[As behavioral accounting research has progressed, research designs have become more complex. New topic areas are initially investigated using single-factor designs, which may result in significant effects and a substantial amount of explained variation. In subsequent investigations, explained variation is increased by employing factorial designs and/or multiple-level explanatory variables. Traditionally, ANOVA is the statistical analysis approach employed to test research hypotheses. A limitation of ANOVA is that it only detects significant differences among cell means, but does not indicate the functional form of the relationship among cell means. We propose that researchers employ contrast coding-a refinement of ANOVA-to test research hypotheses. Contrast coding requires researchers to specify a priori the functional form of the relationship among cell means. This article demonstrates that contrast coding provides greater statistical power than the conventional ANOVA without increasing Type I error rates. Examples from recent accounting literature illustrate when the use of contrast coding is most advantageous. The examples include a factorial design and a single-factor, multiple-level experiment. Formulas for calculating the net benefit of employing contrast coding and the significance of the net benefit are presented. The examples and analysis support the use of contrast coding with certain research designs. The primary benefit of the a priori specification required by contrast coding is greater statistical power.]

Illustrates the increased statistical power of contrast coding over the conventional ANOVA on behavioral analysis, when multiple-level factors are involved or when certain types of interactive relationships among factors are hypothesized. Effect on Type I error rates; Limitations of ANOVA; Advantages of contrast coding; Empirical examples; Multi-level factors.

“Decision usefulness ” has been the organizing criterion for accounting policy and accounting scholarship for over forty years. Its authority however, was not gained over time through explicit theory development or argumentation, but was instead “born full grown ” (Staubus, 1999, p. 163)as a conceptual “takeover in the dead of night ” (p. 338). In essence, the concept of decision usefulness assumed a central place as the rationale for accounting choice by stealth rather than by careful argument or based on empirical evidence. The lack of an extended period of argumentation and debate over the meaning of decision usefulness meant its conceptual weaknesses were allowed to remain remarked upon but never resolved. In this paper we argue that as the central focus defining and guiding accounting policy, decision usefulness has not proven any more useful than earlier, allegedly normative theories of accounting did. The recent debates on IFRS versus GAAP provide vivid testament to the inadequacy of decision usefulness as a criterion for selecting among alternative accounting choices. We briefly examine the history of decision usefulness and its emergence as the chief criterion for selecting policy. We then argue that in light of recent developments in our

The small number of full-scale adoptions of activity-based costing (ABC) coupled with ABC implementation failures have fueled a debate about the costs and benefits of ABC relative to more traditional volume-based costing (VBC) systems. ABC differs from VBC by focusing attention on activities and resources that are under the control of multiple workers. Reducing these costs often requires a coordinated effort. Therefore, incentives that motivate workers to cooperate are a prerequisite to successful process improvements based on ABC. Alternatively, when competitive incentives are combined with ABC, the result can be unexpected and negative. We examine how accounting cost system and incentive structure choices interact. We find that profits are highest when ABC is linked with group-based incentives, which provide high motivation to cooperate. In contrast, the lowest level of profit occurs when the same information-rich cost system, ABC, is coupled with tournament-based incentives. VBC, a cost system that provides a lower level of cost driver information, moderates the incentive effect. Thus, our results demonstrate that the effectiveness of ABC relative to traditional VBC is influenced by its interactive effect with incentive compensation.