In this thesis, the attributional forms in accounting narrations and the function of feeling direction have been investigated, sing the inside informations of the organisational environment in which attributional behavior occurs for Dutch AEX listed companies sing the old ages 1998, 2001, 2006 and 2008, which have been referred as “ good ” and “ bad ” economic fortunes sing the capital market context. Different theories explicating directors ‘ motivations to prosecute in feeling direction have been discussed. The footing of organisational discourse is in theory supported by the perceptual experience of self-seeking ascriptions, which is a peculiar illustration of causal concluding which makes it possible for the preparer to take recognition for favorable intelligence and avoid duty for unfavorable intelligence. This inclination is known as the self-seeking attributional prejudice. Within the societal psychological science, the ascription theory is concerned with the survey of accounts people give for events. This phenomenon besides applies for directors of companies, since the direction is responsible for accounts for its determinations and actions against internal and external stakeholders. Several surveies document a consistent dissymmetry in the ascriptions directors make for their concern public presentation. Based on different motives for feeling direction happenings, like the motivational and informational accounts, parts are added to this research from signalling theory and bureau theory in order to develop hypotheses for the expected degrees of self-seeking ascriptions in the justification for organisational public presentation. Using this attack, different scenarios are examined in good and hapless economic fortunes. The consequences of this research are in line with the motivational theories which argue that self-seeking ascriptions arise from ego-defensive rationalisations. Attributions as to the causes of public presentation might function a self-presentational map. They allow persons ( or corporations ) an chance to support or heighten their self-esteem. This means that on the one manus a successful result is attributed to internal factors, the so called “ self-enhancing prejudice ” , while on the other manus failures are attributed to external factors, the so called “ self-protecting prejudice ” .
Keywords: positive accounting theory, ascription theory, feeling direction, missive to the stockholders, bureau theory, signalling theory, informational and motivational accounts.
Foreword
As a portion of the maestro survey Accounting, Auditing & A ; Control at the Erasmus University, I have conducted this research to the attributional forms that might be looking in the one-year studies of the Dutch AEX listed companies. This maestro thesis is the concluding portion of my maestro survey. The authorship of this thesis was unluckily non so easy as that I hoped it would be. I have delayed the composing for many old ages, partially because of reverses and partially through many alterations that I have undergone in my personal life. This procedure seemed to hold no stoping. Ultimately, I have found the bravery and the motive to finalise this thesis.
The authorship of the thesis has taken a long clip and it would surely non hold been possible without support from exterior. Therefore, I would wish to thank all the people who straight or indirectly have been involved in the readying of my maestro thesis. I would wish to thank particularly some people for their great support through the old ages.
I would wish to show my particular thanks to mr. van Dongen for his valuable input and for steering and promoting me throughout this thesis procedure, counsel in the choice of the subject and for supplying the supervising support in the completion of this maestro thesis.
Additionally, I would wish to thank my beloved hubby Murat Aslan for his great support. Besides meriting thanks are my parents and my sisters. Without their support it would be really hard for me to finalise this thesis.
Wholly, composing this thesis was a great experience for me and it is a particular award to show and portion this experience with you.
I hope you enjoy reading.
Rotterdam, 25 February 2013
Hulya Ozcan
Table of Content
Abstract 2
Foreword 3
Chapter 1 Introduction 5
1.1 Introduction 5
1.2 Problem Statement 7
1.3 Research inquiry & A ; Sub inquiries 10
1.4 Hypothesis and Methodology 11
1.5 Data and Sample 13
1.6 Delineation of research and research attack 13
1.7 Relevance 17
1.8 Structure of thesis 17
Chapter 1 Introduction
1.1 Introduction
Companies are required by jurisprudence or other statute laws to publish each twelvemonth an one-year study. This one-year study can be seen as communicating medium, whereby the directors of the company service as a sender and the users of the one-year study ( such as stockholders ) serve as the receiving systems ( Gibbins et al. , 1992 ) . Stockholders, stakeholders and creditors are informed by the usage of the one-year study about the history of the company, the expected motions in the hereafter and the fiscal province of personal businesss ( Epstein and Pava, 1993 ; Courtis, 1995, 1998 ) . The readying of the one-year study has two key intents. First, it offers aid to ( likely ) investors in their pick whether they will put or non in a company. Second, the stockholders and stakeholders are given the chance to measure the direction ‘s stewardship of concern, by measuring how the direction uses its resources ( Beaver, 1998 ) . The one-year study contains accounting narrations. These accounting narrations are written parts, tabular arraies, graphs and other possible visual images.
