IDEAS home Printed from https://ideas.repec.org/a/wly/accper/v14y2015i1p1-50.html
   My bibliography  Save this article

Judgment and Decision‐Making Research in Auditing and Accounting: Future Research Implications of Person, Task, and Environment Perspective

Author

Listed:
  • Rajni Mala
  • Parmod Chand

Abstract

The discipline of accounting and auditing has increasingly recognized judgment and decision making (JDM) as highly important attributes in the profession because individuals such as managers, auditors, financial analysts, accountants, and standard setters make pivotal judgments and decisions. Many studies undertaken in this domain of research also substantiate the significance of JDM in accounting and auditing. This study evaluates all the papers published in 10 accounting journals among the leading ones from 1980 to 2010 that fall within the domain of JDM research. The categorization of the studies reviewed in this paper is based on Bonner's () three major determinants of JDM: Person, Task, and Environment variables. The review highlights the progress in the literature over the past three decades and also identifies the methodological limitations of previous research. The identified limitations will be useful for improving the research method of future JDM studies in accounting and auditing. The review also draws inferences on how JDM research in auditing, which is well established, could usefully guide future JDM research in financial accounting. RECHERCHES SUR LE JUGEMENT ET LA PRISE DE DÉCISIONS EN AUDIT ET EN COMPTABILITÉ: RÉPERCUSIONS SUR LES TRAVAUX FUTURS DE LA PERSPECTIVE PERSONNE–TÂCHE–ENVIRONNEMENT Résumé Les disciplines de la comptabilité et de l'audit reconnaissent plus que jamais l'importance capitale des attributs de la profession que sont le jugement et la prise de décisions, compte tenu de l'incidence déterminante des jugements que portent les gestionnaires, les auditeurs, les analystes financiers, les comptables et les autorités de réglementation, ainsi que des décisions qu'ils prennent. Maintes études réalisées dans ce champ de recherche confirment aussi l'importance du jugement et de la prise de décisions en comptabilité et en audit. Les auteurs évaluent ici tous les travaux parus entre 1980 et 2010 dans dix publications comptables de premier plan et portant sur des sujets qui relèvent de ce champ de recherche. Le classement des travaux étudiés par les auteurs repose sur les trois principaux déterminants du jugement et de la prise de décisions selon Bonner (1999), soit les variables de la personne, de la tâche et de l'environnement. L’étude fait ressortir l’évolution des travaux publiés au cours des trois dernières décennies et met également en évidence les limites méthodologiques de ces travaux. La recension de ces limites permettra d'améliorer les méthodes de recherche qui seront utilisées dans les travaux à venir sur le jugement et la prise de décisions en comptabilité et en audit. Les auteurs tirent également des conclusions quant à la façon dont la recherche sur le jugement et la prise de décisions en audit, dont les assises sont solides, pourrait orienter utilement la recherche sur le jugement et la prise de décisions en comptabilité générale.

Suggested Citation

  • Rajni Mala & Parmod Chand, 2015. "Judgment and Decision‐Making Research in Auditing and Accounting: Future Research Implications of Person, Task, and Environment Perspective," Accounting Perspectives, John Wiley & Sons, vol. 14(1), pages 1-50, March.
    • Handle: RePEc:wly:accper:v:14:y:2015:i:1:p:1-50
    DOI: 10.1111/1911-3838.12040
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1911-3838.12040
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1911-3838.12040?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dunk, Alan S., 2007. "Innovation budget pressure, quality of IS information, and departmental performance," The British Accounting Review, Elsevier, vol. 39(2), pages 115-124.
    2. Anderson, Ronald C. & Mansi, Sattar A. & Reeb, David M., 2004. "Board characteristics, accounting report integrity, and the cost of debt," Journal of Accounting and Economics, Elsevier, vol. 37(3), pages 315-342, September.
    3. Jefim Efrim Boritz, 1985. "The effect of information presentation structures on audit planning and review judgments," Contemporary Accounting Research, John Wiley & Sons, vol. 1(2), pages 193-218, March.
    4. Klersey, George F. & Mock, Theodore J., 1989. "Verbal protocol research in auditing," Accounting, Organizations and Society, Elsevier, vol. 14(1-2), pages 133-151, January.
    5. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    6. DeZoort, Todd & Harrison, Paul & Taylor, Mark, 2006. "Accountability and auditors' materiality judgments: The effects of differential pressure strength on conservatism, variability, and effort," Accounting, Organizations and Society, Elsevier, vol. 31(4-5), pages 373-390.
