Professor Emeritus, Managerial Accounting and Control
- Faculty Director, HBA International Opportunities
David J. Sharp is an emeritus professor of Managerial Accounting and Control at Ivey Business School. Before joining Ivey, Sharp taught at Boston College. He worked for an electrical engineering company and in sales research at a business systems company in his native England prior to teaching business studies for five years in the Middle East. He studied Engineering Science and Economics at Oxford University, and has a Masters degree in Management from the University of Manchester Institute of Science and Technology. He earned his Ph.D in International Management at the MIT Sloan School in 1987.
Sharp's research interests centre around international management accounting and management decision-making issues. Presently, he is interested in cross-cultural differences in risky decision-making, international business ethics, and the role of control systems in promoting moral behaviour in organizations.
He teaches Managerial Accounting and Control and International Accounting in the MBA Program and Executive MBA programs. He also teaches in the Strategic Marketing Management Program, and in the Modular M. Eng program in the Faculty of Engineering.
His publications include scholarly articles in the areas of international financial management, cross-cultural behaviour, and international business ethics. He is on the editorial boards of the Journal of International Accounting, Auditing, and Taxation and The Journal of International Accounting Research, and associate editor of Advances in International Accounting. He is active in the American Accounting Association, and served as president of the International Accounting Section in 2001-2.
Recent Refereed Articles
Salter, S., Sharp, D.J., Chen, Y.,
2013, "The Moderating Effects of National Culture on Escalation of Commitment", Advances in Accounting, June 29(1): 161 - 169.
Abstract: This study tests the cross-cultural sensitivity of three determinants of escalation of commitment: agency conditions, negative framing, and self-justification. A multiple-case experiment, using a sample of 1208 managers and MBA students surveyed over several years in nine countries investigated the moderating effects of national culture. We find that the effect of negative framing on escalation of commitment is significant, but unaffected by differences in national cultures. The adverse selection problem arising from agency predictions has a stronger effect in high-Individualism countries than in low-Individualism countries, and managers in higher Long-term Orientation countries are more likely to escalate projects with potential long-term payoffs.
Link(s) to publication:
Cohen, J., Holder, L., Pant, L., Sharp, D.J.,
2007, "The Effects of Perceived Fairness on Opportunistic Behavior", Contemporary Accounting Research, Winter 24(4): 1119 - 1138.
Abstract: The classic agency model provides the basis for a large number of organizational contracts in the contemporary business environment. However, contracting provisions based on this model may induce undesirable behavior including shifts in employee value systems. Therefore, we explore fairness as a motivator of positive behavior in the contracting environment. Managers were asked to make a cost allocation decision in which we embedded a manipulated information asymmetry (absent or present) and incentives (absent, low, or high). Results indicate that subjects' perception of the fairness of the allocation dominates the agency (monitoring and incentive) effect in determining the intent to act opportunistically. We conclude that researchers and managers should consider fairness as an important element of the opportunity-incentive-action dynamic when the need for contracting around potential agency problems arises.
Downey, A., Sharp, D.J.,
2007, "Why Do Managers Allocate Resources to Workplace Health Promotion Programmes in Countries with National Health Coverage?", Health Promotion International, June 22(2): 102 - 111.
Abstract: There is extensive evidence that worksite health promotion (WHP) programmes reduce healthcare costs and improve employee productivity. In many countries, a large proportion of healthcare costs are borne by the state. While the full benefits of WHP are still created, they are shared between employers and the state, even though the employer bears the full (after-tax) cost. Employers therefore have a lower incentive to implement WHP activity. We know little about the beliefs of managers with decision responsibility for the approval and implementation of WHP programmes in this context. This article reports the results of a study of the attitudes of Canadian senior general managers (GMs) and human resource managers (HRMs) in the auto parts industry in Ontario, Canada towards the consequences of increasing discretionary spending on WHP, using Structural Equation Modelling and the Theory of Planned Behaviour. We identified factors that explain managers' intentions to increase discretionary spending on wellness programmes. While both senior GMs and HRMs are motivated primarily by their beliefs that WHP reduces indirect costs of health failure, GMs were also motivated by their moral responsibility towards employees (but surprisingly HRMs were not). Importantly, HRMs, who usually have responsibility for WHP, felt constrained by a lack of power to commit resources. Most importantly, we found no social expectation that organizations should provide WHP programmes. This has important implications in an environment where the adoption of WHP is very limited and cost containment within the healthcare system is paramount.
