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The effect of accounting knowledge and information presentation format on performance in multiattribute decision-making task
Abstract
Developments in information systems technology make graphic presentations of accounting information a practical alternative to the traditional tabular presentations. Accountants want to know how their presentation choices will affect user judgment. However, our understanding of the effects of various information presentations on judgment and decision making are limited. This research relies on the cognitive processing theory of induction and cognitive fit theory to examine whether the level of accounting knowledge affects a decision maker's performance when using a graphical information presentation to perform a multiattribute accounting decision-making task. Specifically this study uses a bankruptcy prediction task. Cognitive fit theory and cognitive induction theory are used together to develop a model of cognitive fit that includes accounting knowledge, an individual characteristic, as a component. While prior information presentation research suggests that cognitive fit is only influenced by the task and problem representation, this research argues that accounting knowledge also has a significant effect. Cognitive induction theory posits that existing knowledge structures stored in a decision-maker's memory influence how external cues are combined with information available in memory to form a mental model of the problem. Accounting knowledge is likely to include both the double-entry representation for ex post accounting events and the skeletal forms of the traditional financial statements and analytical judgment strategies that are developed through problem solving tasks in the formal accounting education process. Therefore, this study argues that accounting knowledge interferes with the individual's ability to form a mental representation of the problem that provides a cognitive fit with graphical information presentations. A laboratory experiment is conducted with a 2 x 2 between subjects factorial design obtained by crossing accounting knowledge (low vs. high) with information presentation (tabular vs. graphical). Hypotheses were made for the performance measures of accuracy, efficiency and confidence. The study extends the extant information presentation research. It provides a more complete understanding of cognitive fit by incorporating the individual characteristic of accounting knowledge into the model. The results indicate the low accounting knowledge subjects using graphical information presentations made more accurate bankruptcy predictions than those low knowledge subjects using tabular information presentations. However, there were no significant differences in the accuracy of the bankruptcy predictions between the high accounting knowledge subjects using graphical information presentations and the high accounting knowledge subjects using tabular information presentations. There were no significant results for the efficiency and confidence hypotheses.
Subject Area
Accounting|Cognitive psychology
Recommended Citation
Strong, Joel Matthew, "The effect of accounting knowledge and information presentation format on performance in multiattribute decision-making task" (1999). ETD collection for University of Nebraska-Lincoln. AAI9936774.
https://digitalcommons.unl.edu/dissertations/AAI9936774