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The effect of experience and complexity on order and recency bias in decision making by professional accountants

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Recently, questions have been raised regarding the impact of experience on the susceptibility of professional accountants to judgment bias—particularly order and recency biases as predicted in the Belief‐Adjustment Model. The Belief‐Adjustment Model predicts recency effects will always exist in complex decision domains (regardless of experience). Complexity is defined within the model as a function of task familiarity and information load. The prior studies on experience and bias in accounting domains have focused on varying task familiarity and have found that task familiarity can mitigate order/recency bias. In this study, complexity is operationalised through heavy information load (a condition more consistent with professional accounting environments) while maintaining a high level of task familiarity. Two experiments were conducted. The first experiment utilised a going concern decision using highly experienced partners and managers. The second experiment was conducted in the insolvency domain and used 87 experienced insolvency practitioners. The results indicate that experience does not mitigate order/recency bias under conditions of heavy information load.
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Keywords: Belief‐adjustment model; Decision making; Going concern judgments; Insolvency judgments; Order and recency bias

Document Type: Original Article

Affiliations: 1: Oklahoma State University, College of Business Administration, School of Accounting, Stillwater, OK 74078–0555, USA, 2: Defence Science and Technology Organisation Australia, C3 Research Centre, Fern Hill Park, Department of Defence, Canberra, ACT 2600, Australia, 3: Department of Accounting and Finance, Faculty of Commerce and Economics, University of Tasmania, Hobart, Australia*

Publication date: 2000-07-01

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