Spatial Distance and Risk Category Effects in Enterprise Risk Management Practice-Reference-Cited by-同舟云学术

Spatial Distance and Risk Category Effects in Enterprise Risk Management Practice

Published:2022-04-26 Issue:3 Volume:34 Page:119-139
ISSN:1558-8033
Container-title:Journal of Management Accounting Research
language:en
Short-container-title:

Author:

Fehrenbacher Dennis¹²,Sutton Steve G.³⁴^ORCID,Weisner Martin M.⁵^ORCID

Affiliation:

1. Monash University

2. University of St.Gallen

3. NHH Norwegian School of Economics

4. University of Central Florida

5. The University of Melbourne

Abstract

ABSTRACT Research suggests corporate board members would like to receive more information about how risk probabilities are estimated. We examine how spatial distance from a risk assessment target and risk category (operational versus non-operational risk factors) affects decision-makers' assessment of the probability that a given risk will materialize. Results from an experiment involving 141 risk managers provide some support for spatial distance effects. Importantly, we find the difference in decision-makers' probability assessments between operational and non-operational risk factors is greater when assessing a proximate rather than a remote target. We contribute to the accounting literature by demonstrating how spatial distance affects probability judgments. This is important as probability judgments are not only prevalent in managerial decision-making contexts but also in audit, tax, and other settings where decision-targets may be spatially removed from the decision-maker.

Funder

Institute of Management Accountants

Publisher

American Accounting Association

Subject

Accounting,Business and International Management

Link

https://publications.aaahq.org/jmar/article-pdf/34/3/119/83288/i1558-8033-34-3-119.pdf

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