Honesty in Accounting & Control: A Discussion of Hannan, Rankin and Towry

23 Pages Posted: 19 May 2006

See all articles by Alan Webb

Alan Webb

University of Waterloo - School of Accounting and Finance

Steven Salterio

Queen's University - Smith School of Business

Date Written: May 19, 2006

Abstract

We provide a discussion of Hannan, Rankin and Towry (HRT) (2006) The effect of information systems on honesty in managerial reporting: A behavioral perspective. Some agency theorists have suggested that while individuals have some preference for honesty, their honesty threshold is so low that they would lie for very small payoffs. HRT's results showing a significant preference for honesty raise questions about agency theory's boundary conditions. Our discussion: provides an overview of findings on honesty and lying from the organizational research literature; summarizes management control systems research on the prevention and detection of lying; critically evaluates several aspects of HRT's predictions, design and results; and generates possible directions for future research.

Keywords: management control systems, honesty, lying, agency theory

JEL Classification: M40, M46, M54

Suggested Citation

Webb, Alan and Salterio, Steven E., Honesty in Accounting & Control: A Discussion of Hannan, Rankin and Towry (May 19, 2006). Available at SSRN: https://ssrn.com/abstract=903421 or http://dx.doi.org/10.2139/ssrn.903421

Alan Webb (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

Steven E. Salterio

Queen's University - Smith School of Business ( email )

Kingston, Ontario K7L 3N6
Canada
613-533-6926 (Phone)

HOME PAGE: http://smith.queensu.ca/faculty_and_research/faculty_list/salterio-steven.php

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