Testing The Order And Framing Effect In Budgetary Decision-Making: Experimental Study

Dhias Kharismadani, I Made Narsa

Abstract

One of the important roles of management accountants, nowadays, is to provide input for managers in decision-making. The presentation order of the input and response modes used, either sequentially or simultaneously, can lead to order effects (either primacy or recency) that result in biased decision-making. Order effects in this study were analyzed using the Belief-Adjustment Model (Hogarth and Einhorn, 1992). Belief adjustment theory is applied as the main framework of this research and framing effects were added to get an explanation of the interactions and effect. This study aims to empirically examine the moderating effect of information framing on the belief revision process in the budget preparation. A laboratory experimental method was used in this study with a 2x2 between-subjects design and participants consisted of 108 accounts managers from a newspaper’s business group. The hypotheses were tested using Two-Way ANOVA and found the existence of the recency effect. The finding indicates that in the step-by-step (sequential) response mode, the occurrence of recency effects can be mitigated by information framing.

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Paper Citation


in Harvard Style

Kharismadani D. and Narsa I. (2018). Testing The Order And Framing Effect In Budgetary Decision-Making: Experimental Study.In Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium, ISBN 978-989-758-339-1, pages 725-731. DOI: 10.5220/0007020507250731


in Bibtex Style

@conference{jcae symposium18,
author={Dhias Kharismadani and I Made Narsa},
title={Testing The Order And Framing Effect In Budgetary Decision-Making: Experimental Study},
booktitle={Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium,},
year={2018},
pages={725-731},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0007020507250731},
isbn={978-989-758-339-1},
}


in EndNote Style

TY - CONF

JO - Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium,
TI - Testing The Order And Framing Effect In Budgetary Decision-Making: Experimental Study
SN - 978-989-758-339-1
AU - Kharismadani D.
AU - Narsa I.
PY - 2018
SP - 725
EP - 731
DO - 10.5220/0007020507250731