The effects of judgmental biases on managerial accounting techniques

Subject Areas : Management Accounting

فریدون رهنمای رودپشتی ¹ , هاشم نیکومرام ² , آرزو جلیلی ³

1 - ندارد
2 - ندارد
3 - ندارد

Received: 2012-07-15 Accepted : 2012-09-24 Published : 2013-06-10

Keywords: Managerial Accounting Techniqu, over confidence, optimism, Hindsight, Representativeness,

Abstract :

The main objective of this article is to investigate the effects and consequences ofbehavioral biases – at the judgmental level – on managerial accounting techniques. Inthis respect, the individual judgmental biases – including: Over Confidence, Optimism,Hindsight, and Representativeness biases, - are treated as independent variables, whilethe managerial accounting techniques functions– including: Budgeting and Forecasting,Evaluating the undesirable consequences of the risk, Performance Evaluation, TakingRisky Options, Ranking and Weighting the potentiality of the risk in different ventures,and feedback assessment of the risk potentiality, - are considered as dependentvariables.The Structural Equation Modeling Technique, with Maximum Accuracy (ML) hasbeen utilized for hypothesis test. The following results are the overall findings:1) The results showed that, there is an opposite relationship between OverConfidence and Optimism biases, on one hand, and managerial accountingtechniques on the other hand;2) A meaningful straight linkage between Hindsight bias and managerialaccounting techniques was observed;3) No potential relationship between Representativeness bias and the dependentvariable could be found;

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