Reports on two experiments examining the effects of alternative incentive pay schemes for controlling unit manager behavior in intrafirm resource allocation settings. Resource allocation and the Groves scheme; Operationalization of the resource allocation setting; Cash earning schedule; Unit managers' responses to bonus pay.

When making audit judgments end decisions, an auditor often relies on knowledge or information about how task variables covary. Typically, an auditor generates this information without the aid of a formal covariation model. Thus, the quality of audit judgments and decisions which rely on covariation information may depend on an auditor's ability to judge covariation in a manner that is paramorphic to 8 formal model. This paper reports two experiments examining the rules by which auditors Integrate joint frequency data when making covariation judgments end whether their judgments are affected by context, prior expectations, and amount of auditing experience. A main result was that the subjects generally used date-integration rules that were sensitive to the objective covariation level, but often overstated or understated this level. The effects of context, prior expectations, end amount of auditing experience were generally small.

This paper presents a framework for empirical research on the self-selection and effort effects on worker performance of standard-based employment contracts, along with the results of an experiment that tests some hypotheses derived within the framework. The framework examines how personal and contract attributes (or a worker's perceptions of them) affect the self-selection process and how self-selection and effort are interdependent. The experimental results were consistent with these hypotheses: workers select among alternative employment contracts based on their performance capability, the correlation between performance capability and performance incentives in the contract selected is higher in the presence of a controllability filter, and contract selection can explain effort effects.

Auditors' self-perceptions of their judgment ability may affect how well they learn from experience and how much they rely on decision aids. This study tests the hypothesis that incomplete outcome feedback causes auditors' self-perceived judgment ability to be affected by factors that are not necessarily related to actual judgment ability. The results of an experiment that used professional auditors as subjects making internal control judgments were, for the most part, consistent with this hypothesis.

Auditing, Auditor-Auditee interactions, Misstatements, Strategic behavior

An important issue in audit judgment research concerns auditors' use of unaudited book values when making judgments in the presampling phase of the audit. This paper presents a rudimentary model of the auditor's belief revision process with respect to unaudited book values from an audit value estimation perspective. An experiment testing some implications of the model is also presented. The model proposes that the auditor should judge the validity of unaudited book values in the circumstances and use them accordingly when making presampling audit value estimates. The experimental results indicated that the subjects (auditors) used available unaudited book values and that the extent of usage varied over accounts. However, the results also indicated some inaccurate presampling validity judgments which led to overweighting of unaudited book values. Résumé. Une question importante qui préoccupe les chercheurs dans le domaine de la formulation de jugements en vérification a trait à l'utilisation par les vérificateurs de valeurs comptables non vérifiées dans la formulation de jugements au cours de la phase de la vérification précédant l'échantillonnage. Les auteurs présentent un modèle rudimentaire du processus de révision des convictions du vérificateur en ce qui a trait aux valeurs comptables non vérifiées dans une perspective d'estimation de la valeur de vérification. Ils font également état d'une expérience destinée à vérifier certaines des conséquences du modèle. Selon le modèle, le vérificateur devrait juger de la validité des valeurs comptables non vérifiées dans les circonstances et les utiliser en conséquence dans la formation d'estimations de la valeur de vérification avant échantillonnage. Les résultats de l'expérience révèlent que les sujets (vérificateurs) utilisent les valeurs comptables non vérifiées disponibles et que l'étendue de cette utilisation varie avec les comptes. Toutefois, les résultats révèlent aussi l'inexactitude de certains jugements relatifs à la validité antérieure à l'échantillonnage, à la suite desquels une importance trop grande a été accordée aux valeurs comptables non vérifiées.