The effect of cognitive reflection on the efficacy of impression management: An experimental analysis with financial analysts
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 8 August 2018
Issue publication date: 11 September 2018
Abstract
Purpose
The purpose of this paper is to investigate whether analysts’ personal cognitive traits mitigate the efficacy of graphical impression management.
Design/methodology/approach
Three experiments are conducted wherein 525 professional accountants working as financial analysts rate a hypothetical company’s performance graph depicting its net income trend. The manipulation is the presence (absence) of impression management techniques. Hypotheses test whether different techniques are effective and whether analysts’ cognitive reflection ability mitigates manipulation efficacy.
Findings
Presentation enhancement is effective only with impulsive analysts, showing the weakness of this technique through the use of colors. Measurement distortion and selectivity techniques are effective for reflective and impulsive analysts; however, reflective analysts are more critical about graphs prepared via selectivity that emphasize profit recovery following crises.
Research limitations/implications
Each impression management technique is investigated in isolation and in controlled conditions. Further research could consider how personal cognitive traits impact the efficacy of combined techniques and whether imbedding manipulated graphs with other information mitigates impression management efficacy.
Practical implications
Research on impression management is mostly “task-oriented;” few “people-oriented” studies focus on decision making by those using financial reports. Users’ cognitive reflection ability is shown to undermine the efficacy of some impression management techniques.
Social implications
Financial analysts, auditors and regulators could develop mechanisms to avoid pervasive usage of (or enhance skepticism regarding) techniques not mitigated by users’ reflectiveness.
Originality/value
Evidence from financial analysts with an accounting background provides insights on individual characteristics’ influence on graphical impression management efficacy.
Keywords
Acknowledgements
While working as independent consultants for the Brazilian Accounting Association (BAA), two of the authors of this study developed the questionnaire that was applied to the respondents. Some data about accountants’ demographic characteristics were published under the title Professional Accountants’ Profile, ed. 2012/13 (https://cfc.org.br/wp-content/uploads/2018/04/Pesquisa-Perfil-do-Profissional-da-Contabilidade-2012-13.pdf). Besides the questions of interest to the BAA, the authors inserted some questions that were used exclusively in connection to authors’ academic research. The BAA agreed to allow the authors to have exclusive access to data related to these questions. The authors are grateful to Lee Parker (Editor), and two anonymous referees for helpful comments and suggestions. The authors also thank the helpful comments the authors received from Fabio Caldieraro, Leonardo Barcellos, Rafael Goldszmidt, Alonso Borba and seminar participants at the 2016 American Accounting Association (AAA) Annual Meeting – New York (USA), the 2016 Brazilian Association of Graduate Programs in Accounting (ANPCONT) Conference – São Paulo (Brazil), the 2016 Brazilian Academy of Management (ANPAD) Conference – Bahia (Brazil) where a previous version of this paper received the “Best Accounting Paper Award”. The authors also thank proofreaders Michele M. Berto and Jinny Hayman. This paper is based on a chapter from Rodrigo Leite’s PhD thesis.
Funding
During the research the authors received funds from the National Research Council of Brazil (CNPq – www.cnpq.br): 308038/2013-4 (RLC), 130254/2015-0 (ROL) and 309991/2015-3 (ACBA), Higher Personnel Advancement Coordination (CAPES – www.capes.gov.br): 31011012004P5 (ROL), Rio de Janeiro State Research Foundation (FAPERJ – www.faperj.br): E-26/102.246/2013 (RLC) and from the Fundação Getulio Vargas (FGV – www.fgv.br): 163210 (RLC) and 163103009 (ROL). The above-mentioned institutions do not have any responsibility of data collection and estimation. The views expressed in this paper represent the authors’ point of view, and not from any institution.
Citation
Cardoso, R.L., Leite, R.d.O. and Aquino, A.C.B.d. (2018), "The effect of cognitive reflection on the efficacy of impression management: An experimental analysis with financial analysts", Accounting, Auditing & Accountability Journal, Vol. 31 No. 6, pp. 1668-1690. https://doi.org/10.1108/AAAJ-10-2016-2731
Publisher
:Emerald Publishing Limited
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