Attribute Evaluability and Evaluation Mode Effects of Accounting Information on Decisions
Hank C. Alewine, University of Kentucky
ABSTRACT: This paper investigates how evaluability information (EI) and data presentation of accounting information affect decisions. The evaluability hypothesis states that difficult-to-evaluate data are weighted more when analyzed jointly (joint evaluation mode, or JE) than separately (SE). In Study One, participants were randomly assigned to evaluation mode (EM) with no or complete supplemental EI in a 2X2 factorial design. Participants viewed a hypothetical company’s environmental accounting information for two factories and indicated how much they would invest in each. Results indicate greater accuracy in JE than SE with no EI, but no difference in accuracy with EI. In Study Two, EM was manipulated with partial EI. Findings show decision differences between EM even though the alternatives were equally attractive. Results suggest cost accountants should carefully consider EM and EI when presenting varying levels of evaluable accounting information for decision making.
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