Sharp, D.J., Kwok, W.C.C.,
2005, "Power and International Accounting Standard-setting: Evidence from Segment Reporting and Intangible Assets Projects", Accounting Auditing and Accountability Journal 18(1): 74 - 99.
Abstract: Purpose - This study provides significant empirical data and analysis on the international standard-setting process as conducted by the forerunner of the International Accounting Standards Board (IASB). It reveals the influences from four key stakeholder groups (users, preparers, accountants, and regulators) in order to ascertain why International Accounting Standards (IAS) turn out the way they do. Design/methodology/approach - In-depth interviews with board representatives and content analysis of documents were used to provide triangulating perspectives. The concept of power from the sociological and political science literature provides the theoretical lens. The standard setting projects on segment reporting and intangible assets were studied in detail. Findings - The results show that the process can be best characterized as a mixed power system where no party is accorded the absolute power potential to dictate IAS. Nonetheless, while the user group is the target beneficiaries of IAS, the preparer group has significant influence, as inferred from the changes made to the IAS in line with the preparers' preferences. Research limitations/implications - There is always the possibility of researchers missing out on "secret" exercise of power, given that the focus of this study was on "public" paths of influence. After this study, the IASB's meetings became open to public, providing new opportunities for future research. Originality/value - This paper contributes to understanding accounting standard setting for international harmonization.
Baetz, M., Sharp, D.J.,
2004, "Integrating Ethics into the Core Business Curriculum: Do Core Teaching Materials do the Job?", Journal of Business Ethics, April 51(1): 53 - 62.
Abstract: Some business schools have integrated business ethics issues into their core functional courses rather than simply offering a separate ethics course. To accommodate such a strategy, functional faculty members usually teach ethical issues, a task for which they are rarely trained. However, learning materials are available: some core course textbooks provide additional coverage of ethics, and case studies (and accompanying teaching notes for instructors) are also available which cover ethical issues.
This paper reports on an analysis of these materials. We find that a sample of the leading textbooks provides only very superficial coverage of ethical issues. Cases provide a wide range of issues suitable for class discussion, but their teaching notes in many cases provide little guidance for instructors unfamiliar with teaching ethics. Thus there remains a need for teaching resources for business faculty new to teaching ethics.
Cohen, J., Pant, L., Sharp, D.J.,
2002, "Cross-Cultural Differences in the Perceived Morality of Accounting Manipulation: The Effect of Acculturation", Review of Accounting and Finance, September 1(3): 15 - 27.
Abstract: In a world of increasingly global commerce, individual managers frequently migrate permanently to a new place of work. Over time, they acculturate they learn and acquire the values of their host culture. The differences between national cultures norms concerning the morality of questionable (by North American norms) accounting practices, and the ways in which individuals beliefs about the morality of such action change as they settle into a new culture, are not well understood.
Sharp, D.J., Salter, S.,
2001, "Agency Effects and Escalation of Commitment: Do Small National Culture Differences Matter?", International Journal of Accounting 36(1): 33 - 45.
Abstract: In order to test for hypothesized effects of national culture on management control systems with a cost-effective sample size, most cross-cultural studies rely on large difference in culture in their experimental design. However, much of the world's cross-border investment takes place between nations that are culturally close, for example, the USA, Canada and the UK. Case evidence indicates that even apparently small cultural differences, such as that between the USA and Canada, can be particularly troublesome since it is widely assumed that small differences do not matter, when, in fact, they do. This study explores the effect of an apparently small difference in national culture on the ability of agency theory to explain escalation of commitment to failing projects in two countries with significant cross-border investment. We found that the effect of adverse selection conditions was significantly stronger among managers from the more individualist USA. We also found that more experienced managers were less likely to escalate commitment. We discuss the implications of this finding for the design of control systems in US-Canada cross-border subsidiaries.