Accounting narrations has a turning importance ( Clatworthy & A ; Jones, 2003 ) . They can be used for feeling direction intents ( Hooghiemstra, 2003 ) . There is much value attached to these narrations by the stockholders and other stakeholders. The complete public presentations and the associated accounting results in the period under reappraisal are expressed in these accounting narrations. Herein, besides the expected hereafter developments are included. Besides this, besides accounts are given for the complete public presentations in agencies of grounds, factors, causes and relationships. Besides, an apprehension is provided in other touchable variables that influences the consequences of the company, which are non recognized in the fiscal statements such as the quality of the direction, innovatory accomplishments and cognition assets. These factors are of import for investings determinations from stakeholders and stockholders.
Harmonizing to Scott ( 2003 ) , the more information included in the one-year study the better from the position of the stockholders and stakeholders. This reduces the opportunity that directors exhibit to opportunistic behaviors and take part in insider trading. When the information in the one-year study is presented in a utile and good accessible mode, it is easier for investors to establish their investings determinations on. While directors will offer their accounts, rationalisations and legitimation of its activities in such a manner that they affect the company ‘s public repute and image positively ( Pfeffer, 1981 ) , hearers are more focussed on the fiscal statements. The legal demands for the one-year study ( art. 2:391 BW ) are limited. It is required merely that the studies include a “ just position of the state of affairs on the balance sheet day of the month and the developments during the twelvemonth ” , and that “ proclamations were made about the province of personal businesss ” . Besides is prescribed that the one-year study should non conflict with the fiscal statements. However, there are no limitations imposed sing on how the consequences of the past twelvemonth are declared. Directors hence, have the chance to do usage of feeling direction and pull strings the position of the stockholders. Directors will do usage of this room for discretion because they are guided by their opportunism. It frequently happens that directors will be rewarded based on their achieved consequences. Therefore, they will be tended to warrant or procure their wages. Less attending will be paid to negative unfavorable consequences, while in contrast positive good consequences will be discussed every bit far as possible.
Hooghiemstra [ 2000, p. 60 ] provinces that feeling directions is “ a field of survey within societal psychological science analyzing how persons present themselves to others to be perceived favorably by others. ” This definition translated in describing context positions feeling direction as attempts to
“ control and pull strings the feeling conveyed to users of accounting information ” ( Clatworthy and Jones, 2001, p. 311 ) . Therefore, it is likely that directors make usage of feeling direction as a tool to “ strategicallyaˆ¦manipulate the perceptual experiences and determinations of stakeholders ” .
Most surveies that relates to the quality of studies have focused chiefly on net incomes direction ( e.g. Burgstahler and Eames, 2006 ] and fraud [ e.g. Rezaee, 2005 ) . There are fewer surveies that focusses on the use of feelings that others have, related to the public presentations achieved by companies. The content and presentation of the information is so subtly recorded, that it will “ falsify readers ” positions of the achieved achievements of the company ( Godfrey et al. , 2003, p. 96 ) . Whereas net incomes direction leads to better determination devising, by including relevant information about future hard currency flows, feeling direction leads to supposable capital misallocations [ Holthausen, 1990 ] .
In this thesis, the attributional forms in accounting narrations and the function of feeling direction sing the inside informations of the organisational environment in which attributional behavior occurs for Dutch AEX listed companies in a “ good ” and “ bad ” twelvemonth, will be investigated. Different theories explicating directors ‘ motivations to prosecute in feeling direction will be discussed.
1.2 Problem Statement
Harmonizing to Heider ( 1958 ) en Weiner ( 1985, 1986 ) , people could delegate events to internal factors such as expertness and committedness every bit good as external factors such as fortune or bad fortune. Prior research has illustrated that people shows a certain prejudice in giving accounts. They tend to take ascriptions that flatters them and put them in a good twenty-four hours visible radiation ( Heider, 1958 ) . This inclination is known as the self-seeking attributional prejudice. Within the societal psychological science, the ascription theory is concerned with the survey of accounts people give for events. This means that on the one manus a successful result is attributed to internal factors, the so called “ self-enhancing prejudice ” , while on the other manus failures are attributed to external factors, the so called “ self-protecting prejudice ” .
