A Proposed Framework

for Behavioral
Accounting Research
By :
Anggita Tri Wulandari (20160420018)
Anggie Putri Rianti (20160420020)
Rizzah Rahmaniah (20160420023)
Fadhilah Raudhotus S (20160420028)

JOURNAL
 INTRODUCTION

– In the 20 or so years since Birnberg and Shields 1989 reviewed behavioral

accounting research (BAR), the area of applied behavioral research in general and
BAR in particular has burgeoned. The BAR literature has grown in breadth, depth,
and complexity. This change reflects an important trend in BAR: the reference
disciplines and the object of accounting and nonaccounting behavioral researchers
have broadened.
– The burgeoning of BAR and the expansion of disciplines that in one form or another
have added “behavioral” as an adjective to one of their sub-disciplines has enriched
the extant research on which BAR can draw e.g., Dickhaut et al. 2003; Hannan
2005. However, the increased interest and diversity of methods used to research
behavioral issues also leads to a blurring of the definition of “behavioral research”
in general and the boundaries of BAR in particular
 ORGANIZATION AND SCOPE OF THE
REVIEW

– Framework
I define focus as the unit used to analyze the research question’s. The units
range from the study of individuals to the study of the environment that acts
upon accounting or that accounting helps to shape. The four categories used in
this review were selected because they define distinct sets of research
questions. The categories include:
a. individuals,
b. small groups
c. organizations, and
d. environmental conditions.
CATEGORIES

– Individuals
These studies focus on the characteristics of a single actor and/or that actor’s
response to a particular accounting data set, accounting-related stimulus, or
accounting-related setting. It is by far the most active of the BAR categories discussed
in this paper and can be viewed as consisting of its own sub-categories. One line of
individual research can be characterized by a concern with how individuals solve
problems. The second line of research explicitly considers the role of strategic
behavior in the actor’s decision.
– Groups
Research classified as covering groups includes those studies where the relevant unit
of analysis consists of a small number of individuals. Typically, the members will be
viewed by the organization as affiliated (i.e., as acting in concert in some significant
way). The actors are assumed to be in the same unit at the time of the study.
 CATEGORIES

– Organizations.
The focus of this research is on the characteristics of the unit. The entity studied may be
described by the legal boundaries of a firm or a division within a larger entity. The
research question often is the role played by structural characteristics such as task
complexity or the organization’s accounting system design. These studies move us
farther away from the characteristics of the individual discussed in the two previous
categories.
 Environmental conditions
These studies examine the role of accounting in society. Studies included in this category
reflect the interaction between accounting and society: that is, the broader world of
which accounting is a part. The interaction can take the form of the external forces that
shape accounting, as well as studies of the role accounting has played in shaping the
world in which we live. The former may be closely related to BAR studies in
organizations.
INDIVIDUALS

– studies of the individual are of two types: individual choice studies and strategic
studies. While the two share a common core of issues such as the selection of
participants and the research methods utilized, they are significantly different in
many other ways. Thus, this section of the paper is organized in a slightly
different manner than those discussing the other elements of the framework.
Common Issues

Research Methods
The individual choice studies consist predominately of experiments, though some utilize surveys
Shields 2007. Experiments are particularly appropriate when the relevant dimensions of the
decision environment in which the decision maker interacts with the stimulus and makes the
decision are well known. Experiments have been used in BAR to examine a wide variety of
questions, including internal policies, external policies, tax reporting policies, incentive systems,
various types of resource allocation decisions, ethical issues, and various types of reports.
– Participants
A significant shift has taken place in the nature of the participants used in experimental studies.
Participants in the early studies most often were students undergraduate business majors and/or
M.B.A. students. BAR studies of the individual over the past two decades, however, haverequired
and utilized professionals as participants to a far greater degree.
Noneconomic Dimensions
Affecting the Individual
In what could be labeled “post-modern” BAR, a line of research focuses on
the appropriateness of two assumptions in the traditional economic model. One is
that self-interest is the sole motivator of choice; the other is the use of monetary
outcomes as the sole basis for measuring the utility of an outcome.
Culture and Its Impact on
Decision Makers
The potential role of national cultures is becoming more important as BAR
internationalizes and research findings reported by researchers from many
different countries appear in journals and SSRN.
In contrast to results reported in some BAR, Henrich and the Cross
Cultural Ultimatum Game Research Group conducted an extensive study across 15
smallscale economies. Their study is important because they examine behavior
among economies where the variation in economic development is far greater
than those typically studied by BAR. Using the dictator game and a social dilemma
game, as well as the ultimatum game, they report that the “textbook economic
model” failed to predict the observed behavior.
Question

What is the meaning of "Neuroaccounting"? Give example!

 Physiological Measures and BAR
– Behavioral accounting researchers have tried a variety of methods to
understand decision processes. The methods utilized are relatively non-
intrusive, but provide greater insight than observing an outcome/response
in an experimental setting.
– These approaches include think-aloud protocols (e.g., Bedard and Biggs
199) and data boards (e.g., Shields 1980). These approaches yielded
insights into “cognitive flow” or the decision process being followed.
However, both of these methods directly involve the participant and are
limited to reporting the decision maker’s conscious behavior.
Neuroeconomics and
Neuroaccounting

– Working with neuroscientists, they have gone one step deeper inside the “black
box” that is the decision maker. Using various devices, they observe the patterns of
brain activation as individuals make choices (e.g., McCabe et al. 2001; Camerer et al.
2005; Knudsen et al. 2007). Given the neuroscientists’ knowledge of the function of
the brain centers, conclusions can be drawn about what underlies the observed
behavior. By moving one step closer to the decision maker’s cognitive activity, the
role of the stimulus and the response changes in an interesting way.
– None of these papers provide the type of systematic review of the possible link
between neuroscience and BAR that can be found for finance in Sapra and Zak
(2008), who offer neuroscience explanations for observed behaviors in financial
decision making where data from neuroscience and neuroeconomics are available.
There are at least three reasons why research of
this type will progress more slowly than other types
of BAR:

– It requires cooperation with a researcher possessing

access to machines to perform the scans and skilled in
reading brain scans.
– It would appear that research of this type is quite
expensive.
– Explaining the findings to other BAR researchers may be
difficult.
Summary: Individual Choice Studies

– Overall, research focused on the individual’s decision-making behavior has played an

important role in BAR historically. The predominance of individual-focused research,
particularly among North American and many Australian researchers, is easily
observed by examining a recent issue of BRIA (2007).
– Individual choice studies do not exist in isolation from the other categories of BAR
discussed in this paper.
– There also are limitations in studying the individual in isolation. In part, this results
from the movement in organizations to make groups and teams the decision-making
unit.
– In addition, a certain amount of the richness found in the decision-making situation
may be lost when BAR isolates the individual from his or her environment.
SUMMARY

The research reviewed in this section continues to

reflect the richness of methods and disciplines utilized in
BAR. The methods used reflect the same wide array found
in the other research field: field surveys combined with
interviews, archival data, and naturally occurring
experiments. The data are both qualitative and quantitative
and the research may investigate anywhere from a single
unit within a firm to multiple organizations.
 The most striking aspect of the organization-focused
BAR is the disciplines on which the researchers draw. They
tend to be a different set from those found in the other
sections reviewed. Individual, dyad, and group studies
draw primarily from psychology and economics and, to a
much lesser degree, on sociology for both theories and
method. In organization-focused BAR, it is exactly the
opposite.