Time is money: The effects of budget funding delay on opportunistic reporting

Yip, Michael A.

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https://hdl.handle.net/2142/120375 Copy

Description

Title

Time is money: The effects of budget funding delay on opportunistic reporting

Author(s)

Yip, Michael A.

Issue Date

2023-04-18

Director of Research (if dissertation) or Advisor (if thesis)

Williamson, Michael G

Doctoral Committee Chair(s)

Williamson, Michael G

Committee Member(s)

• Chen, Clara (Xiaoling)
• Hecht, Gary
• Goncalo, Jack
• Samet, Jordan

Department of Study

Accountancy

Discipline

Accountancy

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

Budget Delay

Language

eng

Abstract

I investigate how delay in the budget review and funding process affects opportunistic reporting using multiple lab experiments. I use an experiment to demonstrate that subordinates report budget information more opportunistically when a supervisor reviews and funds their budget proposal after a delay, consistent with prior research that finds delay increases self-serving behavior. However, I predict and find that delay also amplifies subordinates’ feeling of anticipated dread when the budget approval is required which helps mitigate opportunistic reporting. Moreover, I predict and find the mitigating effect of anticipated dread on opportunistic reporting is stronger for a large relative to small payoff stake with delay, consistent with theory that more consequential outcomes evoke greater anticipated dread. Given the prevalence of delay in budgeting, my results provide new insights on the countervailing effect of anticipated dread on opportunistic budget reporting which can help with the design of management control systems.

Graduation Semester

2023-05

Type of Resource

Thesis

Handle URL

https://hdl.handle.net/2142/120375

Copyright and License Information

Copyright 2023 Michael Yip

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