Behavioral Research In Accounting

Volume I. 1989
Printed In USA

The Development of Behavioral

Thought in Accounting,
1952-1981 *
Alan T. Lord t
Case Western Reserve University

ABSTRACT
This paper presents a historical analysis of the development of behavioral
thought in accounting. Representative events, journal articles, books, and
individuals that contributed to the evolution of this multidisciplinary research
area are identified within a temporal perspective.

This paper investigates the literature and events that influenced the
development of what is one of the major accounting research schools of
thought. Behavioral accounting research (BAR) is a multidisciplinary
field that draws from the theoretical constructs of the behavioral
sciences. To appreciate the historical development of this field requires
a common understanding of what constitutes BAR. The term
"behavioral accounting" has no precise definition. As an example.
Bruns noted that" ... the question of how broadly behavioral account•
ing should be defined will have to be solved on an ad hoc basis by each
researcher" [ 1973, p. 124 J. When Hofstedt [ 19761 examined the
literature in BAR he adopted a classification criterion which he
referred to as "I know it when I see it"! [ 1976, p. 47). One of the most
encompassing definitions was provided by Hofstedt and Kinard [ 1970,
p. 43).
Behavioral accounting research may be defined as the study of the
behavior of accountants or the behavior of non-accountants as they
are influenced by accounting functions and reports.
This definition implies that this area of research addresses the
behavior of people as individuals. This would encompass the behavior
of individuals within organizations as well as separate actions that

• invited Paper.
tThe author would like to thank Robert Bricker. David Campbell. Robert Colson. James
Jlambalvo, Lee Parker. Jack Ruhl. Barbara Uliss. the three reviewers. and especially
Gary Prevtts for providing helpful comments on earlier versions of this paper.
I
This same approach was referenced and utilized by Dyckman and Zeff f 19841.

124

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Development of Behavioral Thought 125

might be influenced by accounting functions and reports. Research

into modeled utility functions of individuals (as in agency theory) or
aggregated outcomes of decisions of individuals (as in market based
studies) are therefore excluded. This paper has adopted this broad
definition and has generally refrained from the establishment of
boundaries to this research field.2
During the past 35 years there has been a significant amount of
published research that would fit under the heading of BAR. The
theories supporting this research are derived from a wide range of
interests. The diversity of the research topics is evidenced by Colville's
analysis that "the area is shapeless and its content is fragmented with
little semblance of a coherent structure" [ 1981. p. 1201. This diversity
makes the determination of the historical significance of an event or
publication a highly subjective process.
METHODOLOGY
The investigation of the historical development of BAR necessitates
not only a review of the accounting literature. but also an evaluation of
the relevant literature of the behavioral science disciplines from which
BAR is derived. To develop a structure for evaluating BAR and the
related literature, a criterion with three primary considerations was
established. This criterion is based upon a determination of:
1. The influence an article had upon related BAR.
2. The unique contribution that an event, individual. or article
provided to the development of BAR.
3. The influence of research conferences which discussed BAR.
This paper will use citations as a primary method for determining
the influence that an article has had upon BAR. There have recently
been several applications of citation analysis to assess contributions to
accounting research. The research findings of previously published
studies using this technique will be utilized in this paper. Limitations
and criticisms of citation analysis have been expressed and have been
well documented by accounting writers (Dyckman and Zeff. 1984:
Brown and Gardner. 1985a and 1985bl. However. Brown and Gardner
I l 985b, p. 861 note that "several scientists consider citation analysis to
be the best objective measure available for assessing the impact of
journal articles, institutions. and individuals." This paper does not
2
Slmllar to prior research [Hofstedt, 19751, this paper does not consider reports of
research conducted on the Internal operations or structure of organizations of
practicing public accountants. Examples of this type of study would Include Blocher
(19791, Sorensen [19671 and Watson [19751. The research In human resource
accounting and social cost accounting could be considered related to BAR. but It Is not
strongly linked to a more fundamental social science and therefore has also been
excluded from this analysis. Works representative of this research would Include Elias
[ 19721, Lev and Schwartz [ 19711 and Ftamholtz [ 19711. In addition, unpublished
manuscripts have also been excluded.

