A Comparative Analysis of Investor and Auditor Materiality Judgments

2018 ◽  
Vol 38 (3) ◽  
pp. 149-166 ◽  
Author(s):  
F. Todd DeZoort ◽  
Travis P. Holt ◽  
Jonathan D. Stanley
Keyword(s):  
Decision Making ◽  
Comparative Analysis ◽  
Empirical Evidence ◽  
Professional Standards ◽  
Policy Capturing ◽  
Cue Utilization ◽  
Critical Domain ◽  
Extant Literature

SUMMARY Materiality remains a challenging concept for auditors to implement in practice. The challenges underlying auditor materiality assessments are compounded by the fact that courts, regulation, and professional standards emphasize that materiality should be based on a “reasonable investor” perspective. Despite the investor orientation and ambiguous nature of the “reasonable investor” criterion, the extant literature lacks empirical evidence about investor materiality judgments and decision-making. To address this problem, we model sophisticated and unsophisticated investors' materiality judgments in a policy-capturing study and compare them to experienced auditors charged with assessing materiality from an investor perspective. The results indicate significant differences in materiality judgments, judgment consensus, and cue utilization among the three participant groups. We conclude the paper with discussion of the study's implications, highlighting that the overall results suggest the need for further consideration of ways to help auditors meet standards and expectations in this critical domain.

scholarly journals Listening to the Heart or the Head? Exploring the “Willingness Versus Ability” Succession Dilemma

2019 ◽  
Vol 32 (4) ◽  
pp. 330-353 ◽  
Author(s):  
Melanie Richards ◽  
Nadine Kammerlander ◽  
Thomas Zellweger
Keyword(s):  
Decision Making ◽  
Family Member ◽  
Family Firms ◽  
Institutional Logics ◽  
Family Firm ◽  
Policy Capturing ◽  
Firm Level ◽  
Extant Literature ◽  
Personal Experiences ◽  
Cultural Embeddedness

Incumbents typically seek a highly committed and at the same time highly competent child as a successor, yet such a candidate is often not available. Extant literature is unable to predict which desired attribute—commitment (i.e., willingness) or competence (i.e., ability)—is most important in this dilemma. Drawing from institutional logics literature, we suggest that the incumbent’s personal experiences, education, and cultural embeddedness, as much as firm-level situational stimuli, direct incumbent attention to either corporate logic, favoring competence, or family logic, favoring commitment, to guide decision-making about which family member to choose as a successor. We test our hypotheses using policy capturing with responses of 1,060 family firm owner-managers, and contribute to research on succession, family firms, and institutional logics.

Managerial Influence in Performance Measurement System Design: A Recipe for Failure?

2014 ◽  
Vol 26 (2) ◽  
pp. 1-34 ◽  
Author(s):  
Anne-Marie Kruis ◽  
Sally K. Widener
Keyword(s):  
Decision Making ◽  
Performance Measurement ◽  
Information Asymmetry ◽  
System Design ◽  
Empirical Evidence ◽  
Survey Data ◽  
Measurement System ◽  
Performance Measurement System ◽  
Business Unit ◽  
Extant Literature

ABSTRACT: Extant literature holds that business unit (BU) managers' influence in the design of their performance measurement system (PMS) is beneficial; however, empirical evidence is mixed. Using survey data from 293 BU managers, we study their perception that the PMS fails to support their decision-making. The findings indicate that, on average, managerial influence in PMS design decreases the perception of PMS failure and hence indeed seems to be beneficial. However, importantly, the effect differs depending on the situation. For instance, when there are higher levels of information asymmetry between managers and superiors, lower levels of interdependencies, or lower levels of information asymmetry between employees and managers, managerial influence in PMS design decreases failure. To the contrary, when there are lower levels of information asymmetry between managers and superiors, higher levels of interdependencies, or higher levels of information asymmetry between employees and managers, influence in PMS design increases PMS failure.

Six concerns about internet data: A comparative analysis of the empirical evidence

2004 ◽  
Author(s):  
Samuel D. Gosling ◽  
Simine Vazire ◽  
Sanjay Srivastava ◽  
Oliver P. John
Keyword(s):  
Comparative Analysis ◽  
Empirical Evidence

Minimizing Missed Opportunities: Modeling Relationships between the State and Business in Russia

2009 ◽  
pp. 42-61
Author(s):  
A. Oleynik
Keyword(s):  
Decision Making ◽  
Empirical Evidence ◽  
Common Good ◽  
The State ◽  
Power Relationships ◽  
Individual Decision ◽  
Missed Opportunities ◽  
Power Domination ◽  
Individual Decision Making ◽  
Optimal Outcomes

Power involves a number of models of choice: maximizing, satisficing, coercion, and minimizing missed opportunities. The latter is explored in detail and linked to a particular type of power, domination by virtue of a constellation of interests. It is shown that domination by virtue of a constellation of interests calls for justification through references to a common good, i.e. a rent to be shared between Principal and Agent. Two sources of sub-optimal outcomes are compared: individual decision-making and interactions. Interactions organized in the form of power relationships lead to sub-optimal outcomes for at least one side, Agent. Some empirical evidence from Russia is provided for illustrative purposes.