    7. Harper, Rm & Mister, Wg & Strawser, Jr, 1987. "The Impact Of New Pension Disclosure Rules On Perceptions Of Debt," Journal of Accounting Research, Wiley Blackwell, vol. 25(2), pages 327-330.
    8. Frederick, Dm & Libby, R, 1986. "Expertise And Auditors Judgments Of Conjunctive Events," Journal of Accounting Research, Wiley Blackwell, vol. 24(2), pages 270-290.
    9. Trotman, Ken T. & Sng, Jennifer, 1989. "The effect of hypothesis framing, prior expectations and cue diagnosticity on auditors' information choice," Accounting, Organizations and Society, Elsevier, vol. 14(5-6), pages 565-576, October.
    10. Kathryn Kadous & Lisa Koonce & Kristy L. Towry, 2005. "Quantification and Persuasion in Managerial Judgement," Contemporary Accounting Research, John Wiley & Sons, vol. 22(3), pages 643-686, September.
    11. Hoffman, VB & Patton, JM, 1997. "Accountability, the dilution effect, and conservatism in auditors' fraud judgments," Journal of Accounting Research, Wiley Blackwell, vol. 35(2), pages 227-237.
    12. Mcdaniel, Ls, 1990. "The Effects Of Time Pressure And Audit Program Structure On Audit Performance," Journal of Accounting Research, Wiley Blackwell, vol. 28(2), pages 267-285.
    13. Soo Young Rieh, 2002. "Judgment of information quality and cognitive authority in the Web," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 53(2), pages 145-161.
    14. Brown, Grant A. & Collins, Roger & Thornton, Daniel B., 1993. "Professional judgment and accounting standards," Accounting, Organizations and Society, Elsevier, vol. 18(4), pages 275-289, May.
    15. Christine E. Earley, 2002. "The Differential Use of Information by Experienced and Novice Auditors in the Performance of Ill†Structured Audit Tasks," Contemporary Accounting Research, John Wiley & Sons, vol. 19(4), pages 595-614, December.
    16. Maines, LA & McDaniel, LS & Harris, MS, 1997. "Implications of proposed segment reporting standards for financial analysts' investment judgments," Journal of Accounting Research, Wiley Blackwell, vol. 35, pages 1-24.
    17. Messier, Wf, 1983. "The Effect Of Experience And Firm Type On Materiality Disclosure Judgments," Journal of Accounting Research, Wiley Blackwell, vol. 21(2), pages 611-618.
    18. Tan, HT & Kao, A, 1999. "Accountability effects on auditors' performance: The influence of knowledge, problem-solving ability, and task complexity," Journal of Accounting Research, Wiley Blackwell, vol. 37(1), pages 209-223.
    19. E. Michael Bamber & Joseph H. Bylinski, 1987. "The effects of the planning memorandum, time pressure and individual auditor characteristics on audit managers' review time judgments," Contemporary Accounting Research, John Wiley & Sons, vol. 4(1), pages 127-143, September.
    20. Glover, SM, 1997. "The influence of time pressure and accountability on auditors' processing of nondiagnostic information," Journal of Accounting Research, Wiley Blackwell, vol. 35(2), pages 213-226.
    21. Bonner, Se & Lewis, Bl, 1990. "Determinants Of Auditor Expertise," Journal of Accounting Research, Wiley Blackwell, vol. 28, pages 1-20.
    22. Christopher Humphrey, 2008. "Auditing research: a review across the disciplinary divide," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(2), pages 170-203, February.
    23. Kathryn Kadous & Anne M. Magro, 2001. "The Effects of Exposure to Practice Risk on Tax Professionals' Judgements and Recommendations," Contemporary Accounting Research, John Wiley & Sons, vol. 18(3), pages 451-475, September.
    24. Arnold Wright & Sally Wright, 1996. "The Relationship Between Assessments of Internal Control Strength and Error Occurrence, Impact and Cause," Accounting and Business Research, Taylor & Francis Journals, vol. 27(1), pages 58-71.
    25. Peecher, ME, 1996. "The influence of auditors' justification processes on their decisions: A cognitive model and experimental evidence," Journal of Accounting Research, Wiley Blackwell, vol. 34(1), pages 125-140.
