Why controllers compromise on their fiduciary duties: EEG evidence on the role of the human mirror neuron system

Philip I. Eskenazi, Frank G.H. Hartmann and Wim J.R. Rietdijk

Accounting, Organizations and Society, 2016, vol. 50, issue C, 41-50

Abstract: Business unit (BU) controllers play a fiduciary role to ensure the integrity of financial reporting. However, they often face social pressure from their BU managers to misreport. Drawing on the literature on the human mirror neuron system, this paper investigates whether controllers' ability to withstand such pressure has a neurobiological basis. We expect that mirror neuron system functionality determines controllers' inclination to succumb to social pressure exerted by self-interested managers to engage in misreporting. We measure mirror neuron system functionality using electroencephalographic (EEG) data from 29 professional controllers during an emotional expressions observation task. The controllers' inclination to misreport was measured using scenarios in which controllers were being pressed by their manager to misreport. We find a positive association between controllers' mirror neuron system functionality and their inclination to yield to managerial pressure. In line with our expectation, we find that this association existed specifically for scenarios in which managers pressed their controllers out of personal rather than organizational interests. We conclude that BU controllers’ neurobiological characteristics are involved in financial misreporting behavior and discuss the implications for accounting research and practice.

Keywords: Controllers; Fiduciary role; Social pressure; Human mirror neuron system (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0361368216300046
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:50:y:2016:i:c:p:41-50

DOI: 10.1016/j.aos.2016.02.003

Access Statistics for this article

Accounting, Organizations and Society is currently edited by Christopher Chapman

More articles in Accounting, Organizations and Society from Elsevier
Bibliographic data for series maintained by Catherine Liu ().