This phenomenon besides applies for directors of companies, since the direction is responsible for accounts for its determinations and actions against internal and external stakeholders. Several surveies document a consistent dissymmetry in the ascriptions directors make for their concern public presentation. In general, directors make internal ascriptions for desired results and external ascriptions for unsought results. In instance of positive fortunes the accounts by the direction for the positive consequences, might be referred or attributed to the effectivity of the company scheme.
One position is that self-seeking ascriptions arise from ego-defensive rationalisations ( Staw, 1980 ) . Attributions as to the causes of public presentation can function a self-presentational map. They allow persons ( or corporations ) an chance to support or heighten their self-esteem. Writers of several reappraisals have argued that recent research strongly supports this motivational account ( Bradley, 1978 ; Snyder, Stephan, and Rosenfield, 1978 ; Zuckerman, 1979 ) .
In an influential early analysis, nevertheless, Miller and Ross ( 1975 ) argued that self-seeking ascriptions might happen even when ego-defensiveness is non involved. The self-seeking ascriptions may be due to the nature of the information that is available or salient to the attributor and non due to ego-defensive motivations. The peculiar informational account used by Miller and Ross is based on the premiss that persons ( and presumptively organisations ) normally intend and expect to win and do programs that will take to success. Hence, if favorable results occur, they are attributed to internal causes. Similarly, unfavorable results are unexpected and unintended and are likely to be attributed to external causes.
Aerts ( 2005 ) emphasized an of import factor in his survey to the self-seeking ascriptions by directors. He emphasized the capital market environment as an of import variable to discern state of affairss of strong and weak motivational influences on the usage of self-seeking ascriptions ( Tessarolo, 2010 ) . Aerts ( 2005 ) argued that anterior surveies, which were concerned about this subject, have overstated the comparative importance of the informational account in their attempts to place the presence of colored tendencies of ascriptions. He argued that this state of affairs consequences from the fact that most anterior surveies did non see the inside informations of the societal and organisational environment in which attributional behavior occurs ( Aerts, 2005 ) . For illustration, increased answerability demands, caused by the capital market environment, and retrospective review of import background forces in finding motivational attributional behavior in listed companies ( Aerts, 2005 ) .
Hooghiemstra ( 2003 ) believes that in anterior research on this to another indispensable facet, viz. cultural differences, is unaddressed. His ideas are based on a pioneering survey conducted by Gray ( 1988 ) , in which is assumed that besides civilization, besides facets as corporate administration constructions, legal systems and capital market influences might impact the accounting patterns.
Although that the scientists agree that both motivational and informational factors influences self-seeking ascriptions, there is a dissension to which extent these factors applies.
In this thesis, both the accounts given for positive consequences and hapless consequences, as the environing economic environment in which the company find themselves will be considered. Specifically, there will be a twelvemonth examined, where the economic fortunes were good and a twelvemonth, where the economic fortunes were hapless. In this manner, the forms of ascription can be examined whether they correspond to what is expected as both informational as motivational factors are involved.
Both in a twelvemonth with positive and negative consequences, it is expected that a self-seeking form of ascriptions will happen. When the consequences are positive, this will be attributed to internal causes and negative consequences to external causes. In add-on, it can be assumed that in a twelvemonth where the economic fortunes are good, ascriptions will be made to internal causes. When the economic fortunes in a twelvemonth are hapless, more ascriptions will be made to external causes. An interaction of the economic fortunes with the consequences is expected ( Bettman and Weitz, 1998 ) .
There can be made several motivational and informational accounts for self-seeking ascriptions.
The principle behind such accounts is really of import to understand. Following Bettman and Weitz ( 1998 ) , for the rationalisation of informational accounts, Kelley ‘s ( 1971 ) attributional rules of discounting and augmentation will be used. When the consequences are negative in a twelvemonth with bad economic fortunes, the dissatisfactory public presentations will be assigned to many possible external grounds. However, when the consequences are negative in a twelvemonth with good economic fortunes, there are fewer possible external grounds where the dissatisfactory public presentations can be assigned to. Kelly ( 1971 ) states that the function of internal causes would be judged to be greater. This is the alleged augmentation rule. Therefore, it can be assumed that more ascriptions are assigned to external factors in a “ bad ” twelvemonth than in a “ good ” twelvemonth. The same rule applies for positive ( satisfactory ) consequences. When the consequences are positive in a twelvemonth with good economic fortunes, there will be more external causes that can be assigned to the satisfactory public presentation. Discounting of the function of internal factors should take topographic point. However, when the consequences are positive in a twelvemonth with hapless economic fortunes augmentation of the function of internal causes is increased, despite possible restrictive external factors.
