Investigating the effect of different emotional states (emotions) on biased decision making in accounting

Subject Areas : Financial and Behavioral Researches in Accounting

mohammadreza tat ¹ , mansour garkaz ² , mohammadreza abdoli ³ , saeid baraty ⁴

1 - Accounting Department, shahrood Branch, Islamic Azad University, shahrood, Iran.
2 - Accounting Department, Gorgan Branch, Islamic Azad University, Gorgan, Iran
3 - Accounting Department, shahrood Branch, Islamic Azad University, shahrood, Iran.
4 - Accounting Department, shahrood Branch, Islamic Azad University, shahrood, Iran.

Received: 2021-11-14 Accepted : 2022-02-27 Published : 2022-05-22

Keywords: moral judgment, Emotional States, emotions, Biased Decision Daking,

Abstract :

Human judgment and decision-making affect all stages of the creation of accounting information, from the beginning to the interpretation of information. The decision-making process can be shaped by emotions, emotions can change signals of evaluation, risk perception and strategic orientation. Thus, there is an aspect of human behavior in the judgment and decision-making process that is reflected in the accounting information disclosed in the financial statements. Therefore, in the present study, the effect of different emotional states (emotions) on biased decisions in accounting has been investigated. This research is a descriptive and quasi-experimental application. The statistical population of this research is graduate students of accounting in a simulated environment by presenting a scenario as a financial manager. The number of samples was determined according to the unknown number of population through the formula of unknown population 198 people. One-way analysis of variance and LSD post hoc test were used to analyze the data. The results of this study show that different emotional states (happy / sad) have a significant effect on students' decision-making in the role of financial managers. The decision-making of financial managers (accounting students) who were in a normal emotional state was less biased than that of financial managers who were in an unusual (happy / sad) emotional state. The results of this study show that when people experience natural and stable emotional states, they can make the right decisions. But when their condition is unusual, they are unable to make the right decision.

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