Purpose: The purpose of this research is to examine whether framing can influence the cognitive perceptions of accountants making financial investment decisions resulting a violation of the rational decision-making model. Design/Method/Approach: A survey of accounting practitioners was undertaken involving random distribution of four versions of a single reinvestment decision task to investigate the influence of framing on the cognitive processing of accounting professionals. The framing was also manipulated using verbal and numerical probabilities. Statistical testing of the hypotheses involved the application of t tests, chi-square tests, ANOVAs and MANOVAs. Findings The results did not follow the direction of risk behaviour predicted by Prospect Theory. That is, in the negative frame, greater risk-avoidance was evident. While in the positive frame greater risk-taking was evident. These findings also failed to demonstrate the predicted outcomes of Image Theory in regards to perception of problem space as the respondent accountants exhibited a tendency toward a controlled mode within their decisionmaking process regardless of framing.
e-Journal of Social & Behavioural Research in Business / Vol. 7, No. 2, pp.1-15