Pressure and performance in accounting decision settings: paradoxical effects of incentives, feedback, and justification

Article Abstract:

The effect of pressure and performance in the audit process was researched to elucidate the relationship between incentives, performance feedback, and the requirement to justify decisions. Research results reveal that the availability of a decision aid in the audit process can undermine the positive effects exercised on decision making by incentives, feedback, and justification requirements. Subjects had a greater level of accuracy in an environment characterized by incentives, feedback, or justification requirements in which there was no access to a decision aid and displayed a lower level of accuracy in a similar environment in which a statistically valid decision aid was present. While incentives, feedback, and justification requirements can increase performance by increasing the pressure on auditors, the introduction of a decision aid can alter auditors' perceptions of a task so that they believe that a new strategy is required.

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Discussion of pressure and performance in accounting decision settings: paradoxical effects of incentives, feedback, and justification

Article Abstract:

Robert H. Ashton's (1990) research into the effect of pressure and performance in accounting decision settings focused on the effects of incentives, performance feedback, and justification requirements in audit environments characterized by the presence of or lack of a decision aid. The role of the decision aid in Ashton's pressure-arousal-performance model is characterized by two variables, task difficulty and pressure. The model could be more parsimonious if the decision aid was considered a fourth form of pressure rather than serving as a stand-in for the difficulty of audit tasks. In Ashton's research, the decision aid was correct only 50% of the time, leading to questions of whether the results were affected by negative feedback and whether results could be generalized to audit practice.

Ashton, Robert H.

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