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 126 Alan T. Lord

rely exclusively upon a citation analysis approach; rather. it utilizes

published citation analysis research as one component of the criterion
for determining the impact upon BAR of particular articles and
authors.
A second component of the criterion for determining the impact
upon BAR is the consideration of work that initiated a research area or
that exemplified a historical impact upon the development of BAR. One
of the criticisms of citation analysis is that the simple annual citation
counts will decrease with respect to the age of the paper. The
importance of a work that initiated a research area or provided an
otherwise historically unique contribution may not be adequately
reflected in subsequent citation studies. This is especially true if its
contribution has been absorbed into subsequent research or been
heavily discussed in review articles. In addition. much of the previous
citation research into the accounting literature has not reported the
citations of non-accounting ltterature.e This paper has sought to
identify these initial works and others that were historically signifi•
cant. but which have not been identified in previous citation studies.
Conferences dedicated to topics of relevance to BAR represent the
third component of the criterion for inclusion in this paper (e.g..
Studies on Human Information Processing at the University of
Chicago and Behavioral Experiments in Accounting at The Ohio State
University). The convening of a conference dedicated to a specific
research area creates an environment for the sharing of new research
ideas and methodologies in a more timely fashion than through the
published journal literature. In addition, the published proceedings
provide a method for sharing the reported research as well as the
comments of the conference participants.
It is thus from the perspective of these three evaluative frameworks
that the development of BAR is assessed. It is not the intent of this
paper to report everything that has impacted BAR. Emphasis will be on
the items deemed to reflect the development of BAR as determined by
the above criterion. This approach sacrifices the depth of analysis
which has been provided by previous research+ for the breadth of the
historical viewpoint.
FOUNDATION RESEARCH PAPERS IN BAR
Long before the term BAR was in vogue, accountants indicated an
interest in the behavioral aspects of accounting. Ferguson, in 1920,
presented some early thoughts on responsibility accounting [ Green,
1973). Dent, in 1931. presented some early "asides" regarding the
3For an exception see Snowball I 19861.
4For in-depth reviews of this research by specific areas see: Ashton I 19821. Dyckman.
Gibbins and Swterlnga [ 19781. Gibbins I 19771. Libby I 19811. Libby and Lewis I 1977:
19821, Snowball [ 19861 and Swierlnga and Weick I 19821.

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 Development of Behavioral Thought 127

impact that budgets might be having on the attitudes and perfor•

mance of the workers [Parker. 1984).
Argyrts's 11952) research through the Controllership Foundation is
acknowledged as a pioneering investigation of the impact of account•
ing information upon people. His findings on the influence of budgets
upon the motivation and attitudes of individuals In an organization
are the first published research efforts examining the behavioral
effects of accounting information. The dissemination of the results of
this research in the Harvard Business Review [ 1953) also increased
the interest in the behavioral influences that budgets could have on
workers. Argyrts's work is historically important because of the
exposure that it provided to this new direction of research about
accounting information. Criticism of Argyrts's research controls and
conclusions does not detract from this work's importance as a catalyst
[see Anthony. 1960).
The Controllership Foundation also funded another of two addi•
tional significant works produced during the 1950s. Simon. Kozmet•
sky. Guetzkow, and Tyndall ( 19541 prepared a research study and
report to better understand the human behavior in organizations,
specifically through the organization of the Controller's Department. It
was only a few years later that Professor Simon was to influence the
dissertation work of Andrew Stedry (both of whom were at Carnegie
Institute of Technology). Stedry's Bud.get Control and Cost Behavior
11960 ). although primarily a study combining mathematical modeling
with empirical research. also considered the impact of the "reward
structure" upon the users of budgets. As an initial manuscript winner
In the Ford Foundation Doctoral Dissertation Competition. Stedry's
work received additional notoriety and was subsequently published by
Prentice-Hall.
Although the 1950s were the genesis of research interests regarding
the influence of accounting information upon human behavior, the
academic accounting literature contained no research directly con•
cerning human behavior. The primary academic research outlet
during this time was The Accounting Review (AR). Most of its main
articles, other than those devoted to educational topics. were devoted
to normative research or framework building. These two types of
research either advocated specific accounting treatments or developed
a preliminary forum that would eventually lead to further research in a
specific area [Dyckman and Zeff. 1984). It was not until 1960 that the
accounting literature began to include regular contributions discuss•
ing the behavioral aspects of accounting.

