Presentation Format, Decision-makers’ Personal Ability And The Decision Value Of Management Accounting Reports

The traditional focus of financial information disclosure is to study the content of the information included in the financial reports. With the development of economics, social behavioristics, a growing number of studies have found that the way to disclose information has an important influence on decision-makers’ behavior and the decision value. The practice of management accounting has been constantly improving its information content, but the research on disclosure forms is still rare in the country.In order to study the problems above, this paper inspected the potential decision-aiding effect, which the presentation format and decision-makers’ personal ability may have on the decision value of management accounting reports in tasks of different complexity from the cognitive psychology perspective. By means of computer experiment, this paper studied how presentation format(table VS graph) and personal ability affect accuracy and efficiency and tried to introduce task complexity as a variable to explain the inner mechanism. In the support of Visual Basic, more than one hundred MPAcc students from the Southwest University of Finance and Economics were invited to take part in the experiment. The experiment simulated both simple and complex tasks. In the simple task, subjects needed to price the blocks toys in the next quarter according to the sales, cost and profit information of the past five quarters to maximize profit. In the complex task, as senior managers of a company which has only one production line, subjects needed to distribute machinery resources to two big customers and respectively set the price for them. After the allocation and pricing, the subjects would be given the results of their decisions, including the profits of each customer’s and the whole company. Subjects should rethink their decision according to the feedback and make another decision. By doing these for6times, the subjects should seek an optimal pricing and allocation to reach the largest profit gradually. For the management accounting reports in each task, graphics and tables were used to provide the same information. The two kinds of presentation formats were between-group designs and participants were randomly assigned to tabular group or graphic group. At the same time, the subjects’personal abilities were tested by Administrative Aptitude Test. According to the results, subjects could be divided into decision-makers of two ability levels. By doing this, the effect which personal ability has on the decision value can be inspected.The arrangement of the main content is as follows:Chapter I:Introduction. This part gave a comprehensive overview of the research background, significance, main contents, framework, research methods and possible innovations and contributions of the entire article.Chapter II:Literature Review. This part mainly reviewed related articles in three aspects:presentation format and decision value; task characteristics, presentation format and decision value; decision-makers’characteristics, presentation format and decision value, and seek effective research scope.Chapter III:Theoretical Analysis and Hypothesis. Combing the existing literature with selected topic, this part analyzed the logical relationship between variables and introduced the hypothesis of this paper based on framing effects theory, cognitive fit theory and the theory of representational congruence.Chapter IV:Research Design. This part systematically stated the ideation of the experiment in the aspects of experimental task, experimental subject and incentive mechanism, and defined the research variables.Chapter V:Experimental Results and Analysis. Firstly, the dependent variables were analyzed with descriptive statistics, inspecting the effectiveness of independent variables. Secondly, T-test and ANOVA analysis were used to inspect the influence of presentation format and personal ability on management decision accuracy and efficiency under tasks of different complexity. Thirdly, further analysis was carried on to discuss the factors affecting the subject.Chapter VI:Conclusions and Prospects. This part summarized the experimental findings and analyzed the theoretical and practical significance. At the same time, based on the limitations, the improvement ideas of future researches and possible research directions were discussed.Through empirical research, the main conclusions of this paper are drawn: presentation format and decision-makers’personal ability are the important factors which affect the decision value of management accounting reports and the influence is different under tasks of different complexity. Specifically, in terms of accuracy, when the task is simple, accuracy is related to presentation format and has nothing to do with decision-makers’ personal ability; but when the task is complex, accuracy is related to decision-makers’personal ability and has nothing to do with the presentation format. In terms of efficiency, when the task is simple, both presentation format and decision-makers’personal ability affect efficiency; but when the task is complex, neither presentation format nor decision-makers’ personal ability will affect efficiency.Innovation and contribution of this article may be reflected in the following aspects:First, the research perspective of this paper is in the view of Science of Decision Making and Psychology, introducing framing effects theory, cognitive fit theory and the theory of representational congruence. It has gradually revealed the decision value and mechanism of management accounting reports, and provided the basic theory support for the generation and utilization of management accounting reports.Second, the content of this paper has focused on the management accounting reports which are both flexible and diverse. According to the empirical results, the effect that presentation format and decision-maker’ personal ability have on the accuracy and efficiency has been inspected, which provide management implications for the practice.Third, the research method of this paper is experimental methodology. The rigorous design of experimental scene makes it possible to realize the simulation by Visual Basic programming language. More than one hundred subjects participated in the experiment. By fully using the resources of the national natural science funds, three laboratories were used and many experts were invited to carry on the experiment. The computers accurately collected the information and record the decision time to ensure the validity and reliability of the experiment data. The unique contribution of this paper is to comprehensively consider the influence of presentation format, personal ability and task complexity when referring to the decision value of management accounting reports.