Nama: Crystal N.

Rosok
NIM: 142120001

CHAPTER 11
BEHAVIOURAL RESEARCH IN ACCOUNTING
1. The Behavioural Perspective and The Nature of Behavioural Accounting Research
Behavioural research in accounting can be interpreted widely to include financial
accounting, auditing and managerial accounting. The focus of this review has been human
judgement theory (HJT) and the use of thet theory in explaining, predicting and improving
decision making. Research in this area has relied heavily, but not exclusively, on three
models of human information processing: the Brunswik lens model, the process tracing
model, and the probabilistic judgement model. A review of the research evidence
demonstrates that prediction of company failure or distress has been heavily researched
using the lens model. The consistent finding has been that failure is easier to predict than
success and that the issue of disclosure of the prior probability of failure is important to
realism in the task. To a lesser extent, the presentation and format of accounting
information has also been researched using the lens model framework. It is, as yet. Not
possible to formulate an underlying theory as to which formats or modes of presentation
are best in particular circumstance. This question awaits further research.
2. The Contribution to Our Understanding of the Role of Accounting Information Within and
Outside the Accounting Entity Provided by Studying Behaviour
Process tracing methods have revealed that there may be contexts in which decision tree
represantations of human information processing may be more appropriate than the simple
linear combinations of data implied by Brunswik lens models. Process tracing methods are
particularly helpful when there are significant interactions between information cues.
3. The Influence of Accounting Information on Behaviour and on Decision Processes
Within the probabilistic judgement model, auditor judgement has been extensively
researched. Findings reveal that auditors and others use the same rules of thumb as have
been prevalent in research in psychology, although often to a lesser extent. The rules of
thumb of representativeness, availability, and anchoring and adjustment seem to be
adopted in auditing and other business contexts in order to simplify complex judgement

tasks and alleviate limitations in the cognitive processes of humans. Whether the presence
of these rules of thumb reduces the quality of decision making in auditing or accounting
remains in dispute. Auditing, in particular, is an activity where compensating mechanisms,
such as partner review, exist as a means of assuring quality. More research is needed in a
holistic sense in order to assess whether deleterious effects occur from the use of rules of
thumb.
4. The Fact that Organisations are Complex Environments and Accounting Disclosures are
Trade-offs Between Competing Perspectives and Interest
Accounting exists as a direct function of the activities of individuals or groups of
individuals (defined as accounting entities). Consideration needs to be given to the
complex environment in which accountants operate and the competing demands for and of
accounting information.
For example, disclosing environmental information and likely cost of an
environmental clean-up by an organisation may lead to support from environmental lobby
groups; however, it may also attract a very different response from shareholder groups,
who may take the view that the company is expending excessive resuorces to appease
marginal interest groups.
5. The Inherent Constraints on Behavioral Research
Behavioural researches and accounting practitioners need to recognise the complex nature
of the users and uses of accounting information, and the influence of these users on
accounting practice and disclosure.