A DECADE OF AWAKENING-THE BEHAVIORAL ELEMENTS

The 1960s have been called the "Decade of Awakening" in the
literature of accounting research [Dyckman and Zeff. 19841. and this

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 128 Alan T. Lord

was especially true for BAR. It was a time when the academic
community began to broaden the research horizons by examining the
implications that accounting statements and information had upon
decision makers. This supplemented traditional concerns in con•
nection with normative issues regarding the preparation of account•
ing reports. BAR was first published in the academic accounting
literature in AR. The first accounting research conferences in the
United States were soon assembled and several of these were devoted to
behavioral issues. The founding of the Journal of Accounting
Research (JAR} in 1963 was also a significant step in supporting the
growth in BAR.
Carl Devine ( 1960 I was the first contemporary academic accounting
researcher to consider the psychological attitudes of the consumers of
accounting information. His poignant opinion regarding the lack of
concern for the behavioral aspects of accounting is clearly demon•
strated in this often cited paragraph:
Let us now turn to that part of accounting which is related directly
to the psychological reactions of those who consume accounting
output or are caught In Its threads of control. On balance it seems
fair to conclude that accountants seem to have waded through
their relationships to the Intricate psychological network of human
activity with a heavy-handed crudity that Is beyond belief. Some
degree of crudity may be excused in a new discipline. but failure to
recognize that much of what passes as accounting theory is
hopelessly entwined with unsupported behavior assumptions is
unforgivable. [Ashton, 1982. 1984; Hofstedt and Kinard. 1970:
Dyckman and Zeff, 1984 I
Devlne's comments issued a challenge to accounting researchers to
consider the purposes of accounting from a broader perspective. In
addition, he was the first accounting researcher to recognize the
importance of Brunswtk's lens model in the analysis of human
behavior and accounting Information [Devine. 1985, pp. 65-68].s
Devine's foresight can best be appreciated when one recognizes that a
significant portion of the accounting research related to human
information processing that was conducted in the 1970s and 1980s
was based upon an understanding of Brunswtk's model. In addition.
his numerous essays on the behavioral considerations of accounting
have been noted as an "outstanding contribution to accounting
literature ... [which) should be required reading for anyone con•
templating research in behavioral accounting" (Caplan, 1987, p. 414 ].

50evlne's Essays in Accounting Theory were Initially privately published and

distributed. In 1985. the full five volume series was published as Studies in Accounting
Research 22 by the American Accounting Association. It Is this currently available
version to which all references will be made.

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 Development of Behavioral Thought 129

The early 1960s also saw an increased concern in the professional

community over the type of communication that accounting might be
providing to the consumers of accounting information. Davidson and
Trueblood highlighted these concerns by stating that one "of the
challenges that accounting faces today and in the future ... may be
characterized as accounting for dectston-rnaktng" I 1961. p. 577].
Many of these early BAR attempts dealt with the effect that various
applications of accounting data could have upon the actions of
individuals. Benston ( 1963 J surveyed the non-accounting literature
directly related to motivation of employees through the organization
structure and discussed the requirements that these structures place
upon the development of an accounting system. He concluded that the
accounting system itself can have an "indirect but important impact
on motivation." The following year Golembiewski I 1964 J utilized
traditional theories of organization to develop a structure for
contemporary accounting theories. Both of these articles were widely
read and have been often cited by subsequent researchers I Brown and
Vasarhelyl, 1985 ). They contributed to an increasing awareness of
BAR by their well developed descriptive and analytical analysis, not
through the provision of empirical evidence to support their con•
clusions.
The advent of JAR encouraged empirical support for a priori theory
developrnent.e The first behaviorally oriented article in JAR was
published in 1963. Once again Carl Devine I 1963 I was the leader. The
paper. although not an empirical study, considered the effect of
conservatism upon the psychological reactions of readers of financial
statements.
The following year JAR, in keeping with its encouragement of
research supported by empirical evidence, published the first empiri•
cal BAR papers ever to appear in an accounting academic journal.
Dyckman I 1964 J used a simulation technique with an experimental
design to investigate "whether or not the various alternatives available
to the accountant in the presentation of financial data evolving from
identical facts could have an effect on business decisions." A study by
Sorter et al. ( 1964 J was one of the earliest in the accounting literature
to use a survey questionnaire to gather empirical evidence to test a
specific hypothesis.
The first of the University of Chicago's annual Conferences on
Empirical Research In Accounting (ERA), was held in 1966. The
proceedings were published in a supplement to JAR.. These confer•
ences were soon to become an important forum for the presentation of

6
Whlle It Is not the purpose of this paper to review events surrounding the development
of JAR (See Dyckman and Zeff, 1984). It Is Important to recognize the significance It
had upon the development of BAR.