Therefore, this theory implies that more ascriptions will be assigned to external causes in a “ bad ” twelvemonth than in a “ good ” twelvemonth, when the consequences are negative and more ascriptions will be assigned to internal causes in a “ bad ” twelvemonth than in a “ good ” twelvemonth, when the consequences are positive.
Motivational accounts are made based on the thought that ascriptions are selected which are positive for the self-esteem by the accomplishment of success and by a failure, ascriptions are selected which are protective for one ‘s self-importance.
When the consequences are negative, there will be a greater demand for ego-defensiveness in a “ good ” twelvemonth than in a “ bad ” twelvemonth. In a twelvemonth where the economic fortunes are hapless most of the companies will take ascriptions related to external causes. This besides implies that more ascriptions are chosen related to external causes in a good twelvemonth than in a bad twelvemonth, when there is a failure.
The same rule applies for positive consequences. There is a greater demand to ego-defensiveness if other companies have better public presentations in a same economic twelvemonth. In a twelvemonth where the economic fortunes are hapless, and the consequences positive there will be no demand to protect the self-esteem. Therefore, it can be assumed that more ascriptions for success are related to internal causes in a good twelvemonth than in a bad twelvemonth. Yet, the interaction between positive consequences and different economic fortunes will non be every bit strong as the interaction for negative consequences. The inclination to impute positive consequences to internal causes will be strong irrespective the economic fortunes.
Therefore, the pick for informational and motivational accounts has different effects for the expected form of ascriptions made for positive and negative consequences in different economic fortunes.
In this thesis, a differentiation will be made between motivational and informational accounts for self-seeking ascriptions within Dutch AEX listed companies. This attack will add more value on anterior research because it looks beyond factors merely related to ego-defensiveness.
1.3 Research inquiry & A ; Sub inquiries
In chapter 2, the direction behavior as preparer of fiscal information, is discussed from different theoretical positions. Impression direction surveies, from the preparer ( director ) position, offers a widespread scope of content analysis techniques to analyze and to make research on whether and how directors use corporate narrative paperss for feeling direction intents and what factors might act upon this behavior ( Merkl-Davies et al. , 2007 ) . Impression directions occur in many different signifiers.[ 1 ]In this thesis, the focal point is on the self-seeking attributional prejudice in letters to the stockholders. Former research has provided grounds that in the missive to the stockholders, this prejudice appears in the accounts issued by direction for the fiscal consequences. Directors are tended to delegate the favorable consequences to themself, while the unfavorable consequences will be explained with mentions to external causes. Therefore, it is indispensable to analyze the attributional behavior that arises in specific societal and organisational environments ( Aerts, 2005 ) .
Aerts ( 2005 ) identifies for illustration, that an increased answerability demand and retrospective review are indispensable driving forces in specifying motivational attributional behavior that occurs in listed companies ( Aerts, 2005 ) . Given these notes, the first research inquiry is indicated as follow:
Do directors of Dutch AEX listed companies show self-seeking prejudices to explicate organizational consequences in the missive to the stockholders?
To reply the research inquiry the following sub-questions must be answered:
Is there a difference in attributional behavior between companies with good consequences and bad consequences in the same twelvemonth?
How do companies vary in their ascription forms for favorable and unfavorable results?
What organizational and/or situational factors explain differences in the extent of self-serving prejudices?
The expected form of ascriptions made as consequence of favorable and unfavorable consequences in good and bad economic fortunes will differ to the extent of the usage of informational or motivational accounts, which are outlined in subdivision 1.2. Therefore, it is necessary to separate the motivational and informational accounts for self-seeking ascriptions in an organisational scene.
Although several surveies implies that the self-seeking form merely occurs in fortunes, considered as high ego-defensiveness, it will add value to research of the same form will happen due to other factors instead than ego-defensiveness. This leads to the implicit in inquiry, which expands old research on this topic.
Make differences be in the self-seeking attributional prejudice as may be present in the missive to the stockholders of companies runing in different economic fortunes, and if so, how can these differences been explained to foretell the attributional form for motivational and informational prejudices?
