Cognitive approach to understand the impact of conflict of interests on accounting professionals’ decision-making behaviour

Abstract

This paper adopts a cognitive approach, by integrating social cognitive theory and throughput model, for examining the process through which conflict of interests affects the accounting professionals' decision-making behaviour. The model has been tested by conducting a quasiexperiment with 105 professionals from the Big Four accounting firms in the UK. The low positive outcome expectancy of compliant decision-making, high perceived difficulty in making compliant decisions and less ethical judgements are evidenced to be the situational cognitive predictors, and high propensity to morally disengage the dispositional cognitive predictor of the likelihood of deviant decision-making behaviour. The proposed cognitive approach provides a novel perspective for investigating decision-making behaviour in situations involving the conflict of interests. To facilitate effective management of conflict of interests, this study suggests implementing behavioural interventions for strengthening the accounting professionals' independence in fact.

Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors

“…Several studies have revealed the effect of cognitive thinking on a decision's outcome (Ishaque, 2020), but few studies have examined the relationship between biases (anchoring, heuristic thinking, disposition effect, and overconfidence) and risk perception (Sartori et al, 2014). Kahneman and Riepe (1998) found that investors make judgments about the probabilities that a particular outcome will occur and assign values to these results.…”

Financial Information and Management Decisions: Impact of Accounting Policy on Financial Indicators of the Firm

“…It provides a quantitative overview of the company's performance. Accounting information can expose issues that remain unnoticed during routine activities including situations involving the conflict of interests (Ishaque, 2019). Therefore, important aspects of the company get revealed through accounting information.…”

Sustainability and Firm Performance: A Review and Analysis Using Algorithmic Pathways in the Throughput Model

“…Moreover, other studies have implemented the TM in business ethics (Rodgers and Gago [102]) and auditing (Rodgers et al [103]; Rodgers and Al Fayi [2]), organizational behavior (Foss and Rodgers [104]), sexual harassment (Culbertson and Rodgers [105]) and tax compliance (O'Shaughnessy [106]). Moreover, Ishaque [107] indicated how the Throughput Model is useful when integrated with social cognitive theory. That is, the Throughput Model provides a novel perspective for investigating decision-making behaviour in situations involving the conflict of interests.…”

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