Is accountability a double-edged sword? Experimental evidence on the effectiveness of internal controls to prevent fraud

Recent legislations oblige organizations to monitor the effectiveness of internal control mechanisms that are necessary to prevent fraud. However, little is known about the effectiveness of different internal controls. We investigate whether the duty to sign work results-one of the most prominent internal control mechanisms-is effective to prevent fraud under different superior instructions. We use a 2×2 between-subjects experimental design with accountability (duty to sign work results vs. no duty to sign) and superior instructions (with vs. without profit maximization cue) as independent variables. Both manipulations of superior instructions reminded people to respect accounting standards and principles but in one condition, an instruction to increase revenues was integrated as profit maximization cue. We expected this cue to trigger a profit maximization decision frame that increases the likelihood for fraudulent revenue recording. 58 managers from an executive MBA class participated in the experiment. We find that superior instructions interact with accountability. Fraudulent revenue recording was particularly observed when people received instructions to increase revenues and had to sign their work results. Consequently, fraudulent behavior can occur without pressure to commit fraud due to profit maximization cues that are communicated by a superior and despite implemented internal control mechanisms. We discuss possible implications of our results for the prevention of fraudulent behavior.

Legitimacy and Accountability of Independent Regulatory Agencies: A Critical Review

This article reviews the literature that deals with the problem of legitimizing regulatory governance, with a special attention to the question of the accountability of independent regulatory agencies. The discussion begins with the presentation of the traditional arguments concerning the democratic deficit of the regulatory state. The positive evaluation of regulatory performance by citizens is presented as an alternative source of legitimacy. It follows the discussion of the existing approaches to make agencies accountable, so as to ensure the procedural legitimacy of regulatory governance. Some insights concerning new forms of accountability are offered in the last section, namely with reference to the establishment and ongoing consolidation of formal and informal networks of regulators.

Repeated sprinting on natural grass impairs vertical stiffness but does not alter plantar loading in soccer players.

This study aimed to determine changes in spring-mass model (SMM) characteristics, plantar pressures, and muscle activity induced by the repetition of sprints in soccer-specific conditions; i.e., on natural grass with soccer shoes. Thirteen soccer players performed 6 × 20 m sprints interspersed with 20 s of passive recovery. Plantar pressure distribution was recorded via an insole pressure recorder device divided into nine areas for analysis. Stride temporal parameters allowed to estimate SMM characteristics. Surface electromyographic activity was monitored for vastus lateralis, rectus femoris, and biceps femoris muscles. Sprint time, contact time, and total stride duration lengthened from the first to the last repetition (+6.7, +12.9, and +9.3%; all P < 0.05), while flight time, swing time, and stride length remained constant. Stride frequency decrease across repetitions approached significance (-6.8%; P = 0.07). No main effect of the sprint number or any significant interaction between sprint number and foot region was found for maximal force, mean force, peak pressure and mean pressure (all P > 0.05). Center of mass vertical displacement increased (P < 0.01) with time, together with unchanged (both P > 0.05) peak vertical force and leg compression. Vertical stiffness decreased (-15.9%; P < 0.05) across trials, whereas leg stiffness changes were not significant (-5.9%; P > 0.05). Changes in root mean square activity of the three tested muscles over sprint repetitions were not significant. Although repeated sprinting on natural grass with players wearing soccer boots impairs their leg-spring behavior (vertical stiffness), there is no substantial concomitant alterations in muscle activation levels or plantar pressure patterns.

Towards better Olympic accountability

Ten years after the corruption scandal that shook the International Olympic Committee (IOC) in 1999, this article presents the current situation regarding accountability for this non-governmental organization based in Switzerland. The IOC is responsible for ensuring that the Olympic Games are held regularly, and since its foundation has endeavoured to promote sport without discrimination in service of sustainable human development and a better world. Olympic accountability is examined by means of four facets within a theoretical framework. The analysis of each of them shows that although considerable progress has been made by the IOC since 1999, improvements regarding accountability remain both possible and desirable. A mechanism for making improvements is proposed in the Conclusion.

Comparing the horizontal and vertical individualism and collectivism scale and the Auckland individualism and collectivism scale in two cultures: Switzerland and South Africa

This study investigated the psychometric properties of the Horizontal and Vertical Individualism and Collectivism Scale (HVIC) and the Auckland Individualism and Collectivism Scale (AICS). The sample consisted of 1,403 working individuals from Switzerland (N = 585) and from South Africa (N = 818). Principal component factor analyses indicated that a two-factor structure replicated well across the two countries for both scales. In addition, the HVIC four-factor structure replicated well across countries, whereas the responsibility dimension of individualism of the AICS replicated poorly. Confirmatory factor analyses provided satisfactory support to the original theoretical models for both the HVIC and the AICS. Equivalence measurement indices indicated that the cross-cultural replicability properties of both instruments are generally acceptable. However, canonical correlations and correlations between the HVIC and AICS dimensions confirm that these two instruments differ in their underlying meaning of the individualism and collectivism constructs, suggesting that these two instruments assess individualism and collectivism differently.

The impact of authority advice and accountability on auditors' decision to recognise norm-violating transactions.

