An essay about the effect of vague accounting standards on the decision making process of auditors

Vague words and expressions are present throughout the standards that comprise the accounting and auditing professions. Vagueness is considered to be a significant source of inexactness in many accounting decision problems and many authors have argued that the neglect of this issue may cause accounting information to be less useful. On the other hand, we can assume that the use of vague terms in accounting standards is inherent to principle based standards (different from rule based standards) and that to avoid vague terms, standard setters would have to incur excessive transaction costs. Auditors are required to exercise their own professional judgment throughout the audit process and it has been argued that the inherent vagueness in accounting standards may influence their decision making processes. The main objective of this paper is to analyze the decision making process of auditors and to investigate whether vague accounting standards create a problem for the decision making process of auditors, or lead to a better outcome. This paper makes the argument that vague standards prompt the use of System 2 type processing by auditors, allowing more comprehensive analytical thinking; therefore, reducing the biases associated with System 1 heuristic processing. If our argument is valid, the repercussions of vague accounting standards are not as negative as presented in previous literature, instead they are positive.

Decision making process: a comparison between the public and private sector

The problem of decision making, its mechanisms and consequences is the very core of management, it is virtually impossible to separate the act of manage from this knowledge area. As defined by Herbert Simon – "decision making" as though it were synonymous with "managing". A decision is a selection made by an individual regarding a choice of a conclusion about a situation. This represents a course of behavior pertaining to what must be done or what must not be done. A decision is the point at which plans, policies and objectives are translated into concrete actions. Our behavior during decisive moments is closely linked with our brain dominance profile. Over the years, our decision-making processes develop a consistent pattern, which can be described as a decision-making style. Our style is grounded in our preferences, which arise from our brain dominance characteristics […]. The importance of understanding the impact of our thinking preferences and how to improve the effectiveness as a leader of organizations are the main justifications for this thesis; the main problem addressed is the behavioral profile diversity in a selective Master’s cohort formed by students from several different countries. The research methodology approach has been quantitative, through questionnaire administration using the HBDI (Herrmann Brain Dominance Instrument), a validated framework developed by William "Ned" Herrmann when he was the leader of General Electric's Crotonville facility. This questionnaire has been administered in hundreds of thousands professional, enabling the possibility to establish correlations between a certain group and several historical databases. The selected group of analysis is the first cohort (23 students) from the CIM (Corporate International Master's), a joint program between Georgetown University (USA), ESADE (Spain) and FGV (Brazil). Besides decision preferences, the obtained profile enables the discussion on leadership style, heuristic's pitfalls and a base to compare with future cohorts. The fundamental research question is: how diverse is the dominant decision-making profile for the CIM students?

Increase in Hippocampal Theta Oscillations during Spatial Decision Making

The processing of spatial and mnemonic information is believed to depend on hippocampal theta oscillations (5–12 Hz). However, in rats both the power and the frequency of the theta rhythm are modulated by locomotor activity, which is a major confounding factor when estimating its cognitive correlates. Previous studies have suggested that hippocampal theta oscillations support decision-making processes. In this study, we investigated to what extent spatial decision making modulates hippocampal theta oscillations when controlling for variations in locomotion speed. We recorded local field potentials from the CA1 region of rats while animals had to choose one arm to enter for reward (goal) in a four-arm radial maze. We observed prominent theta oscillations during the decision-making period of the task, which occurred in the center of the maze before animals deliberately ran through an arm toward goal location. In speed-controlled analyses, theta power and frequency were higher during the decision period when compared to either an intertrial delay period (also at the maze center), or to the period of running toward goal location. In addition, theta activity was higher during decision periods preceding correct choices than during decision periods preceding incorrect choices. Altogether, our data support a cognitive function for the hippocampal theta rhythm in spatial decision making

Political Decision-Making in Switzerland. The Consensus Model under Pressure

This in-depth study of the decision-making processes of the early 2000s shows that the Swiss consensus democracy has changed considerably. Power relations have transformed, conflict has increased, coalitions have become more unstable and outputs less predictable. Yet these challenges to consensus politics provide opportunities for innovation.

