Automating Google Workspace (GWS) & more with Apps Script
Mood accounting
1. Bad Mood Accounting
Behavioral Implications of Accounting
Information
Presented at the National Central University
Jacob Peng, Ph.D.
Associate Professor of Accounting
School of Management
University of Michigan-Flint
3. Not-Completed-At-All
Snapshot of Accounting Research
• By fields/topics • By method
– Analytical, modeling
– Archival, capital
market research
– Experiment, behavior
al research
– Others
• Survey
• Case
• Field study
4. New Alphabets in Accounting
(Brian Summer’s presentation at 2011 AAA Annual Meeting)
• SOX - control: workflow, segregation,
process testing, SAAS: SAS 70: security
• XBRL - XML, tagging, integration,
schemas
• IFRS - convergence, historical
restatement, simultaneous ledgers ( US
GAAP book and IFRS book)
5. Archival Research
• Archival: data collection from databases
• Efficient market hypothesis, earnings management,
event studies, etc.
– Fama lecture:
http://www.dimensional.com/famafrench/2009/10/fama-lecture-
masters-of-finance.html
– More publication outlets
– Finance, econ journals
6. Experimental Research
• Experimental: study limited number of variables in a
controlled environment where causal relationship
can be verified
– Major variables
– Interactions
– Must by carefully designed because of high “transaction
cost”
• Understand the “black box” of human information
processing
– Theories from cognitive psychology
– Heuristics
– Decision making bias
8. Who Will You Hire?
• Candidate A • Candidate B
– Graduate from top – Graduate from top
university university
– Extensive work – Extensive work
experiences experiences
– Strong – Strong
recommendations recommendations
9. What if…..
• Candidate A • Candidate B
– Knowledgeable about – Confident in his ability
baseball – You happen to but far less impressed
be an ESPN junkie with his interpersonal
skills
10. Mind Reader
• Emotional response (heuristic decision
making) vs. analytical reasoning (normative
decision making)
• Use MRIs to examine financial decision
making (University of Illinois)
11. Are You in Good Mood Today?
• Affect, Mood, Emotion
• Why study mood?
– Factors that influence decision-making
– Cognition uninfluenced by mood may be
relatively rare
• General question:
– Mood Decision making (improve or
impair?)
12. Research of Mood in Accounting
• Kadous 2001 @ Contemporary Accounting Research
• Kida et al. 2001 @ Contemporary Accounting Research
• Moreno et al. 2002 @ Journal of Accounting Research
• Bhattacharjee and Moreno 2002 @ Journal of Behavioral
Decision Making
• Rose et al. 2004 @ International Journal of Accounting
Information Systems
• Curtis 2006 @ Journal of Business Ethics
• Chung et al. 2008 @ Auditing: A Journal of Practice &
Theory
• Cianci and Bierstaker 2009 @ Auditing: A Journal of Practice
& Theory
• Ford and Peng 20XX
13. Theoretical Background (1)
• According to neurobiological studies, individuals have difficulty
functioning when the link between affective and cognitive system
is destroyed (Kida et al. 2001)
• Affect and cognition are intertwined to influence decision making
(Bhattacharjee and Moreno (2002)
• Affect-as-information theory (Kadous 2001): affect facilitates
evidence retrieval or treated as information relevant to decision
at hand
14. Theoretical Background (2)
• Memory reconstruction effect (Rose et al. 2004): memories are
reconstructed to match affective response
• Affect infusion model (Curtis 2006): affect has strongest impact when
cognitive processing is substantive or heuristic, least when processing is
direct or motivated
• Mood-congruent retrieval of information (Chung et al. 2008): positive
(negative) mood individuals retrieve more positive (negative) information
from memory which lead to positive (negative) evaluations
• Mood maintenance theory (Chung et al. 2008): Positive mood individuals
are more interested in maintaining their positive mood; while negative
mood individuals are more interested in repairing their mood state
• Cognitive-affective model of ethical decision making (Curtis 2004; Cianci
and Bierstaker 2009): positive mood leads to more ethical decisions
15. Task Used in Experiments
• Capital budgeting decisions (Kida et al. 2001; Moreno et al.
2002): which involve negotiations among parties on transfer
pricing, inter-departmental divisions and cross-functional
teams
• Jurors’ auditor negligence case evaluations (Kadous 2001)
• Inventory obsolescence risk judgment (Bhattacharjee and
Moreno 2002)
• Financial data analyses (Rose et al. 2004)
• Whistle-blowing intentions (Curtis 2006)
• Inventory valuation decisions (Chung et al. 2008)
• Hypothesis generation for financial rations fluctuations
(Cianci and Bierstaker 2009)
16. Main Findings
• Negative affect created during auditor negligence trial
judgments against auditors (Kadous 2001)
• Negative mood Higher Risk assessment; mediated by
auditor experiences (Bhattacharjee and Moreno 2002)
• Auditor Risk-taking tendencies are alerted by mood state
(Morena et al. 2002)
• Information load and cognitive load mediated the reliance
on affective responses (Rose et al. 2004)
• Negative mood lower intention to report unethical
behavior (Curtis 2006)
• Positive (negative) mood ==? Lowest (highest) judgment
consensus and make least (most) conservative judgment
(Chung et al. 2008)
17. MEDIATORS OF THE EFFECT OF MOOD ON EXPENSE
REPORTING BEHAVIOR:
COMMUNICATION MEDIUM AND DEBRIEFING
18. Motivation
• “Phantom costs” as one of the top red flags
for increased opportunity for corporate
fraud.