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 130 Alan T. Lord

new empirical studies in BAR. In the same year. the Ohio State
University held the first two of several symposia that were dedicated to
the expansion of knowledge of the behavioral implications of account•
ing. The proceedings of these symposia were made available under the
title The Use of Accounting Data in Decision Making [Burns. 19671.
AR was beginning to publish more BAR including one which would
become one of the most heavily cited ( Brown and Vasarhelyi, 19851
behavioral works of the 1960s, Caplan's "Behavioral Assumptions of
Management Accounting" ( 1966 ). This paper developed two sets of
assumptions representing the effects that a management accounting
system would have on human behavior in business organizations.
Caplan's development contrasts a system that would be based upon
classical management theory with the evolving behavioral science
viewpoint. identified as modern organization theory. The classical
approach stressed the maximization of the organization's profits. The
modern approach stressed the organizational processes of com•
munication and decision making. In addition to developing the
assumptions, Caplan followed his own suggestions and conducted a
research study to obtain empirical support for his primary concepts
[Caplan, 1968).
The 1967 ERA Conference included Selwyn Becker, a member of the
faculty of psychology at the University of Chicago. as a critical
evaluator of the behavioral research conducted by accountants.z Over
the next few years Becker's primary contribution to the development of
BAR would be as a regular discussant of early behavioral accounting
papers. His comments tended to supply a quite different perspective
than that held by the authors of the work he evaluated. His criticism of
Cook's ( 1967 J research of the psychological effect of performance
reports suggested many areas for improvement in the design and
controls of future experimental work in accounting (Becker, 1967).
David Green, one of Becker's colleagues at the University of Chicago.
noted that "Becker's criticisms are always provocative. more often than
not correct, sometimes unduly harsh and occasionally wrong" I Green,
1973, p. 97). Becker's opinions and viewpoints were respected,
however. as evidenced by his Invitations to conferences away from the
University of Chicago. most notably at the Ohio State University in
1968 and the University of Kansas in 1969.
With another accounting symposium held in 1968, the Ohio State
University was beginning to provide an additional forum to discuss the

7 Although Becker had been a coauthor of business and/or accounting research

monographs [Sorter et al .. 1964; Becker and Green, 1962 and 19641 this was the first
of several occasions where he would provide his analysts of behavioral research by
accountants.

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Development of Behavioral Thought 131

behavioral aspects of accounting information. This symposium was

designed to create an interdisciplinary discussion between corporate
executives. accounting researchers. psychologists and organization
theorists. Its format was unusual in that the papers themselves were
written by corporate executives discussing the experiences that they
faced in their own organizations. Written critiques of these papers
were then provided by several notable scholars. including Becker,
Stedry. and Devine I Burns. 1970 I. The significance of this conference.
in retrospect, can be inferred by considering the list of participants
and attendees, which included several of the most prolific and
important scholars in accounting during the last 20 years. A partial
listing would include Bailey, Bedford, Birnberg, Brummet, Bruns.
Caplan, Devine. Dickhaut, Felix. ljiri, and Stedry.
The most often cited behavioral article that was published in the
1960s appeared in the Autumn 1968 issue of JAR [Brown and
Vasarhelyl, 19851. This research utilized questionnaires administered
to supervisors and their subordinates to obtain correlational informa•
tion about budget pressures and leadership dimensions I Decoster and
Fertakts, 19681. This study was important because it was one of the
first to indicate that subordinates may perceive a supervisor as
becoming more considerate of their needs as budget pressure
Increases. This was contradictory to previous studies [Argyrts. 19521
and led the way to additional research in this area.
Birnberg and Nath's I 1968) analysis of the problems associated with
adapting laboratory experimentation to accounting research also
became an influential BAR paper [Snowball, 1986). It emphasized the
significance of building a formal model prior to the development of the
experimental hypotheses. An expectation of the subject's actions
should then be predictable from the formal model. The appropriate•
ness of the specific experimental task and its relationship to the
reward structure were also highlighted.
It has been pointed out that the 1960s were a "Decade of Awakening"
for the behavioral literature in accounting. Several of the scholars of
the time addressed the challenges of the 1950s and early 1960s and
developed research studies to investigate the effect that accounting
information had on consumers. It was only appropriate that the
decade ended with the publication of a compilation of much of the
important research relating to the behavioral implications of account•
ing [Bruns and Decoster. 19691. Although it does not represent a
complete source book on all BAR produced during the decade. it serves
to provide a handy reference to many of the articles. In a period when
the growth of this research area depended on the communication of
the current literature as efficiently as possible, this text can be seen as
an important historical event.

