Abstract
This paper is an empirical testing of the association between Cost Standard-Setting (PSS) on Work Performance (WP), mediated With Information Asymmetry (IA), and Goal Complexity (GC). It is a rule of thumb that PSS setting can lower the level of IA and GC between the managers and the employees and leads to better WP. The present work uses a path model to measure the direct, indirect, and spurious effect between the dependent and independent variables of this study. Data were collected from ten corporate firms in Iraq via a pre-designed questionnaire survey, the questionnaire forms were distributed randomly to the firm’s top management personnel, departmental managers, engineers, accountants, and administrators who are involved in PSS. Around 350 forms were distributed for data collection, however, only 198 forms were considered for this analysis, the rest of the forms were discarded due to incompleteness or missing values. The findings of the study showed a significant direct effect of PSS on WP. Likewise, there was clear evidence of an indirect effect via the mediating variables (IA and GC). The influence of IA and GC confirms the strong association between the independent variable (PSS) on the dependent variable (WP).
Highlights
Cost standards are a predetermined target that should be met at the end of the accounting period
The direct effect of Participation in cost standard-setting (PSS) on Goal complexity (GC) was 0.208 and Information asymmetry (IA) on Work performance (WP) was 0.217. This result is empirical evidence to accept the second hypothesis “IA has a positive relationship with WP”
The rest were found significant at a 1% level, i.e. PSS on IA (0.331), the impact of IA on GC (0.444), and GC on WP (0.495)
Summary
Cost standards are a predetermined target that should be met at the end of the accounting period. Managerial accounting literature has a rich history in examining participation and performance (Lau and Eggleton, 2003; Yucel and Gunluk, 2007; Leach-Lopez et al, 2008 & 2009; Ozer and Yilmaz, 2011; Odia, 2013; Mah'd et al, 2013; Mazzioni et al, 2014; Hussein et al, 2016; Ahn et al, 2018; Sim and Utami, 2018; Berdicchia and Masino, 2019; Zainuddin and Isa, 2019; Lunardi et al, 2020). The researcher contributes to the existing literature by introducing and examining the relationship between PSS and WP through GC and IA for a sample of Iraqi corporate firms, the study, used a path model to explain the direct and indirect effect between PSS and WP. Section five provides the concluding remarks shedding light on the limitations of the study and the suggestions for future research
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