1.4 Hypothesis and Methodology
In chapter 4, hypotheses are developed in order to happen an reply on the research and sub inquiries. These hypotheses are tested utilizing empirical research methods utilizing statistical scrutiny tools. To prove whether the attributional prejudice differs among companies in a given good and hapless twelvemonth or given company consequences as favorable and unfavorable consequences, the Analysis of Variances ( ANOVA ) trial in SPSS will be used.
There will be plenty informations to use the statistical method ANOVA for this sample, because different hapless economic old ages and different good economic old ages will be analysed for about 25 AEX listed Dutch companies. For each of these companies, the one-year studies for the old ages 1998, 2001, 2006 and 2008 will be studied. This consequences in about[ 2 ]25*4 = 100 information points.
The ANOVA is used when there is a categorical independent variable and a usually distributed interval dependant variable when proving for differences in the agencies of the dependant variable categorized by the rank of the independent variable. The One-way ANOVA compares the mean of one or more groups based on one independent variable. In this survey, there is one independent qualitative variable, which is the “ Favorable or Unfavorable public presentation ” . This “ Performance ” variable is divided into two groups:
Attributional prejudice when favorable consequences are presented in the one-year study.
Attributional prejudice when unfavorable consequences are presented in the one-year study.
Using the ANOVA analysis, this scenario will be examined in good and hapless economic fortunes. When sing the economic fortunes as independent factors good economic twelvemonth and hapless economic twelvemonth when a company reports favorable results or unfavorable results a bipartisan ANOVA should be used. The bipartisan analysis of discrepancy is an extension to the one-way analysis of discrepancy. There are two independent variables ( hence the name two-way ) . In this portion of the survey there are two independent qualitative variables, which are the reported consequences in the one-year study: “ Favorable or Unfavorable ” and the “ Good nut Poor ” economic environment related to the attributional prejudice:
Attributional prejudice when favorable consequences are presented in the one-year study in a hapless economic twelvemonth.
Attributional prejudice when favorable consequences are presented in the one-year study in a good economic twelvemonth.
Attributional prejudice when unfavorable consequences are presented in the one-year study in hapless economic twelvemonth.
Attributional prejudice when unfavorable consequences are presented in the one-year study in good economic twelvemonth.
Additionally, to look into the available forms of ascriptions by Dutch AEX listed companies, eventuality tabular arraies will be used for each variable and its several associations. Eventuality tabular arraies are used for categorical informations analysis and they consist of tabular arraies of frequences classified harmonizing to two or more sets of categorical variables.
Besides, to analyze whether the figure of internal versus external related ascriptions are a map of the interaction between the nature of economic fortunes ( good or bad twelvemonth ) and the nature of the results ( favorable or non favorable ) a arrested development analysis will be used.
1.5 Data and Sample
The focal point in this survey relies on the accounting narrations in the missive to the stockholders. There are legion grounds to look into the forms of causal concluding as topic to the company ‘s public presentation based on one-year studies. First, one-year studies contain a ( reasonably ) similar set of informations for an expansive sample of companies. Other informations, for illustrations interviews with companies will be less comparable or even non available. Yet, there is much difference in the formats of one-year studies.
Therefore, the focal point will be chiefly placed on the missive to the Shareholders portion. This is the most similar portion of the one-year study, that discusses the public presentation of the company.
The letters to the stockholder of about 25 Dutch AEX listed companies will be examined that finds themselves in good and hapless economic fortunes. . Because of comparison considerations merely AEX listed companies are involved in this research. For illustration AMX listed companies ( Midcap index ) , are non included in this trial because these companies differ in the size ( market capitalisation ) from AEX listed companies. Involving AMX listed companies in this research might hold influenced the consequences of this thesis since the included variables in this thesis might act upon these mid-sized companies in another manner. An possibility for farther research is to look into this phenomenon for AMX listed companies separately or execute an probe where both groups are compared. For each of these companies, the one-year studies for the old ages 1998, 2001, 2006 and 2008 will be studied. This consequences about in 25*4 = 100 information points. With the assistance of the stock market index, two points are selected where the economic fortunes are good and two points were the economic fortunes are hapless. The definition of a twelvemonth with good and hapless economic fortunes is important in this survey. Therefore, the choice of the old ages of each type ( good and hapless ) are made with purpose of indices of economic activity like the Gross National Product ( GNP ) for the Netherlands and the stock market indices ( AEX ) . Chapter 4 discusses extensively the informations and sample used for the research in this thesis.