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 132 Alan T. lord

A DECADE OF INTEREST EXPANSION IN BEHAVIORAL TOPICS

BAR Achieves Recognition
By the end of the 1960s, interest in investigating the behavioral
influences that accounting information had on individuals and
organizations was rapidly growing and led to a dramatic increase in
the number of published studies. Swieringa and Weick [ 1982 [ list over
100 experiments that were published in Accounting. Organizations
and Society (AOS), AR. and JAR between 1970 and 1981. The
inclusion of nonexperimental studies and work published in other
outlets would increase this number. For example. the 1970s also saw
BAR appear in academic journals outside of the United States.
Although the volume of BAR published outside of the United States
prior to AOS is not large, McRae I 197 l I and Lee I 197 l J published
introductory papers in Accounting and Business Research and
Benjamin and Strawser's paper I 1974) reported on one of the few
behavioral experiments published in ABACUS.
The modest findings of the studies in the 1960s, and their
acceptance by the academic journals, seemed to kindle interest in
BAR. The complexity of human actions, and the numerous ways they
could be affected by accounting information. led to a variety of
potentially provocative research questions.
The areas of potential investigation and the flexibility to establish
individual research goals provided excellent opportunities for many
researchers. Others. however. saw these features as a "concern."
Hofstedt and Kinard ( 1970 I stated that an overall strategy was needed
to achieve optimal progress toward solving the many behavioral issues
related to accounting. Their viewpoint was that the progression of
works discussing behavioral accounting issues did not allow for any
synergism because a common element to link the research hypotheses
seemed to be missing. They explained that to "advocate a commitment
to behavioral research is not enough. In addition. there must be
I emphasis added I an overall plan. a framework to guide both the form
and the substance of the research" I 1970, p. 45).
Although concerns appear to have existed over the direction and
growth of BAR, Hofstedt and Kinard's reservations were not the only
point of view. Green found the idea of an overall strategy to be
"galling." particularly in light of the lack of empirical evidence
presented to advocate the development of such a strategy I Green.
1973[.
An analysis of early studies indicates that they did address a wide
range of issues and often were not well grounded theoretically. It could
be argued that this was more a result of"learning curve" phenomenon
with behavioral issues rather than a weakness to be solved by the
development of an overall strategy. The continuous development of

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Development of Behavioral Thought 133

BAR did not lead to an overall strategy. but there was a realization that
the studies needed to adopt more common theoretical constructs from
the behavioral sciences. These concerns were expressed by the
American Accounting Association Committee on the Relationship of
Behavioral Science and Accounting:
... as behavioral accounting has evolved, anything behavioral has
been considered "good." Empirical behaviorism, however theory·
free or ill-conceived. has been an almost sure ticket to success in
accounting circles. Few accountants knew anything about behav•
ioral science, so that behavioral accountants enjoyed the benefits of
one-eyed men In the land of the blind. I 197 41
In general, accounting doctoral program curricula of the 1950s and
1960s did not require courses in the behavioral sciences (Stone,
19651. As the volume of published behavioral studies increased, some
accounting doctoral students elected to pursue courses in psychology
and other related behavioral science disciplines. This shift in academic
training, combined with a dedicated effort by interested accounting
faculty to enhance their own backgrounds in these areas, led to
significant improvement in the research methods underlying the BAR
studies in the 1970s. Considered in perspective, the early 1970s
introduced research areas and methods that would provide the basis
for a significant portion of the BAR of the late 1970s and early 1980s
(Snowball, 19861.
As the research literature began to include more behavioral issues, it
was necessary that effort be devoted to developing the educational tools
needed to present this knowledge in a classroom environment. To
address this problem. Caplan used his 1966 and 1968AR articles as a
basis for his text Management Accounting and Behavioral Science
I 1971 ). This concise work provided a convenient method for behav•
ioral topics to be introduced into undergraduate and graduate courses
in cost and management accounting.

