Causal Reasoning in Financial Reporting and Voluntary Disclosure

54 Pages Posted: 5 May 2011

See all articles by Lisa Koonce

Lisa Koonce

University of Texas

Nicholas Seybert

University of Maryland - Department of Accounting & Information Assurance

James Smith

University of Lethbridge - Dhillon School of Business

Date Written: May 4, 2011

Abstract

Causal reasoning involves understanding the cause of events that have already happened (i.e., diagnosis) as well as predicting which future events will occur (i.e., prediction). Although this type of reasoning is an important part of financial reporting and voluntary disclosure, very little research has relied on it as a basis for developing and interpreting testable research ideas. The purpose of this paper is twofold: First, we review key theories from psychology that pertain to causal reasoning. Second, we identify how these theories can be successfully used by behavioral researchers interested in financial reporting and voluntary disclosure.

Keywords: causal reasoning, accounting, financial reporting, voluntary disclosure, bias, behavioral, experiment, psychology, diagnosis, prediction

JEL Classification: M40, M41

Suggested Citation

Koonce, Lisa L. and Seybert, Nicholas and Smith, James, Causal Reasoning in Financial Reporting and Voluntary Disclosure (May 4, 2011). Accounting, Organizations and Society, 2011, Available at SSRN: https://ssrn.com/abstract=1831450

Lisa L. Koonce (Contact Author)

University of Texas ( email )

Dept. of Accounting
McCombs School of Business
Austin, TX 78712
United States
512-471-5576 (Phone)
512-471-3904 (Fax)

Nicholas Seybert

University of Maryland - Department of Accounting & Information Assurance ( email )

Robert H. Smith School of Business
College Park, MD 20742-9157
United States

James Smith

University of Lethbridge - Dhillon School of Business ( email )

4401 University Drive
Lethbridge, Alberta T1K 3M4
Canada
403-317-4053 (Phone)

HOME PAGE: http://www.uleth.ca/dhillon

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