Bid rigging in public procurement market according to the decisions of the President of the Office of Competition and Consumer Protection

2018 ◽  
Vol 5 (2) ◽  
pp. 161
Author(s):  
Konrad RÓŻOWICZ
Keyword(s):  
Decision Making ◽  
Comparative Analysis ◽  
Consumer Protection ◽  
Design Research ◽  
Public Procurement ◽  
Appeal Chamber ◽  
Interesting Issue ◽  
Market Control ◽  
The Public ◽  
Bid Rigging

Aim: In the practice of awarding public contracts, sometimes the behavior of market actors, instead of competing with other entities, are aimed at illegal cooperation, including bid rigging. The above shows that healthy competition is not possible without efficient market control. In public procurement market this control is, primarily, carried out by public procurement entities: the President of the Public Procurement Office (Prezes UZP) and the National Appeal Chamber (KIO), and furthermore by President od the Office of Competition (Prezes UOKiK) and Consumer Protection and the Court od Competition and Consumer Protection. and Consumer Protection (SOKiK). The interesting issue is how the activities of the President of Office of Competition and Consumer Protection targeted  to contend with bid rigging affects on the activities of President of the Public Procurement Office (Prezes UZP) or the National Appeal Chamber (KIO). Design / Research methods: analysis and comparison decisions/ judgment issued by the President of the Public Procurement Office, National Appeal Chamber, the President of  the Office of Competition and Consumer Protection and the Court of Competition and Consumer Protection. Conclusions: The analysis has shown that the existence of specificities in the activities of the decision-making bodies and the judgments examined. However, in keeping with the specificity of the forms and objectives of control, these entities should cooperate, to a greater extent than before. Expanding the scope of cooperation would make it possible to better contend with bid rigging without changing the competition protection model. The introduction of institutionalized instruments for cooperation between the authorities seems to be valuable in terms of system solutions. Value of the article: The main value of the article is the comparison of selectively selected decisions and judgments representative of the problem under consideration and their comparative analysis in order to achieve the research objectives. The article deals with issues relevant to both public procurement practitioners and the state bodies dealing with procurement matters.

Is the Deductive Falsification Approach a Better Basis for Clinical Trial Appraisal?

2019 ◽  
Vol 14 (3) ◽  
pp. 224-228
Author(s):  
Steffen Mickenautsch
Keyword(s):  
Clinical Trial ◽  
Decision Making ◽  
Empirical Evidence ◽  
Clinical Decision Making ◽  
Inductive Reasoning ◽  
Clinical Decision ◽  
Future Trial ◽  
Grading Systems ◽  
Component Scores ◽  
Current Clinical Trial

Background: Inductive reasoning relies on an infinite regress without sufficient factual basis and verification is at any time vulnerable to single contrary observation. Thus, appraisal based on inductive verification, as applied in current clinical trial appraisal scales, checklists or grading systems, cannot prove or justify trial validity. Discussion: Trial appraisal based on deductive falsification can identify invalid trials and give evidence for the recommendation to exclude these from clinical decision-making. Such appraisal remains agnostic towards corroborated trials that pass all appraisal criteria. The results of corroborated trials cannot be considered more robust than falsified trials since nothing within a particular set of complied trial criteria can give certainty for trial compliance with any other appraisal criterion in future. A corroborated trial may or may not reflect therapeutic truth and may thus be the basis for clinical guidance, pending results of any future trial re-appraisal. Conclusion: Trial grading following appraisal based on deductive falsification should be binary (0 = Invalid or 1 = Unclear) and single component scores should be multiplied. Appraisal criteria for the judgment of trial characteristics require a clear rationale, quantification of such rationale and empirical evidence concerning the effect of trial characteristics on trial results.

scholarly journals Skill and strategic control

Synthese ◽  
2021 ◽  
Author(s):  
Ellen Fridland
Keyword(s):  
Decision Making ◽  
Empirical Evidence ◽  
Mental Imagery ◽  
Sports Psychology ◽  
Mental Practice ◽  
Strategic Control ◽  
Cognitive Representations ◽  
Personal Level ◽  
The Right ◽  
Better Than