The Introduction of Behavioral Studies in Human Information

Processing
Certainly one of the most extensive areas of BAR during the last 15
years has been related to the human information processing (HIP) view
of accounting information. The effort to understand the complex
human judgment process was first applied to an accounting problem
when Slovtc I 1969 I studied two stockbroker's judgments and deter•
mined that they appeared to utilize financial indicators to create a
gestalt opinion of a firm rather than as additive components to a
decision process. Slovic was also the first author in subsequent works
I Slovtc and Lichtenstein, 1971: and Slovic et al., 1977 J that have
become two of the four most frequently cited articles in accounting

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 134 Alan T. Lord

laboratory experiments on human judgments [Snowball. 1986). There

are four primary research approaches in HIP:
( 1) lens model
(2) probabilistic judgment
(3) cognitive style
(4) predecisional behavior.
The growth of each of these approaches can be traced to events in
1972. The first three approaches were utilized in an accounting
research context and introduced to the accounting literature in 1972
or early 1973 by Barefield [ 19721. Mock, Estrin, and Vasarhelyi ( 19721.
and Dickhaut I 1973). Although the basic line of research had been a
part of psychology for more than ten years. Newell and Simon's Human
Problem Solving. which was published in 1972, is often cited as
providing a foundation for the theory of problem solving or predectsion
analysis I Snowball. 1980; Libby. 1981 ; Dillard. 1984 J.
The interest in human decision processes was certainly not a
research interest unique to accounting. A relatively small number of
psychologists were actively conducting studies in the area. and one of
the most important articles was Tversky and Kahnemans "Judgment
under Uncertainty: Heuristics and Biases" I 1974]. Libby emphasized
the importance of this work when he noted that most "recent
theoretical and empirical analyses of human inference processes are
based on (this) seminal work" I 1981. p. 58). Recognition of the
importance of this article Is also demonstrated by the fact that
Snowball's citation analysis work found it to be the most often cited
article influencing laboratory experiments concerned with judgments
and decisions made in accounting contexts [ 1986 J.
Since its inception in 1963, and especially since the beginning of the
ERA conferences in 1966, JAR had played a role in developing interest
in BAR. Beginning in 1974 the content of the conference papers
became devoted to research on annual topical issues.e This change,
however. does not appear to have reduced JAR's significant influence
upon BAR. That same year JAR published the most important
experimental study investigating HIP in an accounting context
I Snowball, 1986 J. It was an early lense model study and was the first of
Robert Ashton's contributions to BAR. One of the innovative features
of his research was the introduction of the use of dichotomous internal
control factors as cues in an orthogonal design I 197 4a ). Brown and
Gardner [ 1985b, p. 102) reported this research to be "the single most

11The 1976 topic of .. Studies on Human Information Processing In Accounting" has been
the only conference exclusively related to BAR.
9
Lcns's model studies Investigate the relationships of cues upon judgments and can be
traced to the seminal work of Brunswik 119521.

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 Development of Behavioral Thought 135

