Govind S. Iyer

Usefulness, incentives and knowledge management

Purpose – The purpose of this paper is to explore the effect of “usefulness” and “incentives” on the joint decision to share and use knowledge objects.Design/methodology/approach – Using an experimental design, the authors explore the effects of different incentive systems, the effect of the usefulness of a knowledge management system on intent to contribute and intent to use knowledge, the effect of personal characteristics, specifically an individuals tolerance of ambiguity, and joint endogeneity of contribution and use along with potential complementarity of usefulness and incentives.Findings – For ambiguity tolerant individuals, an incentive mechanism that rewards the contributor for shared knowledge used by a knowledge user, and the knowledge user for the act of reuse, is more effective than a simpler incentive scheme that merely rewards knowledge sharing when usefulness level is low. Ambiguity intolerant individuals react equally to both types of incentive schemes regardless of usefulness. Ambiguit...

THE IMPACT OF NON-AUDIT SERVICE FEE DISCLOSURE REQUIREMENTS ON AUDIT FEE AND NON-AUDIT SERVICE FEE IN THE UNITED KINGDOM: AN EMPIRICAL ANALYSIS

Abstract Since the early 1990s the accounting profession has been in the midst of a debate about the deleterious effects of public accounting firms providing non-audit services to their audit clients. In response to increasing demand for regulation curbing the growth of non-audit services provided by auditing firms and to provide greater transparency of the auditor-client relationship, the SEC adopted rule amendments regarding auditor independence. One such rule requires public companies to disclose among other things, fees paid to auditors for rendering non-audit services. In the United Kingdom, the Companies Act 1989 (Disclosure of Remuneration for Non-Audit Work) 1991 Regulations required disclosure of non-audit service fees paid to the incumbent auditor for years ending on or after September 30th, 1992. The purpose of this study is to explore the effect of such disclosure requirement on audit fee and non-audit service fee. Based on a sample of 156 companies in the United Kingdom we find that there were significant differences in the level of non-audit service fee and ratio of non-audit service fee to audit fee for companies that voluntarily disclosed 1991 non-audit service fee and companies that did not disclose 1991 non-audit service fee. Also, a comparison of the trends in audit fee and non-audit service fee between these two groups from 1991 to 1994 indicated that the disclosure requirement had some limited effect in curbing the growth in non-audit service fee. Furthermore, audit fees were positively related to non-audit service fees and a first-difference regression ( Iyer & Iyer, 1996 , Maher et al., 1992 ) revealed that changes in audit fee were also positively related to changes in non-audit service fee.

Organizational and knowledge management related antecedents of knowledge use: the moderating effect of ambiguity tolerance

To leverage their knowledge resources, many organizations deploy knowledge management systems (KMS), which contain at their core a knowledge repository. Successful use of the knowledge/repository depends largely on knowledge workers who must contribute to the knowledge base as well as use those knowledge objects. We develop and validate an empirical model that explains mechanisms required to reduce knowledge gaps in a firm or business unit, through knowledge contribution and use or reuse. Using the theory of planned behavior and its derivative the technology acceptance model, we find that a feature rich user friendly KMS combined with extrinsic rewards (or incentives) and knowledge self-efficacy are critical to KM success. Tolerance of ambiguity (a personal trait) is a key influence in the causal relationship between incentives and knowledge gaps as well as knowledge self-efficacy and knowledge gaps. The main findings of this study are (1) for ambiguity intolerant individuals, incentives and self-efficacy are as important as the KMS as motivators for knowledge sharing and use, (2) for this group, it is necessary to stress the importance of KM as a means of social persuasion in building knowledge self-efficacy, (3) for the ambiguity tolerant, incentives are not required, and self efficacy is self-determined i.e., KM champions are not required to highlight the importance of KM; in fact the technology (KMS) is all important, a finding that negates conventional wisdom that technology is merely an enabler. In summary, a one-size fits all mindset is not effective, a firm must carefully consider the ambiguity tolerance levels of employees before forging ahead with KM efforts. This becomes all the more important to practitioners because of the recently highlighted differences in ambiguity tolerance between “Millennials” and” Generation Xers”. In addition to theory testing in KM, this research also informs KM practice.

An analysis of the distributional effects of replacing the progressive income tax with a flat tax

Abstract Our study investigates the distributional effects of replacing the current income tax system with two prototype flat tax systems: 1) the Armey-Shelby-Craig flat tax proposal, and 2) the Specter flat tax proposal. Our analysis indicates that replacing the current income tax system with either flat tax system would result in a modest increase in the average tax rate for taxpayers in the first income decile. For the remaining taxpayers, such a switch results in reductions in the average tax rate that tend to increase as income increases. We also found that for taxpayers reporting business income: 1) the current income tax system is most progressive, and 2) both flat tax systems are partially regressive. For taxpayers reporting no business income, however, the Armey-Shelby-Craig system is most progressive. Both flat tax proposals moderate before-tax income inequality modestly, but neithe moderates income inequality as effectively as the current income tax system.

Re-Defining “Materiality”: An Exercise to Restore Ethical Financial Reporting

Abstract This paper uses a survey and experimental case methodology to examine whether financial statement users/stakeholders agree with the underlying assumptions of SAB 99, a staff bulletin issued by the Securities and Exchange Commission (SEC) in response to numerous high-profile cases of abusive earnings management practices by major corporations. SAB 99 lists several qualitative factors that should render an otherwise quantitatively immaterial item to be material in nature. Results of the survey and the experimental case studies confirm that both current and prospective members of management (as well as current audit seniors) are in general agreement with the materiality guidelines put forth in SAB 99.

Election Outcome and Tax Compliance: The Role of Political Party Affiliation, Affect Balance, and Trust in Government

The present study examines partisan reactions to presidential election outcomes. Our model investigates the interactive role of political party affiliation on the relationship between identification with the winning party and affect balance. We subsequently examine how tax compliance intentions are influenced by this moderation relationship through affect balance and trust in government. We conducted a quasi-experiment one week prior to the first mass 2016 presidential primary, where 12 of the 50 US states voted to decide which candidates would represent the Republican and Democratic parties in the 2016 US presidential election. Our sample consisted of 205 Republicans and Democrats. We manipulated press releases showing various presidential candidates winning the presidency to examine how matches / mismatches between partisans’ political party affiliation and the party winning the election influence citizens’ overall feelings, beliefs, and intentions. We find election outcomes generate significant overall positive or negative feelings (i.e., affect balance) among partisans, which influences beliefs about trust in government, and subsequently their tax compliance intentions. Political party moderates the relationship between election outcomes and affect balance in such a way that Democrats experience greater overall positive affect balance when their party wins the election compared to Republicans.