Job Complexity and Cognitive Aging: What Can We Learn from Accounting Practice?
42 Pages Posted: 28 Aug 2017
Date Written: August 25, 2017
We use a quasi-experimental approach to investigate whether auditing practice is more likely to prevent cognitive reflection abilities (CR-abilities) decline than financial reports elaboration practice. Cognitive aging studies suggest that working in complex and mentally demanding jobs is associated with a slower cognitive decline with aging. We rely on the institutionally unique setting of the Brazilian accounting profession together with previous research and interviews to reason that, while auditors and preparers follow indistinguishable educational paths, auditors usually engage in more cognitively taxing tasks than preparers. From this, we hypothesize and find that auditors’ and preparers’ CR-abilities don’t differ at early career stages, but preparers’ CR-abilities decline across aging, whereas auditors’ CR-abilities are preserved. To assess certified public accountants’ (CPAs) CR-abilities, we collect responses to the cognitive reflection test via a national survey applied by the Brazilian Institute of CPAs. To estimate the moderation effect of career on the relationship between aging and CR-abilities, we explore the unique counterfactual opportunity provided by the accounting setting by matching preparers to auditors within age subgroups. This as good as random approach across several personal and professional individual characteristics allows us to avoid some of the pitfalls of longitudinal studies to provide evidence that aging leads human beings to adapt information processing strategies towards Type 1 processing in detriment of Type 2. But auditing practice may curb this trend. We discuss implications of these findings to accounting research and practice.
Keywords: accounting practice, cognitive aging, cognitive reflection ability, certified public accountants
JEL Classification: M41, M42, M49
Suggested Citation: Suggested Citation