Publication records

We examine whether the Financial Accounting Standards Board (FASB) Codification made it easier for preparers and auditors to locate relevant accounting guidance. We find that areas of U.S. GAAP with more dispersed and voluminous guidance before the Codification experience a larger post-Codification reduction in restatements. We find a similar decline in SEC comment letter questions referencing areas of U.S. GAAP with more dispersed and voluminous pre-Codification guidance. Our results suggest that before the Codification, preparers and auditors had difficulty in locating the appropriate accounting guidance and that the Codification mitigated this difficulty.

Seeking causal evidence on biases in idea evaluation, we conducted a field experiment in a large multinational company with two conditions: (a) blind evaluation, in which managers received no proposer information, and (b) non-blind evaluation, in which they received the proposer’s name, unit, and location. To our surprise—and in contrast to the pre-registered hypotheses—we found no biases against women and proposers from different units and locations, which blinding could ameliorate. Addressing challenges that remained intractable in the field experiment, we conducted an online experiment, which replicated the null findings. A final vignette study showed that people overestimated the magnitude of the biases. The studies suggest that idea evaluation can be less prone to biases than previously assumed and that evaluators separate ideas from proposers.

© 2023 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.

Success tends to increase and failure tends to decrease the chances of future success. We show that this impact of past outcomes can change how diagnostic success or failure are regarding the competence of an individual or a firm. Succeeding under adverse circumstances is especially impressive when initial failure reduces the chances of success more for low-quality agents than for high-quality agents. Succeeding after initial failure (being a ”successful underdog”) can also indicate higher expected quality than succeeding twice if initial success increases the chances of success of all agents to a high level. In different circumstances, the outcome after success can be especially informative about quality, implying that failing after an initial success (a ”one-hit wonder”) indicates lower quality than failing twice does. We find effects consistent with our model in data on Canadian professional hockey players and on data from the Music Lab experiment: initial failure combined with eventual success is associated with high quality. The results help to clarify when failure should be attributed to the person in charge or to the situation, when underdogs and individuals who overcome adversity are especially impressive, and when a na¨ıve ”more is better” heuristic for evaluating performance can be misleading.

© 2022, INFORMS