We investigate the relationship between the dark triad personality traits (Machiavellianism, narcissism, and psychopathy) of managers and the practice of reporting manipulation using a primary survey of 837 professionals working in accounting and finance departments. We find that (a) managers who exhibit dark personality traits are associated with a higher prevalence of fraudulent accounting practices in their accounting and finance departments and (b) traditional risk management mechanisms are only partially effective in mitigating this effect. Internal audits are effective in curtailing (...) the negative behavior of managers with dark triad traits only if these internal audits are outsourced and performed by independent external personnel but not if they are conducted by internal personnel. This suggests that managers with dark triad traits are able to manipulate other employees quite effectively. Consequently, having external personnel perform the auditing task provides a safeguard against such unethical practices and manipulation. This finding has strong practical implications, as it provides support for outsourcing internal audits rather than keeping them in-house. (shrink)

This study examined how protection motivation intention and other cognitive appraisal processes influence the relationship between compliance and value-oriented ethics programs and employees’ unethical behavior. A total of 342 employees from various government and private organizations in Bangladesh participated in the study. The PLS-SEM results revealed that perceived vulnerability, perceived cost, and protection motivation intention have significant relationships with employees’ unethical behavior. However, perceived self-efficacy did not show a significant relationship with unethical behavior. The study also identified that cognitive appraisal (...) processes (perceived vulnerability, self-efficacy, and response cost) mediate the relationship between compliance and value-oriented ethics programs and protection motivation intention. Additionally, protection motivation intention was found to mediate the relationship between cognitive appraisal processes and employees’ unethical behavior. Furthermore, the study revealed that accountants and auditors exhibit stronger protection motivation intention to comply with ethics programs compared to other employees. Based on these findings, the study suggests that both academics and practitioners should emphasize the importance of protection motivation intention as a cognitive process when designing ethics programs aimed at preventing unethical behavior in the workplace. (shrink)

This paper investigates whether and how the disclosure tone of earnings conference calls predicts future stock price crash risk. Using US public firms’ conference call transcripts from 2010 to 2015, we find that firms with less optimistic tone of year-end conference calls experience higher stock price crash risk in the following year. Additional analyses reveal that the predictive power of tone is more pronounced among firms with better information environment and lower managerial equity incentives, suggesting that extrinsic motivations for truthful (...) disclosure partially explain the predictive power of conference call tone. Our results shed light on the long-term information role of conference call tone by exploring the setting of extreme future downside risk, when managers have conflicting incentives either to unethically manipulate disclosure tone to hide bad news or to engage in ethical and truthful communication. (shrink)

Despite attempts to encourage whistleblowing, lingering reluctance to report questionable acts remains frustratingly apparent. Our objective is to examine the regret a professional anticipates when evaluating the action of reporting or not reporting, and whether the framing of the action influences regret. Responses from 263 professionals indicate that regret depends on the moral intensity of the situation and how the action is framed. Regret for whistleblowing is not comparable to regret for not remaining silent, despite the fact that these two (...) descriptions result in the same action. This important implication may inform the way we educate and encourage whistleblowing. (shrink)

In this paper, we take a framing perspective to corporate environmental irresponsibility and focus it on the community of place as one among the most affected, yet rarely examined, stakeholders. In particular, we take a framing microprocess perspective, to study how interactions within a community of place affect a mobilization after corporate environmental irresponsibility. We elicit two framing microprocess, losses display and scale augmentation, and show how they significantly, though differently, affect a mobilization. In so doing, we enrich our understanding (...) of how communities of place mobilize, the types of, and venues, where interactions take place in a community of place—and how these affect a mobilization. (shrink)