    26. Libby, Robert & Luft, Joan, 1993. "Determinants of judgment performance in accounting settings: Ability, knowledge, motivation, and environment," Accounting, Organizations and Society, Elsevier, vol. 18(5), pages 425-450, July.
    27. Chan, Kam C. & Chan, Kam C. & Seow, Gim S. & Tam, Kinsun, 2009. "Ranking accounting journals using dissertation citation analysis: A research note," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 875-885, August.
    28. Gibbins, M & Newton, Jd, 1994. "An Empirical Exploration Of Complex Accountability In Public Accounting," Journal of Accounting Research, Wiley Blackwell, vol. 32(2), pages 165-186.
    29. Butler, Sa, 1985. "Application Of A Decision Aid In The Judgmental Evaluation Of Substantive Test Of Details Samples," Journal of Accounting Research, Wiley Blackwell, vol. 23(2), pages 513-526.
    30. Bonner, Sarah E., 1994. "A model of the effects of audit task complexity," Accounting, Organizations and Society, Elsevier, vol. 19(3), pages 213-234, April.
    31. Jeffrey Cohen & Ganesh Krishnamoorthy & Arnold M. Wright, 2002. "Corporate Governance and the Audit Process," Contemporary Accounting Research, John Wiley & Sons, vol. 19(4), pages 573-594, December.
    32. Hun†Tong Tan & Jackson Yip†Ow, 2001. "Are Reviewers' Judgements Influenced by Memo Structure and Conclusions Documented in Audit Workpapers?," Contemporary Accounting Research, John Wiley & Sons, vol. 18(4), pages 663-678, December.
    33. Solomon, Ira & Trotman, Ken T., 2003. "Experimental judgment and decision research in auditing: the first 25 years of AOS," Accounting, Organizations and Society, Elsevier, vol. 28(4), pages 395-412, May.
    34. Butt, Jl, 1988. "Frequency Judgments In An Auditing-Related Task," Journal of Accounting Research, Wiley Blackwell, vol. 26(2), pages 315-330.
    35. Stocks, Morris H. & Harrell, Adrian, 1995. "The impact of an increase in accounting information level on the judgment quality of individuals and groups," Accounting, Organizations and Society, Elsevier, vol. 20(7-8), pages 685-700.
    36. Frederickson, JR & Peffer, SA & Pratt, J, 1999. "Performance evaluation judgments: Effects of prior experience under different performance evaluation schemes and feedback frequencies," Journal of Accounting Research, Wiley Blackwell, vol. 37(1), pages 151-165.
    37. Cynthia Williams Turner, 2001. "Accountability Demands and the Auditor’s Evidence Search Strategy: The Influence of Reviewer Preferences and the Nature of the Response (Belief vs. Action)," Journal of Accounting Research, Wiley Blackwell, vol. 39(3), pages 683-706, December.
    38. Hoffman, Vicky B. & Joe, Jennifer R. & Moser, Donald V., 2003. "The effect of constrained processing on auditors' judgments," Accounting, Organizations and Society, Elsevier, vol. 28(7-8), pages 699-714.
    39. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    40. Ashton, Rh & Kramer, Ss, 1980. "Students As Surrogates In Behavioral Accounting Research - Some Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 1-15.
    41. Wright, Arnold, 1988. "The impact of prior working papers on auditor evidential planning judgments," Accounting, Organizations and Society, Elsevier, vol. 13(6), pages 595-605, October.
    42. Libby, Robert & Lewis, Barry L., 1982. "Human information processing research in accounting: The state of the art in 1982," Accounting, Organizations and Society, Elsevier, vol. 7(3), pages 231-285, July.
    43. Trotman, Kt & Yetton, Pw, 1985. "The Effect Of The Review Process On Auditor Judgments," Journal of Accounting Research, Wiley Blackwell, vol. 23(1), pages 256-267.
    44. Terence Bu†Peow NG & Hun†Tong Tan, 2007. "Effects of Qualitative Factor Salience, Expressed Client Concern, and Qualitative Materiality Thresholds on Auditors' Audit Adjustment Decisions," Contemporary Accounting Research, John Wiley & Sons, vol. 24(4), pages 1171-1192, December.
    45. Butt, Jane L. & Campbell, Terry L., 1989. "The effects of information order and hypothesis-testing strategies on auditors' judgments," Accounting, Organizations and Society, Elsevier, vol. 14(5-6), pages 471-479, October.
