Accounting Changes and Information Processing: Some Further Empirical Evidence

Garry Marchant
The hypothesis that individual decision makers will fail to adjust their decision processes in response to changes in accounting method was investigated using the Ashton [1976] selling price paradigm. This study replicates Swieringa, Dyckman and Hoskin [1979} and Dyckman, Hoskin, and Swieringa [1982] with one major change to their experimental design. To avoid a non-linearity effect, which might induce a change in decision rule even in the absence of an accounting change and thus confound the impact of the treatment, the unit cost numbers were assigned the same mean before and after the accounting change. In addition, the amount of information about the accounting method change was varied. The task involved the setting of 30 selling prices in two sets of 15 each. The change in the method of accounting for unit cost occurred after the first set. The results showed that the majority of subjects did not change their decision rules in response to the change in accounting method. This evidence indicates that in the absence of a non-linearity effect the data fixity hypothesis is confirmed.

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