The Influence of Confirmation Bias on the Judgment of Accounting Information Preparers for Smes
an Experimental Study
DOI:
https://doi.org/10.16930/2237-766220253565Keywords:
Confirmation Bias, Accounting Judgment, Justification Requirement, Prior Beliefs, Accounting Information Preparers, Provision of GuidelinesAbstract
The study examined the influence of confirmation bias on the judgment of accounting information preparers when applying the Technical Accounting Standard for Small and Medium-Sized Entities (CPC PME). It was proposed that prior beliefs, stemming from training and experience with full IFRS, may affect the judgment of the economic substance of similar events within the CPC PME context. Additionally, mechanisms such as the requirement to justify decisions and the provision of guidelines were suggested as potential mitigators of confirmation bias.An experimental design with a between-participants approach was employed, randomly assigning respondents to control, justification, and guideline groups. Two questionnaires addressed the judgment of intangible assets and revenue from customer contracts, yielding 115 and 90 responses, respectively, collected via SurveyMonkey. The results confirmed the presence of confirmation bias in both scenarios and showed that requiring justification was effective in reducing bias in both cases, while the provision of guidelines reduced bias in only one scenario and intensified it in the other.The study makes an academic contribution by expanding knowledge about the cognitive limitations of accounting preparers and the impact of prior beliefs on professional judgment. In practical terms, it demonstrates that specific mechanisms can mitigate cognitive biases and improve the quality of accounting decisions. Socially, it highlights the need for ongoing education and training to ensure that accounting standards are applied more consciously and effectively, thereby enhancing the reliability of financial information.
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