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- Title
Does Self-Certification Encourage or Reduce Opportunistic Behavior?
- Authors
Ang, Nicole; Cheng, Mandy M.
- Abstract
We experimentally investigate the effectiveness of a self-certification requirement as an informal control to reduce opportunistic behavior. We predict and find that a requirement that managers sign to take sole responsibility for their decisions—even though the decision is kept private—acts as a ''double-edged sword.'' Using a capital investment setting involving two decision stages, we find that self-certifying managers are less likely to behave opportunistically at the first stage. However, at the second stage, managers are more likely to behave opportunistically if they previously self-certified an opportunistic decision. Additional analysis indicates that a monitoring-based control removes the effectiveness of self-certification altogether. Overall, we find that the effectiveness of a self-certification requirement in reducing opportunistic behavior is bounded by its timing and the presence of other controls; it is potentially useful when managers are making a first decision, and only in the absence of a formal monitoring system.
- Subjects
CAPITAL investments; MANAGERIAL accounting; OPPORTUNISM (Psychology); DECISION making; HUMAN behavior
- Publication
Behavioral Research in Accounting, 2016, Vol 28, Issue 2, p1
- ISSN
1050-4753
- Publication type
Article
- DOI
10.2308/bria-51468