In which of the following situations would you probably not apply a behavioural theory if you wanted to undertake accounting research?
A)You want to know whether investors use disclosures when deciding whether to invest in a firm
B)You are interested in understanding the effect of unexpected earnings announcements by firms on share prices
C)You want to know what factors loan managers consider when assessing the riskiness of a new client firm
D)You want to determine whether individuals are quicker at analysing financial information using graphs or tables

Question

Quizplus · Accepted Answer

DBehavioral theories in accounting research focus on understanding the actions and decisions of individuals or groups in response to various accounting information or systems. Option B, which is about the effect of unexpected earnings announcements on share prices, leans more towards market efficiency and investor reactions in a broader sense, which is typically explored through financial economics rather than behavioral theories. Option D, which involves determining whether individuals are quicker at analyzing financial information using graphs or tables, is more about cognitive processing and might be better suited for research in cognitive psychology or information systems rather than applying a behavioral theory in accounting.

In Which of the Following Situations Would You Probably Not