Reactive, Slow and...Innovative? Decision-making Structures and Policy Outputs

Consensus democracies like Switzerland are generally known to have a low innovation capacity (Lijphart 1999). This is due to the high number of veto points such as perfect bicameralism or the popular referendum. These institutions provide actors opposing a policy with several opportunities to block potential policy change (Immergut 1990; Tsebelis 2002). In order to avoid a failure of a process because opposing actors activate veto points, decision-making processes in Switzerland tend to integrate a large number of actors with different - and often diverging - preferences (Kriesi and Trechsel 2008). Including a variety of actors in a decision-making process and taking into account their preferences implies important trade-offs. Integrating a large number of actors and accommodating their preferences takes time and carries the risk of resulting in lowest common denominator solutions. On the contrary, major innovative reforms usually fail or come only as a result of strong external pressures from either the international environment, economic turmoil or the public (Kriesi 1980: 635f.; Kriesi and Trechsel 2008; Sciarini 1994). Standard decision-making processes are therefore characterized as reactive, slow and capable of only marginal adjustments (Kriesi 1980; Kriesi and Trechsel 2008; Linder 2009; Sciarini 2006). This, in turn, may be at odds with the rapid developments of international politics, the flexibility of the private sector, or the speed of technological development.

Linking the witness simulation software to an expert system to represent a decision-making process

Expert systems, and artificial intelligence more generally, can provide a useful means for representing decision-making processes. By linking expert systems software to simulation software an effective means of including these decision-making processes in a simulation model can be achieved. This paper demonstrates how a commercial-off-the-shelf simulation package (Witness) can be linked to an expert systems package (XpertRule) through a Visual Basic interface. The methodology adopted could be used for models, and possibly software, other than those presented here.

Greening operations: an investigation of environmental decision making

This PhD thesis belongs to three main knowledge domains: operations management, environmental management, and decision making. Having the automotive industry as the key sector, the investigation was undertaken aiming at deepening the understanding of environmental decision making processes in the operations function. The central research question for this thesis is ?Why and how do manufacturing companies take environmental decisions? This PhD research project used a case study research strategy supplemented by secondary data analysis and the testing and evaluation of a proposed systems thinking model for environmental decision making. Interviews and focus groups were the main methods for data collection. The findings of the thesis show that companies that want to be in the environmental leadership will need to take environmental decisions beyond manufacturing processes. Because the benefits (including financial gain) of non-manufacturing activities are not clear yet the decisions related to product design, supply chain and facilities are fully embedded with complexity, subjectivism, and intrinsic risk. Nevertheless, this is the challenge environmental leaders will face - they may enter in a paradoxical state of their decisions – where although the risk of going greener is high, the risk of not doing it is even higher.

A longitudinal study of Chinese managerial behaviour:an inside view of decision-making under the economic reform

This research compared decision making processes in six Chinese state-owned enterprises during the period 1985 to 1988. The research objectives were: a) To examine changes in the managerial behaviour over a period of 1985 to 1988 with a focus on decision-making; b) Through this examination, to throw light on the means by which government policies on economic reform were implemented at the enterprise level; c) To illustrate problems encountered in the decentralization programme which was a major part of China's economic reform. The research was conducted by means of intensive interviews with more than eighty managers and a survey of documents relating to specific decisions. A total of sixty cases of decision-making were selected from five decision topics: purchasing of inputs, pricing of outputs, recruitment of labour, organizational change and innovation, which occurred in 1985 (or before) and in 1988/89. Data from the interviews were used to investigate environmental conditions, relations between the enterprise and its higher authority, interactions between management and the party system, the role of information, and effectiveness of regulations and government policies on enterprise management. The analysis of the data indicates that the decision processes in the different enterprises have some similarities in regard to actor involvement, the flow of decision activities, interactions with the authorities, information usage and the effect of regulations. Comparison of the same or similar decision contents over time indicates that the achievement of decentralization varied according to the topic of decision. Managerial authority was delegated to enterprises when the authorities relaxed their control over resource allocation. When acquisition of necessary resources is dependent upon the planning system or the decision matter is sensitive, because it involves change to the institutional framework (e.g. the Party), then a high degree of centralization was retained, resulting in a marginal change in managerial behaviour. The economic reform failed to increase decision efficiency and effectiveness of decision-making. The prevailing institutional frameworks were regarded as negative to the change. The research argues that the decision process is likely to be more contingent on the decision content than the organization. Three types of decision process have been conceptualized, each of them related to a certain type of decision content. This argument gives attention to the perspectives of institution and power in a way which facilitates an elaboration of organizational analysis. The problems encountered in the reform of China's industrial enterprises are identified and discussed. General recommendations for policies of further reform are offered, based on the analysis of decision process and managerial behaviour.