Sharp, D.J., Cohen, J., Pant, L.,
2001, "An Examination of Differences in Ethical Decision-Making between Canadian Business Students and Accounting Professionals", Journal of Business Ethics 30(4): 319 - 336.
Abstract: This study investigates the differences in individuals' ethical decision making between Canadian university business students and accounting professionals. It examines the differences in 3 measures known to be important in the ethical decision-making process: ethical awareness, ethical orientation, and intention to perform questionable acts. Differences in these three measures were tested in 8 different questionable actions among 3 groups: students starting business studies, those in their final year of university, and professional accountants. The implications of the findings for professional training and future research are discussed.
Sharp, D.J., Cohen, J., Pant, L.,
2000, "Project Earnings Management: An Ethics Case Based on Agency Theory ", Issues in Accounting Education 15(1): 89 - 104.
Abstract: The impact of accounting information on ethical behavior has been extensively documented. Additionally, agency theory is a widely accepted behavioral perspective. Despite this, there is an absence of instructional material in the accounting education literature that ties ethical issues to an agency-theory context. The primary objective of this case is to highlight control system ethical issues using an agency-theory context. Students explore their own reactions to a prohibited but unmonitored cost allocation action. Thus, this case is positioned to fill this void in any accounting course that covers agency theory or management control systems.
Sharp, D.J., Pant, L., Cohen, J.,
1998, "Are Women Held to a Higher Moral Standard Than Men? Gender Bias Among University Students", Teaching Business Ethics 22(2): 197 - 209.
Abstract: This study examines gender bias in ethical decision-making, defined as a difference in the evaluation of the morality of an action depending on the gender of the person performing the action. Results indicate that college student respondents exhibited some degree of gender bias, and that it was especially noticeable among the male respondents. Bias was somewhat more pronounced among liberal arts majors than other business majors, and non- existent among accounting majors. Implications for early-career professional training and business ethics research are discussed.
Cohen, J., Pant, L., Sharp, D.J.,
1998, "The Effect of Gender and Academic Discipline Diversity on the Ethical Evaluations, Ethical Intentions and Ethical Orientation of Potential Public Accounting Recruits", Accounting Horizons, September 12(3): 250 - 270.
Abstract: The increased diversity arising from hiring women and nonaccounting majors by public accounting firms presents challenges for the professional development and training of new recruits. If the ethical judgment of women and students from nonaccounting disciplines differs from the traditional male-dominated accounting professionals and these differences are not addressed in early professional training programs, this could represent possible challenges to the training and socialization of new recruits entering the profession. This study tests for gender and discipline-based differences in ethical evaluations, ethical intention and ethical orientation among subjects from the disciplines of accounting, other business and liberal arts. Results indicate that women had consistently different ethical evaluations, intentions and orientation than men and there is some evidence that subjects from the accounting discipline viewed some actions from a different ethical perspective than subjects from other disciplines. Implications for accounting ethics, early-career professional training and ethics research are discussed.
Kwok, W.C.C., Sharp, D.J.,
1998, "A Review of Construct Measurement Issues in Behavioral Accounting Research", Journal of Accounting Literature (17): 137 - 174.