AbstractThis paper provides an account of the strategic control involved in skilled action. When I discuss strategic control, I have in mind the practical goals, plans, and strategies that skilled agents use in order to specify, structure, and organize their skilled actions, which they have learned through practice. The idea is that skilled agents are better than novices not only at implementing the intentions that they have but also at forming the right intentions. More specifically, skilled agents are able formulate and modify, adjust and adapt their practical intentions in ways that are appropriate, effective, and flexible given their overall goals. Further, to specify the kind of action plans that are involved in strategic control, I’ll rely on empirical evidence concerning mental practice and mental imagery from sports psychology as well as evidence highlighting the systematic differences in the cognitive representations of skills between experts and non-experts. I’ll claim that, together, this evidence suggests that the intentions that structure skilled actions are practical and not theoretical, that is, that they are perceptual and motor and not abstract, amodal, or linguistic. Importantly, despite their grounded nature, these plans are still personal-level, deliberate, rational states. That is, the practical intentions used to specify and structure skilled actions are best conceived of as higher-order, motor-modal structures, which can be manipulated and used by the agent for the purpose of reasoning, deliberation, decision-making and, of course, the actual online structuring and organizing of action.

scholarly journals Public health decisions in the COVID-19 pandemic require more than ‘follow the science’

2021 ◽  
pp. medethics-2020-107134
Author(s):  
Thana Cristina de Campos-Rudinsky ◽  
Eduardo Undurraga
Keyword(s):  
Public Health ◽  
Decision Making ◽  
Health Policy ◽  
Empirical Evidence ◽  
Empirical Data ◽  
Public Health Policy ◽  
Scientific Evidence ◽  
Ethical Reasoning ◽  
Reliable Data ◽  
Good Decision

Although empirical evidence may provide a much desired sense of certainty amidst a pandemic characterised by uncertainty, the vast gamut of available COVID-19 data, including misinformation, has instead increased confusion and distrust in authorities’ decisions. One key lesson we have been gradually learning from the COVID-19 pandemic is that the availability of empirical data and scientific evidence alone do not automatically lead to good decisions. Good decision-making in public health policy, this paper argues, does depend on the availability of reliable data and rigorous analyses, but depends above all on sound ethical reasoning that ascribes value and normative judgement to empirical facts.

scholarly journals Approaches for multicriteria decision-making based on the hesitant fuzzy best–worst method

2021 ◽  
Author(s):  
Jian Li ◽  
Li-li Niu ◽  
Qiongxia Chen ◽  
Zhong-xing Wang
Keyword(s):  
Decision Making ◽  
Comparative Analysis ◽  
Programming Model ◽  
Multicriteria Decision Making ◽  
Decision Makers ◽  
Multicriteria Decision ◽  
Preference Relations ◽  
Fuzzy Preference Relations ◽  
Decision Making Models ◽  
Best Worst Method

AbstractHesitant fuzzy preference relations (HFPRs) have been widely applied in multicriteria decision-making (MCDM) for their ability to efficiently express hesitant information. To address the situation where HFPRs are necessary, this paper develops several decision-making models integrating HFPRs with the best worst method (BWM). First, consistency measures from the perspectives of additive/multiplicative consistent hesitant fuzzy best worst preference relations (HFBWPRs) are introduced. Second, several decision-making models are developed in view of the proposed additive/multiplicatively consistent HFBWPRs. The main characteristic of the constructed models is that they consider all the values included in the HFBWPRs and consider the same and different compromise limit constraints. Third, an absolute programming model is developed to obtain the decision-makers’ objective weights utilizing the information of optimal priority weight vectors and provides the calculation of decision-makers’ comprehensive weights. Finally, a framework of the MCDM procedure based on hesitant fuzzy BWM is introduced, and an illustrative example in conjunction with comparative analysis is provided to demonstrate the feasibility and efficiency of the proposed models.

Comparing Two Decision Support Modes Using the Cognitive Shadow Online Policy-Capturing System

2020 ◽  
Vol 64 (1) ◽  
pp. 1125-1129
Author(s):  
Katherine Labonté ◽  
Daniel Lafond ◽  
Aren Hunter ◽  
Heather F. Neyedli ◽  
Sébastien Tremblay
Keyword(s):  
Decision Making ◽  
Decision Support ◽  
Response Pattern ◽  
Policy Capturing ◽  
Model Accuracy ◽  
Prototype Tool ◽  
Human Operators ◽  
Support Decision Making ◽  
Threat Evaluation

The Cognitive Shadow is a prototype tool intended to support decision making by autonomously modeling human operators’ response pattern and providing online notifications to the operators about the decision they are expected to make in new situations. Since the system can be configured either in a reactive “shadowing” or a proactive “recommendation” mode, this study aimed to determine its most effective mode in terms of human and model accuracy, workload, and trust. Subjects participated in an aircraft threat evaluation simulation without decision support or while using either mode of the Cognitive Shadow. Whereas the recommendation mode had no advantage over the control condition, the shadowing mode led to higher human and model accuracy. These benefits were maintained even when the tool was unexpectedly removed. Neither mode influenced workload, and the initial lower trust rating in the shadowing mode faded quickly, making it the best overall configuration for the cognitive assistant.

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