Debiasing as a powerful management accounting tool? Evidence from German firms
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 26 November 2020
Issue publication date: 17 August 2021
Abstract
Purpose
The purpose of this paper is to investigate if and how firms approach debiasing and what determines its success. In particular, this study examines if debiasing is effective in reducing cognitive decision biases. This paper also investigates organizational characteristics that determine the effectiveness of debiasing.
Design/methodology/approach
This study uses survey data from German firms to answer the research questions. Target respondents are individuals in a senior management accounting function.
Findings
In line with the hypotheses, this paper finds that debiasing can reduce cognitive biases. Moreover, this study finds that psychological safety not only directly influences the occurrence of cognitive biases but is also an important factor that determines the effectiveness of debiasing.
Research limitations/implications
This paper provides evidence that debiasing can serve as a powerful management accounting tool and discusses debiasing in the context of recent management accounting literature. This study also adds to the stream of research that investigates the role of psychological safety in organizations by highlighting its importance for successful debiasing.
Practical implications
This paper informs firms that use or intend to use debiasing about crucial determinants to consider when debating its implementation, i.e. psychological safety. This study also identifies risk management as a potential interface for the implementation of systematic debiasing.
Originality/value
While previous research primarily addresses specific cognitive biases and debiasing mechanisms using lab experiments, this is – to the best of the knowledge – the first study investigating cognitive biases and debiasing on a broad conceptual level using survey data.
Keywords
Acknowledgements
The authors thank the editor Burkhard Pedell and two anonymous reviewers for their helpful comments and suggestions.
Citation
Kreilkamp, N., Schmidt, M. and Wöhrmann, A. (2021), "Debiasing as a powerful management accounting tool? Evidence from German firms", Journal of Accounting & Organizational Change, Vol. 17 No. 4, pp. 555-582. https://doi.org/10.1108/JAOC-12-2019-0122
Publisher
:Emerald Publishing Limited
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