Auditors' Judgment Performance under Stress: A Test of the Predicted Relationship by Three Theoretical Models

Abstract

Three competing theories of stress and judgment performance, namely, working memory capacity theory (Eysenck [1979]), cue utilization theory (Easterbrook [1959]), and coping behavior theory (Folkman [1984]) were compared for their efficacy in explaining the form of stress-induced performance changes in auditors' judgment. Two studies were conducted to test the goodness of fit of the three predicted stress-judgment relationships. The first study was a five-phase field research that included the development of an Audit Mental Stress Scale and the usage of a complex audit judgment case. The results indicated that the cue utilization theory had a higher explanatory power than the other two competing theories. In accordance with this theory, auditors' judgment performance improved as stress increased from a low to moderate level with optimal performance efficiency occurring at a moderate level of stress, and thereafter a decrement in judgment performance at an excessive level of stress. In other words, there was an inverted U-shaped relationship between stress and judgment performance. The second study reinforced the findings with a laboratory experiment. Forty-eight auditors were randomly assigned to four groups of 12 subjects each and the four groups assigned to one of four time pressure conditions. The auditors performed the same audit judgment case as in study one. An ANOVA that used orthogonal polynomial coefficients to test for the presence of trend was applied to identify which of the three models best fit the data. The results indicated that an inverted U-shaped curve contributed most to the data trend. The goodness of fit test once again supported the predicted relationship in Easterbrook's cue utilization theory.

The Effects of Time Pressure on Belief Revision in Accounting: A Review of Relevant Literature within a Pressure-Arousal-Effort-Performance Framework

“…6 There is considerable research that documents the relevance of time pressure in auditing (e.g., Kelley and Seiler 1982;Alderman and Deitrick 1982;S. Lightner, Adams, and K. Lightner 1982;McDaniel 1990;Choo 1995;Braun 2000;Low and Tan 2011;Blankley, Hurtt, and MacGregor 2014;Christensen, Glover, Omer, and Shelley 2016;Lambert, Jones, Brazel, and Showalter 2017;Glover, Hansen, and Seidel 2016). 7 Interestingly, auditees know that auditors face time constraints.…”

“…In an investing context, Rieskamp and Hoffrage (2008) demonstrate that, consistent with Ben Zur and Breznitz (1981) (and with RQ6), under high time pressure, their participants accelerated their information search (effort Intensity), used less information (filtration), focused on the more important information (effort Direction), and applied a cue-wise information search. In an experimental inventory task, Low and Tan (2011) find that forewarning Miller (1960); Ben Zur and Breznitz (1981); Eysenck (1985); Eysenck et al (2007); Rieskamp and Hoffrage (2008) Glover (1997); Choo (1995); Spilker and Prawitt (1997); Asare et al (2000) 10 Power and Dalgleish (1997) assume that individuals experience anxiety when a current goal is threatened. This may cause attention to be allocated to detecting (and processing) the source of the threat (i.e., to threat-related stimuli, which can be internal [e.g., worrisome thoughts] or external [e.g., taskirrelevant information]) and to deciding how to respond so that anxiety reduces attentional focus on the current task (Eysenck et al 2007).…”

The Effects of Information Overload on Software Project Risk Assessment*

“…However, information overload research indicates that as information load increases the proportion of relevant information used by decision makers often decreases (Tuttle & Burton, 1999; Burton & Tuttle, 2002). In addition, research regarding cue utilization theory shows that, when under stress, people reduce their cue usage (Choo, 1995). While it is somewhat tautological that filtration should result in lower levels of cue usage (although the conscious choice to ignore certain cues may lead to more consistent use of the remaining cues), it is less clear whether the other two coping strategies are responsible for observed decision quality differences.…”

Tax Rate Biases in Tax Planning Decisions: Experimental Evidence

“…Decision quality increases under moderate time constraints and decreases as time constraints become more onerous (Dror, Busemeyer, and Basola 1999, Payne, Bettman, and Johnson 1988, Rothstein 1986). Several studies in auditing research confirm the negative effects of time constraints on decision quality (e.g., Low and Tan 2011, Braun 2000, Choo 1995, Ponemon 1992. Thus, we conjecture that time constraints in tax-planning decisions increase the probability of applying heuristics based on tax-rate salience and posit the following:…”