Dynamic decision networks for decision-making in self-adaptive systems:a case study

Bayesian decision theory is increasingly applied to support decision-making processes under environmental variability and uncertainty. Researchers from application areas like psychology and biomedicine have applied these techniques successfully. However, in the area of software engineering and speci?cally in the area of self-adaptive systems (SASs), little progress has been made in the application of Bayesian decision theory. We believe that techniques based on Bayesian Networks (BNs) are useful for systems that dynamically adapt themselves at runtime to a changing environment, which is usually uncertain. In this paper, we discuss the case for the use of BNs, speci?cally Dynamic Decision Networks (DDNs), to support the decision-making of self-adaptive systems. We present how such a probabilistic model can be used to support the decision making in SASs and justify its applicability. We have applied our DDN-based approach to the case of an adaptive remote data mirroring system. We discuss results, implications and potential bene?ts of the DDN to enhance the development and operation of self-adaptive systems, by providing mechanisms to cope with uncertainty and automatically make the best decision.

Understanding manufacturing companies' environmental decision making structures

This paper provides an understanding of the current environmental decision structures within companies in the manufacturing sector. Through case study research, we explored the complexity, robustness and decision making processes companies were using in order to cope with ever increasing environmental pressures and choice of environmental technologies. Our research included organisations in UK, Thailand, and Germany. Our research strategy was case study composed of different research methods, namely: focus group, interviews and environmental report analysis. The research methods and their data collection instruments also varied according to the access we had. Our unity of analysis was decision making teams and the scope of our investigation included product development, environment & safety, manufacturing, and supply chain management. This study finds that environmental decision making have been gaining importance over the time as well as complexity when it is starting to move from manufacturing to non,manufacturing activities. Most companies do not have a formal structure to take environmental decisions; hence, they follow a similar path of other corporate decisions, being affected by organizational structures besides the technical competence of the teams. We believe our results will help improving structures in both beginners and leaders teams for environmental decision making across the different departments.

Classifying clinical decision making:a unifying approach

This is the first of two linked papers exploring decision making in nursing which integrate research evidence from different clinical and academic disciplines. Currently there are many decision-making theories, each with their own distinctive concepts and terminology, and there is a tendency for separate disciplines to view their own decision-making processes as unique. Identifying good nursing decisions and where improvements can be made is therefore problematic, and this can undermine clinical and organizational effectiveness, as well as nurses' professional status. Within the unifying framework of psychological classification, the overall aim of the two papers is to clarify and compare terms, concepts and processes identified in a diversity of decision-making theories, and to demonstrate their underlying similarities. It is argued that the range of explanations used across disciplines can usefully be re-conceptualized as classification behaviour. This paper explores problems arising from multiple theories of decision making being applied to separate clinical disciplines. Attention is given to detrimental effects on nursing practice within the context of multidisciplinary health-care organizations and the changing role of nurses. The different theories are outlined and difficulties in applying them to nursing decisions highlighted. An alternative approach based on a general model of classification is then presented in detail to introduce its terminology and the unifying framework for interpreting all types of decisions. The classification model is used to provide the context for relating alternative philosophical approaches and to define decision-making activities common to all clinical domains. This may benefit nurses by improving multidisciplinary collaboration and weakening clinical elitism.

Investigating the influence of African American and African Caribbean race on primary care doctors' decision making about depression

This paper explores differences in how primary care doctors process the clinical presentation of depression by African American and African-Caribbean patients compared with white patients in the US and the UK. The aim is to gain a better understanding of possible pathways by which racial disparities arise in depression care. One hundred and eight doctors described their thought processes after viewing video recorded simulated patients presenting with identical symptoms strongly suggestive of depression. These descriptions were analysed using the CliniClass system, which captures information about micro-components of clinical decision making and permits a systematic, structured and detailed analysis of how doctors arrive at diagnostic, intervention and management decisions. Video recordings of actors portraying black (both African American and African-Caribbean) and white (both White American and White British) male and female patients (aged 55 years and 75 years) were presented to doctors randomly selected from the Massachusetts Medical Society list and from Surrey/South West London and West Midlands National Health Service lists, stratified by country (US v.UK), gender, and years of clinical experience (less v. very experienced). Findings demonstrated little evidence of bias affecting doctors' decision making processes, with the exception of less attention being paid to the potential outcomes associated with different treatment options for African American compared with White American patients in the US. Instead, findings suggest greater clinical uncertainty in diagnosing depression amongst black compared with white patients, particularly in the UK. This was evident in more potential diagnoses. There was also a tendency for doctors in both countries to focus more on black patients' physical rather than psychological symptoms and to identify endocrine problems, most often diabetes, as a presenting complaint for them. This suggests that doctors in both countries have a less well developed mental model of depression for black compared with white patients. © 2014 The Authors.

