The effects of accounting knowledge on the omission of value added information in wealth measurement and distribution decisions
Ronald D. Picur
Purpose – This study aims to examine whether accounting knowledge is associated with a decision maker's tendency to ignore value added information in wealth measurement and distribution decisions. Design/methodology/approach – A between-subjects laboratory experiment was employed. Subjects prepared accounting reports that measured and distributed an entity's wealth based upon given accounting data. Accounting knowledge was measured as: a discrete variable by classifying subjects into high-, low- and no-accounting knowledge groups, and a continuous variable by classifying subjects on the number of accounting courses completed. Findings – Findings provide empirical evidence that high levels of accounting knowledge interferes with a decision maker's ability to incorporate value added information (versus accounting profit) in wealth measurement and distribution decisions. Research limitations/implications – This experiment used subjects from the USA where the production and disclosure of a value added report is not mandated. The results should be tested in a country where the statement of value added is routinely produced, disclosed and audited. Practical implications – This study shows the dysfunctional effect of accounting knowledge which appears to hinder performance in wealth measurement and distribution decisions. Originality/value – This is the first attempt to explain why decision makers may ignore value added information in wealth measurement tasks and distribution decisions by focusing on the role of knowledge structures.
Accounting, Knowledge mapping, Value added, Wealth
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.