traditional office environment, components of conventional management control systems that effectively direct in‐office employees toward organizational objectives may be less effective for remote employees, potentially impairing effort. Using an experimental study with a real‐effort task, we examine the effects of relative performance information (RPI, absent vs. present) and cultural controls (absent vs. present) on remote employees' effort. We first confirm that in the absence of management controls, effort is lower for remote employees than in‐office employees. This finding establishes the existence of an inherent management control problem with respect to remote employees' effort. We then find that both RPI and cultural controls (i.e., controls that shape values, beliefs, and norms) increase the effort of remote employees when used independently. Furthermore, we find that in a remote work setting, RPI and cultural controls do not significantly interact in a complementary or supplementary manner, suggesting that they can be used as substitutes to increase the effort of remote employees. Our study extends existing research by examining how RPI, a management control commonly studied in traditional office settings, interacts with cultural controls to influence remote employees' effort.
ABSTRACT This CPA‐style case focuses on Atlantica Cinemas, an independent cinema chain operating in Atlantic Canada. Students are called upon to draft an audit planning memo that considers the nature of the company's operations, structure, and ownership. Several key financial reporting issues are also explored. This case is designed for capstone or early graduate‐level courses, as well as later portions of undergraduate audit and assurance courses where students have experience with financial reporting and assurance topics.