    46. Jennifer R. Joe, 2003. "Why Press Coverage of a Client Influences the Audit Opinion," Journal of Accounting Research, Wiley Blackwell, vol. 41(1), pages 109-133, March.
    47. Boritz, Je, 1986. "The Effect Of Research Method On Audit Planning And Review Judgments," Journal of Accounting Research, Wiley Blackwell, vol. 24(2), pages 335-348.
    48. Blocher, Edward & Moffie, Robert P. & Zmud, Robert W., 1986. "Report format and task complexity: Interaction in risk judgments," Accounting, Organizations and Society, Elsevier, vol. 11(6), pages 457-470, October.
    49. Erickson, M & Mayhew, BW & Felix, WL, 2000. "Why do audits fail? Evidence from Lincoln Savings and Loan," Journal of Accounting Research, Wiley Blackwell, vol. 38(1), pages 165-194.
    50. Hirst, DE & Hopkins, PE, 1998. "Comprehensive income reporting and analysts' valuation judgments," Journal of Accounting Research, Wiley Blackwell, vol. 36, pages 47-75.
    51. Kida, T, 1984. "The Impact Of Hypothesis-Testing Strategies On Auditors Use Of Judgment Data," Journal of Accounting Research, Wiley Blackwell, vol. 22(1), pages 332-340.
    52. Christopher Nobes, 2006. "The survival of international differences under IFRS: towards a research agenda," Accounting and Business Research, Taylor & Francis Journals, vol. 36(3), pages 233-245.
    53. Phillips, F, 1999. "Auditor attention to and judgments of aggressive financial reporting," Journal of Accounting Research, Wiley Blackwell, vol. 37(1), pages 167-189.
    54. Kennedy, J, 1993. "Debiasing Audit Judgment With Accountability - A Framework And Experimental Results," Journal of Accounting Research, Wiley Blackwell, vol. 31(2), pages 231-245.
    55. Waller, William S. & Felix, William Jr., 1984. "The auditor and learning from experience: Some conjectures," Accounting, Organizations and Society, Elsevier, vol. 9(3-4), pages 383-406, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ionela-Corina CHERSAN, 2019. "Audit Quality and Several of Its Determinants," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(153), pages 1-93.
    2. Skare, Marinko & Gavurova, Beata & Polishchuk, Volodymyr, 2023. "A decision-making support model for financing start-up projects by venture capital funds on a crowdfunding platform," Journal of Business Research, Elsevier, vol. 158(C).
    3. Stefan Schiller, 2017. "The Quest for Rationality: Chief Financial Officers’ and Accounting Master’s Students’ Perception of Economic Rationality," SAGE Open, , vol. 7(2), pages 21582440177, April.
    4. Claudine Mangen & Alexia Paduano & Bianca Paduano & Jessica Hadzurik & Juliano Leggio & Kayla Russo, 2020. "Smoke and Mirrors? Disclosures in the Marijuana Industry in Canada," Accounting Perspectives, John Wiley & Sons, vol. 19(3), pages 149-179, September.
    5. Hazianti Abdul Halim & Hartini Jaafar & Sharul Effendy Janudin, 2018. "Factors Influencing Professional Judgment of Auditors in Malaysia," International Business Research, Canadian Center of Science and Education, vol. 11(11), pages 119-127, November.
    6. Hartwig, Fredrik & Landström, Mats & Sörqvist, Patrik, 2022. "Averaging bias in firm acquisition processes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    7. Cleston Alexandre dos Santos & Paulo Roberto da Cunha, 2021. "Effect of Trust between the Time Pressure and Complexity in Judging and Decision-Making in Auditing," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 25(5), pages 200037-2000.
    8. Nkansa, Porschia, 2024. "Does external auditor coordination influence internal auditor effort?," Advances in accounting, Elsevier, vol. 65(C).
    9. Sugahara, Satoshi & Cilloni, Andrea, 2021. "Mediation effect of students’ perception of accounting on the relationship between game-based learning and learning approaches," Journal of Accounting Education, Elsevier, vol. 56(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trotman, Ken T. & Bauer, Tim D. & Humphreys, Kerry A., 2015. "Group judgment and decision making in auditing: Past and future research," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 56-72.
    2. Solomon, Ira & Trotman, Ken T., 2003. "Experimental judgment and decision research in auditing: the first 25 years of AOS," Accounting, Organizations and Society, Elsevier, vol. 28(4), pages 395-412, May.