1.6 Delineation of research and research attack
In order to reply the definite research inquiries, there is a demand to sketch a theoretical model, where all constructs and theories will be highlighted. As presented in table 1, accounting research might be approached from different accounting theories. Different theories are developed to look into managerial behavior. A positive accounting position surveies economic determination doing behaviors of different market participants. When taking this construct broader, besides capital market facets and behavioral facets can be investigated. There are several theoretical attacks to carry on a research in the accounting survey. Chapter 2 will supply background information about these theories and their position.
The positive accounting attack, which is one of these theoretical attacks, efforts to explicate behavioral relationships in accounting. It tries to reply why directors ( in the context of this thesis, the preparers of fiscal information ) chose peculiar accounting options.
This research is entered from the positive accounting research attack, because feeling direction and the self-seeking ascription theories fits the best in this attack in analyzing and explicating the behavior of directors in the fiscal coverage procedure. In the positive accounting theory, it is assumed that direction ‘s self-seeking behavior may be the drive force behind the finding of income and the choice of accounting methods ( Gaver and Paterson, 2001 ; Healy, 1985 ; Holthausen et al. , 1995 ; Watts and Zimmerman, 1986 ) . Directors have an involvement to expose information related to the achieved company ‘s public presentation every bit good as possible. The reveal of negative or unfavorable consequences has effects for the repute of the direction. It can do a negative impact on the director ‘s wages ( Abrahamson and Park, 1994 ) , or even do post-dismissal employment hard ( Harrison and Harrell, 1993 ) .
Harmonizing to Merkl-Davies et Al. ( 2007 ) , five theories can be distinguished which provides the theoretical underpinning for research from preparers ( directors ) position ( see figure 1 ) , which is besides comprised by the positive accounting research. These are the bureau theory ; signalling theory ; legitimacy theory ; stakeholder theory ; and institutional theory. In chapter 2, each of these theories will be described, followed by a treatment of their differences and their relevancy in understanding managerial behavior and their position on feeling direction, within the positive accounting attack.
Table 1: Accounting theories and attacks
Behavioral
Accounting Approach
Positive Accounting Approach
Market- based
Accounting Approach
Concept/ Perspective
How users of accounting information make determinations and what information they need
Explain behavioral relationships in accounting.
Research concentrating on the preparer
Research into the association between publically disclosed accounting information ; and the effects of the usage of this information by the equity investors
Accounting Research Approach
Wages attending to the psychological facets of determination devising
Impacts on opinions and determinations
Answer why directors chose peculiar accounting options
Managerial behavior
What is the information content of accounting information?
Impacts on capital market ( prices/returns )
Research
Impacts on opinions and determinations
Directors
Users
Hearers
Managerial behavior
Preparer
Principal-Agent Relationship
Impacts on capital market ( Prices/returns )
Measuring value relevancy ( association survey )
Measuring information content ( event survey
Figure 1 is a portion of table 1 and illustrates the model of this thesis from the position of positive accounting research and is build up as follow:
Figure 1: Thesis theoretical model
The Agency theory dominates this country of positive accounting research. Harmonizing to Baiman ( 1990 ) , both viing schools of idea recommending feeling direction and incremental information, usage premises embedded in bureau theory ( Baiman, 1990 ) . Harmonizing to Guillomon ( 2009 ) , is impression direction one of the likely visual aspects of the bureau job. The incremental information school assumes that directors offer discretional narrative information to get the better of information dissymmetries between house insiders and foreigners to take down the cost of capital, thereby heightening portion public presentation, and therefore increasing managerial compensation ( Baginski et al. , 2000 ) .
Harmonizing to Merkl-Davies et Al. ( 2007 ) , Smith and Taffler ( 1992a ) and Rutherford ( 2003 ) usage signalling theory in the scene of the bewilderment[ 3 ]hypothesis. Where bureau theory Centres on ill performing houses, signalling theory Centres on the behavior of directors in good performing houses who signal this high quality by greater transparence in their revelation and presentation of information ( Merkl-Davies et al. , 2007 ) .
