Robin R. Pennington

The Effects of Information Presentation Format on Judgment and Decision Making: A Review of the Information Systems Research

ABSTRACT: This paper reviews the information systems and accounting information systems research on the effects of information presentation format on judgment and decision making. We limit our review to static (noninteractive) formats only, where the user cannot manipulate or change the characteristics of the task, including information presentation format. We provide a conceptual framework, describing the role of information presentation in individual decision making. Additionally, we develop an integrated model of information presentation research based upon the theory of cognitive fit, and use the model to summarize the prior literature and provide suggestions for future research.

The Effects of Information Overload on Software Project Risk Assessment

Managers are responsible for providing effective information technology governance of the software development process. Ineffective governance leads to serious resource misallocations and negative consequences concerning Sarbanes-Oxley compliance. In order for managers to make informed decisions about software development projects, they often need more information than is available through normal information channels, that is, they need an in-depth review of the at-risk project. Such in-depth reviews, however, are costly. Hence, accurate identification of at-risk projects for in-depth review is critical to managements ability to govern. This research considers how two factors, information load and time pressure, affect the quality of the project-selection process. We examine quality by observing the decision strategies involved and then relating these strategies to subsequent decision making. An experiment was conducted with experienced information systems auditors using a combination of policy-capturing and computerized process-tracing techniques. The participants in our study cope with information overload by accelerating their decision-making process and adopting noncompensatory decision processes. Contrary to prior research, our process-tracing analysis suggests that participants rarely filter information, thus implying that decision makers are unable to process all the information. Coping by resorting to noncompensatory strategies did not decrease decision quality unless combined with accelerated information processing. Participants also increase their weight on the software project risk factors that they repeatedly access and that they view for longer periods of time. The theoretical contributions and practical implications regarding what actions managers can take to reduce the negative impact of information overload are discussed.

The Effects of Qualitative Overload on Technology Acceptance

Accounting professionals often feel stress from qualitative overload in their jobs. Research in the area of technology acceptance has not considered the potential negative effects of qualitative overload on user intentions. The purpose of this study is to examine the effect of this stressor on intention to use technology. A study was conducted with graduate accounting students using Audit Command Language (ACL) just prior to graduation, proxies for new staff accountants. Results indicate that qualitative overload mediates the relationship between perceived ease of use and intention to use ACL. As the perception of difficulty in using ACL increased, so did the perceived qualitative overload stress which in turn led to a negative relationship with intention to use ACL.

Managing impressions using distorted graphs of income and earnings per share: The role of memory

This study investigates the role that memory plays in interpreting and using distorted graphs that mislead the user of the financial information. It draws upon the literatures concerning memory, impression management and effective graph design. In order to examine whether reliance on memory for distorted graphs leads to different impressions of the data, we conduct an experiment in which we manipulate the type of graph distortion and whether memory of the graph is required by the decision. We present evidence that individuals receiving misleading graphs are more likely to misinterpret underlying data trends and that memory moderates the effect depending upon the type of distortion used to mislead the individual. The resulting data interpretation errors lead to more positive judgments and investment decisions than would otherwise be warranted. Thus our findings suggest that graph distortions mislead users into incorrect conclusions about the underlying data and that these interpretation errors persist in memory and affect judgments and investment decisions. We extend the prior literature, which has not considered the direct effects of graph interpretation or the effects of memory, and provide a baseline for investigating the effects of memory on impression management.

How much is enough? An investigation of nonprofessional investors information search and stopping rule use

Regulators are concerned that the information overload in the current Internet-based disclosure environment may cause investors to overlook important information. To gain a better understanding of the information set gathered by investors, this study incorporates theories from information systems research to examine the cognitive stopping rules used by investors to terminate information search. We survey nonprofessional investors to gain insight into what information they gather and when they determine they have enough information to stop searching and make an investment decision. Demographic analysis shows that investor characteristics are associated with the particular stopping rule used. In addition, results show that the stopping rule used affects the amount and type of information gathered. We find that, in general, investors include very little financial information in their search, and the amount gathered depends on the stopping rule employed. Our results call into question the decision usefulness of accounting information for nonprofessional investors and should be of interest to accounting information systems researchers, regulators, and accounting practitioners.

When Data Become Ubiquitous, What Becomes of Accounting and Assurance?

ABSTRACT Big Data and the data analytical software for analyzing it have developed far enough that some trends have emerged. People are clever. Leave them alone with resources and they will do interesting things with them, giving both intended and unintended consequences. This commentary stems from the 2016 Journal of Information Systems Research Conference (JISC2016) on Big Data. It highlights the landscape of Big Data, including how organizations are starting to use data in different ways. While it is true that some of what this commentary offers does not, strictly speaking, require Big Data with respect to volume, diversity, and structure, the connotations that Big Data bestowed have prompted new ways to stage and use data. For example, “70% of firms now say that big data is of critical importance to their firms” (Malone 2016). The articles in this issue were presented as papers at JISC2016. They treat different aspects of the growing availability and use of data in organizations.

Do Auditor Advocacy Attitudes Impede Audit Objectivity

Biased evaluation of evidence exists when an auditor either over-emphasizes evidence that supports management assertions or over-emphasizes evidence against management assertions. This study examines if an auditor’s advocacy attitudes lead to bias in information search for audit evidence. We measure the range of advocacy attitudes of individual auditors and hypothesize that auditors at either end of the advocacy spectrum may impede the objectivity of evidence gathered. Results from 60 Big 4 auditors indicate that advocacy attitudes affect both initial judgments and consequent search strategies of auditors. When initial judgments are client-favorable, all auditors exhibit search strategies focused on finding evidence to take a more conservative position; however, when initial judgments represent an unfavorable client position, auditors with lower advocacy attitudes exhibit a stronger tendency to search for additional evidence against a client-favorable position, consistent with a confirmation bias. Conversely, auditors with more neutral attitudes plan a more objective search effectively mitigating the bias. Aggregate findings establish an important link between bias and information search that may manifest itself in auditor training procedures and be of interest to auditing regulators.