Effect of Ordo in Assessment of Financial and Non-Financial Information

Monica Rahardian Ary Helmina; Imam Ghozali; Jaka Isgiyarta; Ibnu Sutomo

doi:10.15294/jdm.v11i1.22554

Effect of Ordo in Assessment of Financial and Non-Financial Information

Monica Rahardian Ary Helmina⁽¹⁾, Imam Ghozali⁽²⁾, Jaka Isgiyarta⁽³⁾, Ibnu Sutomo⁽⁴⁾,

DOI: https://doi.org/10.15294/jdm.v11i1.22554

(1) Department of Accounting, Faculty of Economics and Business, Lambung Mangkurat University, Banjarmasin, Indonesia1
(2) Department of Accounting, Faculty of Economics and Business, Diponegoro University, Semarang, Indonesia
(3) Department of Accounting, Faculty of Economics and Business, Diponegoro University, Semarang, Indonesia
(4) Department of Accounting, Faculty of Economics and Business, STIE Panca Setia, Banjarmasin, Indonesia

Abstract

This research focuses on investor decision making on information provided by the company. Belief-adjustment models emphasize the order of presentation of information. Order effects occur when decisions made by individuals differ after receiving evidence in a different order. In order of evidence, the characteristics of the evidence are mixed between confirmative (positive) information and unconfirmed (negative) information.The participants of this study are investors who have investment accounts. The design of the 2x4 experimental method is divided into analysis of factor 2 (presentation pattern) x 4 (information value), which aims to test that the presentation of information in step by step (SBS) will have a better impact than end of sequence (EOS). There are 8 combinations of instruments contain patterns and information values that are used as a source of stock valuation. ANOVA analysis is used for this study. The results showed that there was an effect of the pattern of information delivery in investment decision making when the SBS and EOS disclosure patterns in hypothesis 1 and hypothesis 2. The results of hypothesis 3 did not support the belief adjustment model theory.

Keywords

Belief-Adjustment Model, Firm Value, Information Type.

Full Text:

PDF

References

Aboody, D., & Lev, B. (2000). Information Asymmetry, R & D, and Insider Gains. The Journal of Finance, 55(6), 2747-2766.

Ahlawat, S. S. (1999). Order Effects and Memory for Evidence in Individual Versus Group Decision Making in Auditing. Journal of Behavioral Decision Making, 12(1), 71-88.

Alattar, J. M., & Al-Khater, K. (2008). An Empirical Investigation of Usersâ€™ Views on Corporate Annual Reports in Qatar. International Journal of Commerce and Management, 17(4), 312-325.

Almilia, L. S., & Supriyadi, N. A. (2013). Examining Belief Adjustment Model on Investment Decision Making. International Journal of Economics and Accounting, 4(2), 169-183.

Ashton, A. H., & Ashton, R. H. (1988). Sequential Belief Revision in Auditing. Accounting Review, 63(4), 623-641.

Ashton, K. J. (2002). Eliminating Recency with Self-Review: the Case of Auditorsâ€™ â€˜Going Concernâ€™ Judgments. Microporous and Mesoporous Materials, 15(March), 221-231.

Brimble, M., & Hodgson, A. (2007). Assessing the Risk Relevance of Accounting Variables in Diverse Economic Conditions. Managerial Finance, 33(8), 553-573.

Bushman, R., Chen, Q., Engel, E., & Smith, A. (2004). Financial Accounting Information, Organizational Complexity and Corporate Governance Systems. Journal of Accounting and Economics, 37(2), 167-201.

Coles, J. L., Daniel, N. D., & Naveen, L. (2008). Boards: Does One Size Fit All?. Journal of Financial Economics, 87(2), 329-356.

Hanafi, T. (2017). The Testing of Belief-Adjustment Model and Framing Effect on Non-Professional Investorâ€™s Investment Decision-Making. The Indonesian Accounting Review, 7(1), 1-14.

Helmina, M. R. A., Ghozali, I., Isgiyarta, J., & Sutomo, I. (2019). How Does Reporting Technology Affect Firm Value?. International Journal of Scientific & Technology Research, 8(7), 534-541.

Hogarth, R. M., & Einhorn, H. J. (1992). Order Effects in Belief Updating: the Belief-Adjustment Model. Cognitive Psychology, 24(1), 1-55.

Husnatarina, F., & Si, M. (2012). The Effect of Mandatory Auditor Rotation and Retention on Auditor-Client Negotiations Strategies. Review of Integrative Business & Economics Research, 1(1), 259-274.

Koonce, L., McAnally, M. L., & Mercer, M. (2005). How do Investors Judge the Risk of Financial Items?. The Accounting Review, 80(1), 221-241.

Perego, P., Kennedy, S., & Whiteman, G. (2016). A Lot of Icing but Little Cake? Taking Integrated Reporting Forward. Journal of Cleaner Production, 136(November), 53-64.

Pinsker, R. (2007). A Theoretical Framework for Examining the Corporate Adoption Decision Involving XBRL as a Continuous Disclosure Reporting Technology. New Dimensions of Business Reporting and XBRL, 73-98. New York: DUV Springer.

Trotman, K. T., & Wright, A. (1996). Recency Effects: Task Complexity, Decision Mode, and Task-Specific Experience. Behavioral Research in Accounting, 8, 175-193.

Tubbs, R. M., Messier, W. F., & Knechel, W. R. (1993). Recency Effects the Auditorâ€™s Process Belief-Revision. The Accounting Review, 65(2), 452-460.

Tuttle, B., Coller, M., & Burton, F. G. (1997). An Examination of Market Efficiency: Information Order Effects in a Laboratory Market. Accounting, Organizations and Society, 22(1), 89-103.