Theories in Psychology

REG520NFB Theories in Psychology

  • Topics


    How to use psychology theory in accounting research.

    This seminar series introduces students to psychological theories used in accounting studies. The coverage is not intended to be extensive, and focuses on the psychological theories used in more recent accounting studies. Each session focuses on one major theory, and begins with a discussion of the specifics of that theory. This is followed by a discussion of two experimental accounting papers that utilizes this theory. The readings in accounting cover domains relate to auditing and financial accounting. It is restricted to papers using the experimental method. In addition to getting students to know the psychological theory, the intention is also that by the end of the course, students will be informed consumers of the literature, and acquire the skills to critically assess a piece of research, in terms of its contribution to theory, implications for practice, and methodology.

  • Learning outcome

    Learning outcome

    The course will give the student knowledge about psychology theories and consider how psychology theory might be used in accounting research.

    After completing the course, students will:

    • Understand psychology theories that might be used to motivate accounting research projects;
    • Demonstrate analytical skills through presentation and discussion of research papers; and
    • Develop research projects that use psychology theories to predict accounting decisions.

  • Teaching


    Intensive classrooms lectures

    Research Proposal:
    Students will have to develop a proposal that involves an experimental investigation of an accounting issue. The objective is to get students involved in the actual creation of a research project, rather than be armchair critics of other people¿s work. In this regard, it is fine if you plan on simple extensions of existing studies.

    Weekly written critiques:
    For each session, students are to submit a write-up for the accounting papers assigned as readings.

    Class Presentations:
    For the psychology paper, the student assigned will offer a synopsis of the key ideas plus a flavor of the design used in an experiment employed in the paper.

    For each of the assigned accounting papers (marked with * in the litterature list), a student will be asked to lead the discussion on the specific paper, which includes a presentation of the conceptual model, key research question and contribution. This student largely plays the role of an advocate of the paper. Another student will be assigned as a critic of the paper. The intention is that the discussion of the advocate and critic will stimulate discussion in class. All students are expected to read all papers for each session thoroughly before class, and engage in meaningful discussions.

  • Required prerequisites

    Required prerequisites

    PhD status

  • Requirements for course approval

    Requirements for course approval

  • Assessment


    Research proposal 30%

    Paper presentation / critiques 70%

  • Grading Scale

    Grading Scale

    Grading: Pass / fail

  • Computer tools

    Computer tools


  • Semester



  • Literature


    1. Accountability

    Lerner, J. S., and P. E. Tetlock. 1999. Accounting for the effects of accountability. Psychological Bulletin 125: 255-275.


    *Jollineau, S. J., L. J. Tanlu, and A. Winn. 2014. Evaluating proposed remedies for credit rating agency failures. The Accounting Review 89(4):1399-1420.

    *Kang, Y. J. 2014. Are audit committees more challenging given a sophisticated investor base? Does the answer change given anticipation of additional mandatory audit report disclosure? working paper.


    1. Prospect Theory/ Mental Accounting


    Kahneman, D. and A. Tversky. 1996. On the reality of cognitive illusions. Psychological Review. 103 (3): 582-591.


    Thaler, R. 1999. Mental accounting matters. Journal of Behavioral Decision Making. 12(3): 183-206.

    *Libby, R. and Tan, H. T. 1999. Analysts¿ reactions to warnings of negative earnings surprises. Journal of Accounting Research 37(2): 415-435.

    1. Attribution Theory


    Malle, B. F. 2011. Attribution theories: How people make sense of behavior. In Chadee, D. (Ed.), Theories in social psychology (pp. 72-95).Wiley-Blackwell.Dual Process Theories

    *Rose, J. M., C. S. Norman, and A. M. Rose. 2010. Perceptions of Investment Risk Associated with Material Control Weakness Pervasiveness and Disclosure Detail. The Accounting Review 85 (5):1787.

    *Elliott, W. B., F. D. Hodge, and L. M. Sedor. 2012. Using Online Video to Announce a Restatement: Influences on Investment Decisions and the Mediating Role of Trust. The Accounting Review 87 (2):513-535.

    1. Motivated Reasoning


    Kunda, Z. 1990. The case for motivated reasoning. Psychological Bulletin 108 (3): 480¿498.

    *Kadous, K., S. J. Kennedy, and M. E. Peecher. 2003. The effect of quality assessment and directional goal commitment on auditors' acceptance of client-preferred accounting methods. The Accounting Review 78 (3): 759¿778.


    *Kirsten Fanning, Christopher P. Agoglia, and M. David Piercey. 2015. Unintended consequences of lowering disclosure thresholds. The Accounting Review 90(1): 301-320.


    1. Benchmark Theory


    Boles, T. L., and D. M. Messick. 1995. A reverse outcome bias: The influence of multiple reference points on the evaluation of outcomes and decisions. Organizational Behavior and Human Decision Processes 61: 262¿275.

    *Han, J., and H. T. Tan. 2007. Investors¿ Reactions to Management Guidance Forms: The Influence of Multiple Benchmarks. The Accounting Review 82 (March): 521-543


    *Elliott, W.B., J. Hobson, and K. Jackson. 2011. Disaggregating Management Forecasts to Reduce Investors¿ Susceptibility to Earnings Fixation. The Accounting Review 86(1): 185-208.


    1. Construal Level Theory


    Trope, Y., & Liberman, N. (2010). Construal-level theory of psychological distance. Psychological Review, 117(2): 440-463.

    *Rasso, J. T. 2014. Of construals and complex estimates: A judgment framework for promoting professional skepticism and effective evidence processing, working paper.

    *Elliott, W. B., S. M. Grant, and K. M. Rennekamp. 2014. How disclosure features of corporate social responsibility reports interact with investor numeracy to influence investor judgments, working paper.


    1. Moral Licensing

    Cain, D., G. Loewenstein, and D. Moore. 2005. The dirt on coming clean: Perverse effects of disclosing conflicts of interest. Journal of Legal Studies 34: 1-25.

    *Rose, J. M., A. M. Rose, and C. S. Noman. 2014. Will disclosure of friendship ties between directors and CEOs yield perverse effects? The Accounting Review. Forthcoming.

    *Jamal, K., Marshall, E., and Tan, H.T. 2015 Does Disclosure of Conflict of Interest Increase or Decrease Bias?. AUDITING: A Journal of Practice & Theory (Forthcoming)


    1. Fluency Alter, A. L., & Oppenheimer, D. M. (2009). Uniting the tribes of fluency to form a metacognitive nation. Personality and Social Psychology Review, 13 (3), 219-235.

    *Rennekamp, K. M. 2012. Processing Fluency and Investors¿ Reactions to Disclosure Readability. Journal of Accounting Research 50(5): 1319-1354.

    *H.T. Tan, E.Y. Wang, and B. Zhou. 2015. How Does Readability Influence Investors' Judgments? Consistency of Benchmark Performance Matters. The Accounting Review: 90 (1): 371-393


ECTS Credits
Teaching language

Course responsible

Course Responsible: Iris Stuart, NHH, IRRR,

Lecturer: Professor Hun Tong Tan, Nanyang Technological University