Professional Documents
Culture Documents
Looks at the judgement and decision making of accountants and auditors and the influence their output has on users judgements and decision making
aim is to explain and predict behaviour and improve decision making
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process tracing
build representative decision trees
probabilistic judgement
probability statements based on Bayess theorem
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An important limitation is that it is not a good descriptor of how people actually make decisions
so process tracing methods developed
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Probabilistic judgement
Useful where initial beliefs about a prediction or evaluation need to be revised as new data arrives Posterior odds = Likelihood ratio x Prior odds
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Limitations of BAR
Frequent contradictions between the findings of similar studies
Human information processing is far more complex than the development of current research theories and methods Research settings fail to adequately replicate realworld settings
Should policy be influenced by research on individual decision makers
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Limitations of BAR
The major limitation is the lack of a single underlying theory to unify diverse research questions and findings
has borrowed from a multitude of disciplines and contexts and so no common framework
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Summary
If we are to have a better understanding about how people use accounting information, then we need to study peoples actual behaviours and decision processes BAR can be used to explain and predict behaviour and improve decision making Research in this area has relied heavily on the Brunswik lens model, process tracing methods and the probabilistic judgement model There are significant limitations in BAR
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