Comments on Ch. 1, Information and Human Behavior ACCT 7320, Fall 20101

Information and data Whats the difference? –Not all data is information (informative) –Not all information comes from data What are accountants required to report? –How objective is it? What do traditional accounting numbers not report?

Human Information Processing Needs and preferences for data vary Complexity –When a problem becomes too complex, we fall back on simple rules-of-thumb (heuristics) because we cant calculate an answer –Figure 1-1 At high environmental complexity, we revert to a simple decision model.

Cognitive Limits and Rationality Assumption of rational economic agents is not always justified –Corporate reward systems often designed with this assumption –At best, people will satisfice rather than optimize.

Personality factors Myers-Briggs Type Indicator (MBTI) –A popular theory but not well accepted by experimental psychologists –Based on Jungs ideas (rival of Freud) Big Five Personality factors a more current theory –I will say more

Form, Order, and Format of Information Factors in communication –Order of presentation is influential –How aggregated vs. detailed –How it looks on the computer screen or page –How probabilities are treated Assumed certainty (deterministic) vs stochastic Eliciting information from others Oral and written communication crucial skills –We will work on these

The endmove to Shahriars dissertation study