An investigation of Albanian EFL teachers' decision-making in their use of CLT-oriented textbooks

Against a backdrop of ongoing educational reforms that seek to introduce Communicative Language Teaching (CLT) in Albanian primary and secondary state schools, Albanian teachers, among others, are officially required to use communication-based textbooks in their classes. Authorities in a growing number of countries that are seeking to improve and westernise their educational systems are also using communication-based textbooks as agents of change. Behind these actions, there is the commonly held belief that textbooks can be used to support teacher learning as they provide a visible framework teachers can follow. Communication-based textbooks are used in thousands of EFL classrooms around the world to help teachers to “fully understand and routinize change” (Hutchinson and Torres, 1994:323). However, empirical research on the role materials play in the classroom, and in particular the role of textbook as an agent of change, is still very little, and what does exist is rather inconclusive. This study aims to fulfill this gap. It is predominately a qualitative investigation into how and why four Albanian EFL teachers use Western teaching resources in their classes. Aiming at investigating the decision-making processes that teachers go through in their teaching, and specifically at investigating the relationship between Western-published textbooks, teachers’ decision making, and teachers’ classroom delivery, the current study contributes to an extensive discussion on the development of communicative L2 teaching concepts and methods, teacher decision making, as well as a growing discussion on how best to make institutional reforms effective, particularly in East-European ex-communist countries and in other developing countries. Findings from this research indicate that, prompted by the content of Western-published textbooks, the four research participants, who had received little formal training in CLT teaching, accommodated some communicative teaching behaviours into their teaching. The use of communicative textbooks, however, does not seem to account for radical, methodological changes in teachers’ practices. Teacher cognitions based on teachers’ previous learning experience are likely to act as a lens through which teachers judge classroom realities. As such, they shape, to a great degree, the decisions teachers make regarding the use of Western-published textbooks in their classes.

The Role of Social Cognition and Person Perception in Economic Social Decision-Making

Social decision-making is often complex, requiring the decision-maker to make social inferences about another person in addition to engaging traditional decision-making processes. However, until recently, much research in neuroeconomics and behavioral economics has examined social decision-making while failing to take into account the importance of the social context and social cognitive processes that are engaged when viewing another person. Using social psychological theory to guide our hypotheses, four research studies investigate the role of social cognition and person perception in guiding economic decisions made in social contexts. The first study (Chapter 2) demonstrates that only specific types of social information engage brain regions implicated in social cognition and hinder learning in social contexts. Study 2 (Chapter 3) extends these findings and examines contexts in which this social information is used to generalize across contexts to form predictions about another person’s behavior. Study 3 (Chapter 4) demonstrates that under certain contexts these social cognitive processes may be withheld in order to more effectively complete the task at hand. Last, Study 4 (Chapter 5) examines how this knowledge of social cognitive processing can be used to change behavior in a prosocial group context. Taken together, these studies add to the growing body of literature examining decision-making in social contexts and highlight the importance of social cognitive processing in guiding these decisions. Although social cognitive processing typically facilitates social interactions, these processes may alter economic decision-making in social contexts.

Landscape and planning: strengthening discussions in the decision-making process

Since the emergence of the European Landscape Convention (ELC) in 2000, the important link between landscape and planning has greatly intensified. Now, more than ever, the fundamental role of the planning system in delivering the ELC’s requirements is recognised. This has been further substantiated within Ireland’s recently published National Landscape Strategy. However it has continually been suggested that decision-making processes need to adapt better to the holistic, valueladen and multidimensional approaches underpinning the ELC. In light of these milestones for the preservation, management and planning of landscape, this research sets out to establish synergies and disparities in the existing relationship between landscape and planning. It investigates detailed evidence of the presence and manifestations of landscape in key processes of day-to-day planning practice in Ireland, from individual planning appeals and ‘special’ cases, to the major strategic instruments that inform the making of landscape policies within development plans. This is set within wider theoretical and policy contexts where the compatibility of landscape and planning is subjected to critical scrutiny and then explored through these practical case studies. Driving this research is the intention to make a case for the planning domain to be an ideal ‘home’ for landscape – in all its deep, multidimensional meaning – and for enhancing landscape arguments and objectives in the face of conflict, competing values and power-plays in the real world. Emerging out of this research is a set of recommendations for how, at a national level, new approaches for decision making for and about landscape can be more effective and meaningful.