Article 4, Volume 4 Issue 2

Virtues of integrity and veracity in reporting, data alone is not enough. A case study approach

Author

Natàlia Cugueró-Escofet – (Universitat Oberta de Catalunya)

Núria Villaescusa Serrano – (IESE B.S., Universidad de Navarra)

Received April 24, 2018; accepted May 25, 2018.

Abstract

One of the claims made in reporting is that firms should publish more information, both quantitative and qualitative. The annual reports of companies are thought precisely to fulfill this function: allowing the ones who have any type of interest in companies to be aware of the data, both quantitative and qualitative (in the form of annual reports). In this paper, we argue that data alone is not enough. We use the case of the company Fish&Fish, Inc. to show that the problem goes beyond the data itself. The most well calculated data and the most detailed reports could be insufficient to deter future ethical misbehaviors or to perform ethical behavior for the stakeholders. We argue that data must be complemented with several ethical virtues: integrity on the managerial part, veracity in the way reports are written. These two should also be complemented with justice, meaning that balancing several interests that parties have at the same time and managing the way integrity and veracity needs to be implemented in reporting decisions. Looking at Fish&Fish, Inc. we show that the main problems was the lack of veracity and integrity in the reporting that may mask present or future fraud.

Una de las afirmaciones hechas en los informes es que las empresas deberían publicar más información, tanto cuantitativa como cualitativa. Se cree que los informes anuales de las empresas cumplen precisamente esta función: permitir que quienes tienen algún tipo de interés en las empresas conozcan los datos, tanto cuantitativos como cualitativos (en forma de informes anuales). En este artículo, sostenemos que los datos por sí solos no son suficientes. Utilizamos el caso de la empresa Fish & Fish, Inc. para mostrar que el problema va más allá de los datos en sí. Los datos mejor calculados y los informes más detallados podrían ser insuficientes para disuadir futuros comportamientos éticos o para llevar a cabo un comportamiento ético para las partes interesadas. Argumentamos que los datos deben complementarse con varias virtudes éticas: integridad en la parte gerencial, veracidad en la forma en que se escriben los informes. Estos dos también deben complementarse con justicia, lo que significa que equilibrar varios intereses que las partes tienen al mismo tiempo y gestionar la forma en que la integridad y la veracidad deben implementarse en las decisiones de presentación de informes. Al observar a Fish & Fish, Inc., mostramos que los principales problemas fueron la falta de veracidad e integridad en los informes que pueden enmascarar el fraude presente o futuro.

Citation

Cugueró-Escofet, N., & Villaescusa, N. (2018). Virtues of integrity and veracity in reporting, data alone is not enough. A case study approach. European Accounting and Management Review4(2), 93-110.

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Article 4, Volume 2 Issue 1:

Justice: a sufficient condition for goal congruence in management control systems

Author

Natàlia Cugueró-Escofet – (IESE Business School)

Josep M. Rosanas – (IESE Business School)

Received October 9, 2015; accepted October 19, 2015.

Abstract

Control systems are a fundamental tool in the management process. Management control systems have been judged under the criterion of goal congruence, i.e., on whether the possible rewards given to people when they take specific actions benefit at the same time individuals and the organization as a whole. Often the concept of justice is not included in the analysis. In recent papers, some theoretical developments have shown that the concept of justice is essential to their dynamics, because it has the potential to change the attitudes of people towards the organization and, therefore, their interest in future decisions. But these developments have been essentially conceptual and have not attempted to go beyond theoretical terms. This paper, using a stylized example, tries to show how this framework can be applied in practice. It also attempts to clarify the concept of goal congruence, by distinguishing when it is merely quantitative or qualitative, and when it can be considered ‘ weak ‘ or ‘ strong ‘. Finally, it goes back to the conceptual model of Cugueró-Escofet and Rosanas (2013) and shows how the practical vision of this case adapts to the conceptual analysis offered in their framework, and draws some conclusions.

Los sistemas de control son una herramienta fundamental en el proceso de gestión. Los sistemas de control de gestión se han juzgado según el criterio de congruencia de objetivos, es decir, si las posibles recompensas otorgadas a las personas cuando toman acciones específicas benefician al mismo tiempo a los individuos y a la organización en su conjunto. A menudo, el concepto de justicia no se incluye en el análisis. En trabajos recientes, algunos desarrollos teóricos han demostrado que el concepto de justicia es esencial para su dinámica, ya que tiene el potencial de cambiar las actitudes de las personas hacia la organización y, por lo tanto, su interés en futuras decisiones. Pero estos desarrollos han sido esencialmente conceptuales y no han intentado ir más allá de los términos teóricos. Este documento, utilizando un ejemplo estilizado, intenta mostrar cómo este marco puede aplicarse en la práctica. También intenta aclarar el concepto de congruencia de objetivos, distinguiendo cuándo es meramente cuantitativo o cualitativo, y cuándo puede considerarse “débil” o “fuerte”. Finalmente, vuelve al modelo conceptual de Cugueró-Escofet y Rosanas (2013) y muestra cómo la visión práctica de este caso se adapta al análisis conceptual ofrecido en su marco, y saca algunas conclusiones.

Citation

Cugueró-Escofet, N., & Rosanas, J. M. (2016). Justice: A sufficient condition for goal congruence in management control systems. European Accounting and Management Review2(1), 104-122.

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