1.7 Relevance
A research is conducted with the intent to add value and new positions to current cognition and perceptual experiences. There are a batch of possibilities to make research on this topic which should add value to the bing scientific discipline. While several surveies evidenced that the self-seeking form merely occurs in fortunes, considered as high ego-defensiveness, it will add value to research whether the same form will happen due to other factors instead than ego-defensiveness. This expands old research on this topic. Former research has provided grounds that in the missive to the stockholders, this prejudice appears in the accounts issued by direction for the fiscal consequences. Directors are tended to delegate the favorable consequences to themself, while the unfavorable consequences will be explained with mentions to external causes. In this thesis, a differentiation will be made between motivational and informational accounts for self-seeking ascriptions within Dutch AEX listed companies. This attack will add more value on anterior research because it looks beyond factors merely related to ego-defensiveness. This attack would add value to the positions and penetrations of standard compositors, accounting professions, hearers, stockholders, authoritiess and other regulative organic structures in rehearsing their profession. From the consequences of this survey lessons might be learned for future patterns and battles by standard compositors and other accounting professions when understanding direction behavior in different fortunes. In this research besides samples are considered for the old ages after the old ages 2005 and 2006 which were of import sing the debut of IFRS in 2005 in the Netherlands for AEX listed companies and because since the terminal of the twelvemonth 2006 external hearers have been required to verify and scrutinize the harmonisation of the balance and income statement with the revelation portion of the one-year study. This attack would demo the effectivity of these new accounting criterions and ordinances which has been introduced to restrict the pattern of feeling direction in accounting narrations by preparers of one-year studies.
1.8 Structure of thesis
The old subdivision already elaborated in a broad extend to the theoretical model of this thesis. Chapter 2 discussed this theoretical model extensively and gives attending to the different accounting research approaches like positive accounting research, behavioral accounting research, and market-based accounting research. Besides, chapter 2 focal points on subjects in the accounting theory in explicating managerial behavior highlighted from “ preparers ” position. This preparers perspective attacks accounting events from the position of the “ preparer ” , which are the directors that “ fix ” fiscal statements and other fiscal studies ( narrations ) . The “ preparer ” might be influenced by different factors, and hence they might demo specific behavior. Therefore, Chapter 2 besides discusses the drive force behind managerial behavior and attempts to explicate this behavior utilizing different theories within the positive accounting research like Agency theory and signalling theory. Furthermore, chapter 2 discussed the feeling direction subject and different feeling direction schemes in fiscal coverage and the phenomenon “ self-seeking attributional prejudice ” . Within the societal psychological science, the ascription theory is concerned with the survey of accounts people give for events. Peoples could delegate events to internal factors such as expertness and committedness every bit good as external factors such as fortune or bad fortune. The self-seeking attributional theory includes that on the one manus a successful result is attributed to internal factors, the so called “ self-enhancing prejudice ” , while on the other manus failures are attributed to external factors, the so called “ self-protecting prejudice ” . This duality will be discussed extensively. There will be besides paid peculiar attending to impression direction and assorted theories that will explicate this self-seeking attributional prejudice.
Several surveies are conducted and assorted self-seeking revelation patterns have been revealed. The most of the surveies has focused on the Chariman ‘s statements ( Aerts, 2001 ; Clatworthy and Jones, 2003 and 2006 ; Smith and Taffler, 1992 and 2000 ) . Nevertheless, besides other corporate studies have been studied ( Aerts, 2005 ) . The most common feeling direction techniques in accounting narrations are discussed in chapter 2.
Chapter 3 follows with a literature reappraisal on old surveies and analyses conducted in different states on this subject. The consequences of old surveies are needed to specify theoretical replies to the research inquiries
Subsequently, in chapter 4 the research design is presented. First, the prognostic cogency model will be explained based on this research. This model provides a study of the hypothesis proving procedure and the account on the cardinal determiners of the internal and external cogency of research design. Using this model, the research method and the research theoretical account will be described. Thereafter, the empirical portion of the thesis will follow. Chapter 4 besides provides the methodological analysis behind the research. This chapter gives an penetration in the variables that I will utilize during my research and the informations aggregation.
Thereafter, chapter 5 provides a treatment of the consequences and findings. The focal point will be laid on the premises that are made in the theoretical portion of the thesis. These findings are the base for pulling a decision.
Finally, chapter 6 and 7 coating this paper with a decision and with farther recommendations based on the findings.