Auditors face the difficult responsibilty to approve companies' financial accounting information reliably. They are trained to work according to accounting standards that are designed to help them in their decision making. Yet, auditors do not work in a social vacuum and are thus subject to various influences. One important source of influence at work is authority figures (e.g., experts, supervisors). On this background, we examined within two studies the impact of (1) authority advice to comply with accounting standards or to additionally maximize profits and (2) of participants' accountability for their decision. In Study 1, (n = 184 accounting students), participants who were advised by an authority to comply with accounting standards had a lower probability to recognise transactions that violated those standards than participants who were advised to comply but also to maximise profit. However, holding participants accountable for their decision reduced the difference between the two groups. In Study 2, (n = 58 managers), we again found an interaction between authority advice and accountability. But unlike the first study, participants only showed a lower probability to recognise transactions that violated accounting standards when they were held accountable and when the authority only advised them to comply with the standards. We discuss our results in light of unethical decision making and different norms or pressures to which managers may be exposed but students may not.

The media accountability of independent regulatory agencies

Independent regulatory agencies (IRAs) are increasingly attracting academic and societal attention, as they represent the institutional cornerstone of the regulatory state and play a key role in policy-making. Besides the expected benefits in terms of credibility and efficiency, these regulators are said to bring about a 'democratic deficit', following their statutory separation from democratic institutions. Consequently, a 'multi-pronged system of control' is required. This article focuses on a specific component of this system, that is, the media. The goal is to determine whether media coverage of IRAs meets the necessary prerequisites to be considered a potential 'accountability forum' for regulators. The results of a comparison of two contrasted cases - the British and Swiss competition commissions - mostly support the expectations, because they show that media coverage of IRAs corresponds to that of the most relevant policy issues and follows the regulatory cycle. Furthermore, a systematic bias in media coverage can be excluded.

Points to consider for prioritizing clinical genetic testing services: a European consensus process oriented at accountability for reasonableness.

Given the cost constraints of the European health-care systems, criteria are needed to decide which genetic services to fund from the public budgets, if not all can be covered. To ensure that high-priority services are available equitably within and across the European countries, a shared set of prioritization criteria would be desirable. A decision process following the accountability for reasonableness framework was undertaken, including a multidisciplinary EuroGentest/PPPC-ESHG workshop to develop shared prioritization criteria. Resources are currently too limited to fund all the beneficial genetic testing services available in the next decade. Ethically and economically reflected prioritization criteria are needed. Prioritization should be based on considerations of medical benefit, health need and costs. Medical benefit includes evidence of benefit in terms of clinical benefit, benefit of information for important life decisions, benefit for other people apart from the person tested and the patient-specific likelihood of being affected by the condition tested for. It may be subject to a finite time window. Health need includes the severity of the condition tested for and its progression at the time of testing. Further discussion and better evidence is needed before clearly defined recommendations can be made or a prioritization algorithm proposed. To our knowledge, this is the first time a clinical society has initiated a decision process about health-care prioritization on a European level, following the principles of accountability for reasonableness. We provide points to consider to stimulate this debate across the EU and to serve as a reference for improving patient management.

The Swiss reform of the allocation of tasks : The conventions-programs as a new partnership model for vertical cooperation ?

This research examines the impacts of the Swiss reform of the allocation of tasks which was accepted in 2004 and implemented in 2008 to "re-assign" the responsibilities between the federal government and the cantons. The public tasks were redistributed, according to the leading and fundamental principle of subsidiarity. Seven tasks came under exclusive federal responsibility; ten came under the control of the cantons; and twenty-two "common tasks" were allocated to both the Confederation and the cantons. For these common tasks it wasn't possible to separate the management and the implementation. In order to deal with nineteen of them, the reform introduced the conventions-programs (CPs), which are public law contracts signed by the Confederation with each canton. These CPs are generally valid for periods of four years (2008-11, 2012-15 and 2016-19, respectively). The third period is currently being prepared. By using the principal-agent theory I examine how contracts can improve political relations between a principal (Confederation) and an agent (canton). I also provide a first qualitative analysis by examining the impacts of these contracts on the vertical cooperation and on the implication of different actors by focusing my study on five CPs - protection of cultural heritage and conservation of historic monuments, encouragement of the integration of foreigners, economic development, protection against noise and protection of the nature and landscape - applied in five cantons, which represents twenty-five cases studies.

The vertical dimension of social relations and accurate interpersonal perception: A meta-analysis (Publishd online: 24 Oct. 2014)

There is little consensus regarding how verticality (social power, dominance, and status) is related to accurate interpersonal perception. The relation could be either positive or negative, and there could be many causal processes at play. The present article discusses the theoretical possibilities and presents a meta-analysis of this question. In studies using a standard test of interpersonal accuracy, higher socioeconomic status (SES) predicted higher accuracy defined as accurate inference about the meanings of cues; also, higher experimentally manipulated vertical position predicted higher accuracy defined as accurate recall of others' words. In addition, although personality dominance did not predict accurate inference overall, the type of personality dominance did, such that empathic/responsible dominance had a positive relation and egoistic/aggressive dominance had a negative relation to accuracy. In studies involving live interaction, higher experimentally manipulated vertical position produced lower accuracy defined as accurate inference about cues; however, methodological problems place this result in doubt.