• Expense report fraud as one of the most
common types of fraud allegations
• Why? Two factors are examined in this
paper:
– Mood
– Communication medium
19. Research Questions
• Does “mood state” affect expense
reporting behavior?
• Does communication medium used
influence expense reporting behavior?
• Can “mood state” effect on expense
reporting behavior be altered?
20. Literature Review (1)
• Effect of mood on ethical behavior
– Mood is well documented that it is an essential
component of social life and organizational behavior
– Generally speaking, mood can be categorized into
different states: positive, negative, and neutral
– Relationship between mood and ethical behavior
• Cianci and Bierstaker (2009): auditors in a positive (compared
to negative) mood state did, in fact, perform better in an
inventory ethical task by indicating that they would be more
likely to recommend a write-off of obsolete inventory.
• Curtis (2006): negative mood is associated with lower
intentions to report the unethical actions of others to a
superior (whistle-blowing) within the organization.
22. Literature Review (2)
• Social presence = the degree to which a medium is perceived as
conveying the presence of the communicating participants
• Relationship between social presence and ethical behavior:
– Logsdon and Patterson (2009): increased deception in online
business networks due to weak ties (less empathy between sender
and receiver), increased opportunity for asymmetrical emotional
relationships (one party has empathy, other does not), differential
power relationships, and decreased proximity among participants.
– Kachelmeier and Towry (2002): the means of negotiation, whether
conducted face-to-face or via a computer network, influenced
fairness pressures during transfer price negotiations.
– Valley et al. (1998): participants negotiating face-to-face achieved
higher joint benefit due to higher levels of truth-telling than those
negotiating by telephone or in writing
23. Method
• 3 x 2 between subject experiment
– Mood: positive, neutral, negative
– Social presence (communication medium):
face-to-face and web-based
Positive MOOD Neutral Mood Negative
MOOD
High SOCIAL Treatment 1 Treatment 2 Treatment 3
PRESENCE (face
to face)
Low Social Treatment 4 Treatment 5 Treatment 6
PRESENCE
(online)
24. Experiment Procedures
Subjects Mood Mood-
Expense Expense
sign in manipulation
and including
report removal report task Debrief
task 1 procedures 2
consent instructions
26. Read the Following Statements to Yourself
(Velten Instrument)
• I feel a little low today.
• I ‘m getting tired out I can feel my body
getting exhausted and heavy.
• Sometimes I wonder whether school is all
that worthwhile.
• People annoy me; I wish I could be myself.
• I’ve doubted that I’m a worthwhile person.
• Sometime I’ve wished I could die.
27. Velten Statement (2)
• This might turn out to have been one of my
good days
• I feel cheerful and lively
• If I set my mind to it, I can make things turn
out fine
• I feel superb! I think I can work to the best
of my ability
• Life is so much fun; it seems to offer so
many sources of fulfillment
28. Experiment Task
• Task 1: subjects to assume the role of a business traveler traveling
for business purposes. Subjects read scenarios describing
business expenditures and are asked to determine the amount of
business expenses to be included in their request for
reimbursements. The scenarios are intentionally ambiguous and
are subject to each individual’s judgment about whether the
expenses are indeed legitimate business expenses and should be
included in the expense report.
• Task 2 (debriefed): subjects are told to intentionally clear their
minds and empty the feelings induced by the mood statements.
They are asked to make the next decisions free from affected
mood. Subjects are presented with the same business scenarios
with additional information regarding their colleagues’ responses
to the same business expenses described in each scenario.
31. Results 1
• Mood manipulation was successful
• Subjects with negative mood reported on average 10% more on their
expense report
• Subjects using web-based system reported 5% more than their
counterparts who filed in-person
• Debriefing was not successful
33. Results 2
Expense Report Amount
positive mood
negative mood
F2F (High Social Presence) Online (Low Social Presence)
34. Conclusions
• Confirmed prior findings that negative mood leads to
undesired behavior
• Our contribution: the effect of negative mood on behavior
can be mediated to some degree by increasing social
presence of the communication medium
• Additional research: our debriefing technique was not
successful. Simply asking subjects to recognize their mood
and the potential it may have to influence their decisions
was not enough to alter their decisions. This is definitely a
potential arena for future research. Implementing a more
formal approach to change mood may still have implications
for behavior changes.
