Faculty Publications

Use Of Discretionary Environmental Accounting Narratives To Influence Stakeholders: The Case Of Jurors’ Award Assessments

Document Type

Article

Keywords

Discretionary environmental accounting narratives, Environmental sensitivity, Political ideology, Punitive damage award, Trust

Journal/Book/Conference Title

Journal of Business Ethics

Volume

129

Issue

3

First Page

673

Last Page

688

Abstract

This experimental study extends prior capital market and environmental accounting research by utilizing the theoretical underpinnings of legitimation through impression management, source credibility bias, perceived trust, and ideology in assessing the influence of discretionary environmental accounting narratives on jurors’ punitive damage award assessments. We utilize mock jurors as environmental stakeholders and find that: (1) jurors in a court case involving corporate environmental malfeasance assess lower punitive damage awards against a firm that provides discretionary disclosure on its website regarding future abatement and control narratives, (2) environmental sensitivity of the firm’s industry moderates the negative relationship between the discretionary disclosure and jurors’ punitive damage award assessments, and (3) juror’s perceived trust toward firm management mediates the prior moderation effect. Further, juror political ideology is found to affect the punitive damage award assessments, with liberal jurors levying comparatively higher awards than conservative jurors.

Department

Department of Accounting

Original Publication Date

7-19-2015

DOI of published version

10.1007/s10551-014-2191-y

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