Abstract: Although the last 3 decades have seen a growing interest in behavioral accounting research, it is still an emerging field (Burgstahler and Sundem, 1989). A key methodological concern in behavioral accounting research is good construct measurement. A study focuses on construct measurement in questionnaire-based behavioral research. The objective is to provide a convenient summary of measurement criteria and an inventory of constructs and their heredity as a resource for new and established behavioral accounting researchers. The current psychology, sociology and related literatures are reviewed to provide a benchmark for state-of-the-art construct measurement. Compared to this benchmark, inconsistent use of measures and inadequate reporting of results in recent questionnaire-based behavioral accounting research is found, which, it is believed, inhibit the development of a coherent body of knowledge. From this review and evaluation, recommendations for future behavioral accounting research are provided. State-of-the-art measurement methods from other literatures relevant to questionnaire studies are reviewed. A classified, annotated inventory of constructs used in recent behavioral accounting research is provided and its construction is explained. An analysis of the extent to which this inventory meets a benchmark is reported. Specific recommendations for the methodological design and publication of behavioral accounting and publication of behavioral accounting studies are provided.
Sharp, D.J., Salter, S.,
1997, "Project Escalation and Sunk Costs: A Test of the International Generalizability of Agency and Prospect Theories", Journal of International Business Studies, April 28(1): 101 - 121.
Abstract: Previous North American research suggests that aspects of agency theory and prospect theory may explain decisions to escalate commitment to failing projects. This study explores the universality of these theories in this context. The willingness of North American and Asian managers to escalate commitment to losing projects was measured using four go/no-go decision cases. We hypothesized that Asian managers would be less willing to act in their self-interest (a lower agency effect), and would be more willing to escalate a decision in the face of negative framing (a stronger framing effect). We found that agency theory had strong explanatory power for project in our Asian sample. Framing effects were significant in both, but they were not significantly different.
Cohen, J., Pant, L., Sharp, D.J.,
1996, "A Methodological Note on Cross-Cultural Accounting Ethics Research", International Journal of Accounting, January 31(1): 55 - 66.
Abstract: Predicting international differences in ethical behavior is important for multinational accounting firms. This note reports an empirical test of the usefulness of Hofstede's five dimensions of culture to predict cross-cultural differences in ethical sensitivity. A small-sample survey of academic experts in cross-cultural management research in accounting and other business disciplines demonstrated that Power Distance and Confucian Dynamism were expected to be consistently related to ethical judgment in a series of eight accounting-related ethical vignettes, while Individualism showed strong effects, its direction depended on the nature of the ethical dilemma described in the vignette. Over all of the experts, there was statistically significant consensus. Implications of the findings for the research design of cross-cultural accounting ethics studies is also discussed.
Cohen, J., Pant, L., Sharp, D.J.,
1996, "Measuring the Ethical Awareness and Ethical Orientation of Canadian Auditors", Behavioral Research in Accounting 8: 98 - 119.
Abstract: This paper relates the multidimensional ethics scale and factor analysis method of Reidenbach and Robin (1990), Florey et al (1992), and Cohen et al (1993) to Rest's (1986) four-component model of ethical decision-making. We believe that the scale items and factor scores measure moral awareness, the first of Rest's four components. Using a sample of Canadian auditing professionals, we demonstrate how the regression coefficient of ethical evaluation on these individual factor scores measures respondents' ethical evaluation of the importance of various criteria, which corresponds to Rest's second component (making a moral judgment), and that the importance and awareness measures differ. We believe that this measure of importance is related to moral development, and therefore could be related to the Defining Issues Test (a commonly used measure of moral development in accounting ethics research). We suggest that these previously independent approaches to measuring individual morality could be integrated in future studies. Finally, we discuss the implications of our findings for behavioral accounting ethics research.
- Associate Professor, Ivey Business School, Western University
- Assistant Professor, Carroll School of Management, Boston College
- Lecturer, Gulf Polytechnic, State of Bahrain, Middle East
- Visiting Professor: Johannes Kepler University, Linz, Austria
- Visiting Professor: Asian Institute of Management, Manila, Philippines
- Visiting Professor: Czech Management Center, Czech Republic
- Adjunct Assistant Professor, Fletcher School of Law and Diplomacy, Tufts University
- R&D Officer, Kalamazoo Business Systems, UK
- Ethics in accounting
- International Accounting
- Management Control Systems