    3. Bonner, Sarah E. & Sprinkle, Geoffrey B., 2002. "The effects of monetary incentives on effort and task performance: theories, evidence, and a framework for research," Accounting, Organizations and Society, Elsevier, vol. 27(4-5), pages 303-345.
    4. Rich, J. S. & Solomon, I. & Trotman, K. T., 1997. "The audit review process: A characterization from the persuasion perspective," Accounting, Organizations and Society, Elsevier, vol. 22(5), pages 481-505, July.
    5. Dierynck, Bart & Kadous, Kathryn & Peters, Christian P. H., 2024. "Learning in the auditing profession: A framework and future directions," Other publications TiSEM eb74c8e4-bc4a-4b71-b88a-4, Tilburg University, School of Economics and Management.
    6. DeZoort, Todd & Harrison, Paul & Taylor, Mark, 2006. "Accountability and auditors' materiality judgments: The effects of differential pressure strength on conservatism, variability, and effort," Accounting, Organizations and Society, Elsevier, vol. 31(4-5), pages 373-390.
    7. David T. Dearman & Michael D. Shields, 2005. "Avoiding Accounting Fixation: Determinants of Cognitive Adaptation to Differences in Accounting Method," Contemporary Accounting Research, John Wiley & Sons, vol. 22(2), pages 351-384, June.
    8. Sweeney, John T. & Suh, Ik Seon & Dalton, Kenneth C. & Meljem, Sylvia, 2017. "Are workpaper reviews preparer-specific?," The British Accounting Review, Elsevier, vol. 49(6), pages 560-577.
    9. Michael Gibbins & Ken T. Trotman, 2002. "Audit Review: Managers' Interpersonal Expectations and Conduct of the Review," Contemporary Accounting Research, John Wiley & Sons, vol. 19(3), pages 411-444, September.
    10. Dinuja Perera & Parmod Chand & Rajni Mala, 2020. "Confirmation bias in accounting judgments: the case for International Financial Reporting Standards for small and medium‐sized enterprises," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 4093-4119, December.
    11. Odette M. Pinto, 2015. "Effects of Advice on Effectiveness and Efficiency of Tax Planning Tasks," Accounting Perspectives, John Wiley & Sons, vol. 14(4), pages 307-329, December.
    12. Kang, Yoon Ju & Trotman, Andrew J. & Trotman, Ken T., 2015. "The effect of an Audit Judgment Rule on audit committee members’ professional skepticism: The case of accounting estimates," Accounting, Organizations and Society, Elsevier, vol. 46(C), pages 59-76.
    13. Koch, Christopher & Weber, Martin & Wüstemann, Jens, 2007. "Can auditors be independent? : Experimental evidence," Papers 07-59, Sonderforschungsbreich 504.
    14. Dennis, Sean A. & Johnstone, Karla M., 2018. "A natural field experiment examining the joint role of audit partner leadership and subordinates’ knowledge in fraud brainstorming," Accounting, Organizations and Society, Elsevier, vol. 66(C), pages 14-28.
    15. Gold-Nöteberg, A.H. & Knechel, W.R. & Wallage, P., 2008. "The Effect of Audit Standards on Fraud Consultation and Auditor Judgment," ERIM Report Series Research in Management 11687, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    16. Hoffman, Vicky B. & Joe, Jennifer R. & Moser, Donald V., 2003. "The effect of constrained processing on auditors' judgments," Accounting, Organizations and Society, Elsevier, vol. 28(7-8), pages 699-714.
    17. Lau, Yeng Wai, 2014. "Aggregated or disaggregated information first?," Journal of Business Research, Elsevier, vol. 67(11), pages 2376-2384.
    18. Ye, Kangtao & Cheng, Yingli & Gao, Jingyu, 2014. "How individual auditor characteristics impact the likelihood of audit failure: Evidence from China," Advances in accounting, Elsevier, vol. 30(2), pages 394-401.
    19. Owhoso, Vincent & Weickgenannt, Andrea, 2009. "Auditors’ self-perceived abilities in conducting domain audits," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(1), pages 3-21.
    20. Dezoort, F. T., 1998. "An analysis of experience effects on audit committee members' oversight judgments," Accounting, Organizations and Society, Elsevier, vol. 23(1), pages 1-21, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:accper:v:14:y:2015:i:1:p:1-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1911-3838 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.