highly cited behavior paper by CAR I Contemporary Accounting

Research J when journal self-citations are included." In the same year,
Ashton reported additional results of his work in two other journals
[ 1974b, 1974cl. The beginning of Ashton's HIP research is. in itself. of
significance to the development of BAR since he and Libby would
eventually each account for almost 20 percent of the 22 most heavily
cited accounting papers and studies related to HIP [Brown and
Vasarhelyi. 19851.
The first of Libby's contributions to HIP include a discussion of the
use of simulated decision makers [ 1975bl. and an experimental study
using accounting ratios for predictions I 1975a).
Tomassini referred to these five papersro when he stated that "these
two pioneers gave much needed credibility to the area (BAR) with their
applications of Brunswlk's lens model paradigm to accounting and
auditing. They not only opened the eyes of many young accounting
researchers. but they also communicated their work and gained the
serious attention of psychologists to our discipline" [ 1984, p. 243).
Much of the cognitive style (and cognitive complexity) research
approach in HIP in accounting contexts ts derived from the informa•
tion processing models of Schroder, Driver, and Streufert [ 1967).11 In
1975, Driver and Mock reported empirical results of an accounting
gaming experiment that indicated differences in feedback information
preferences that were dependent upon the decision style of the
decision makers. This early study impacted much of the subsequent
work in this area. Evidence of this can be seen by the fact that it has
been cited more often than any other cognitive style research in
accounting [Brown and Vasarhelyi, 19851.

Behavioral Research Relative to Budgeting and Organizations

Continues
Although HIP research was beginning to represent a significant
portion of the BAR being published, other scholars were continuing to
work on the effect of accounting information in a managerial
environment. In 1975, the National Association of Accountants. which
had been supportive of behavioral research in accounting for several
years.is published Some Effects of Participative Budgeting on
Managerial Behavior by Swieringa and Moncur. This monograph was

10
Along with a subsequent study by Libby ( 19761.
11
Additional experimental work in this area of BAR would include Barefield I 19721.
Mock. Estrin, and Vasarhelyi ( 19721. Dermer I 19731. San Miguel I 19761. Savich
11977), Vasarhelyt ( 19771. and McGhee. Shields. and Birnberg ( 1978).
12
The Foreword to Swiertnga and Moncur's text reports a Behavioral Science
Symposium held at the University of North Carolina In 1970. and the development of
an advisory committee to support behavioral science research In accounting.

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 136 Alan T. Lord

a continuation of their earlier work which described the association

between participative budgeting and managerial behavior ( Swtertnga
and Moncur. 1972).
There were also three other studies published in 1975 that would
eventually be among the ten most cited behavioral accounting works
not related to HIP. Two of these related to the effects of budgets on the
motivation of employees. Milani ( 1975 J concentrated on the perfor•
mance and attitudes of industrial supervisors who participated in the
budget setting process. whereas Ronen and Livingstone ( 1975 J
utilized an expectancy theory approach from psychology to determine
the impacts of budgets. The third study, Bruns and Waterhouse
I 1975 J, was one of the initial accounting articles to utilize the
contingency theory of organizations. They reported empirical evidence
to support the hypothesis that a portion of budget induced behavior
was related to organizational structure. This was in contrast to prior
studies I DeCoster and Fertakts, 1968; and Swieringa and Moncur.
1972, 1975 I which had concentrated on the relationship between
interpersonal variables and budgetary control. This new work would
eventually become the most cited work related to budgets (Brown and
Vasarhelyi. 1985 J and the "single most highly cited behavioral paper
(by CAR) when journal self-citations are excluded" [Brown and
Gardner, 1985b, p. 102).

HIP Receives Further Attention

The subject of the annual research conference at the University of
Chicago in 1976 was "Studies on Human Information Processing in
Accounting." The conference contributed to the development of BAR
since a subsequent JAR Supplement was dedicated to HIP and
provided a prominent means of identifying this area of research.
Furthermore, the written and oral discussions of the papers at the
conference afforded researchers a venue to share their comments on
the research. Several papers is presented at the conference would later
be among the 30 most cited HIP works in the accounting literature.
Dyckman and Zeff I 1984 I noted that JAR's "contribution ( to
behavioral research I has been paramount in the area of behavioral
research that emphasizes the individualistic and psychological
implications of the field" (pp. 273-4). However. this focus was not
favorably looked upon by all researchers, and in 1976 Anthony
Hopwood became the editor of a new journal. Accounting. Organiza•
tions, and Society (AOSJ. Hopwood. in a letter to Dyckman and Zeff in
1983. explained that AOS was started, at least in part. because of
JAR's heavy emphasis upon HIP ( Dyckman arid Zeff. 1984, note 351.

13
Ashton I 19761. Joyce 119761. Swiertnga et al. I 19761. and Einhorn 11976}.

Copyright© 2001 . All Rights Reseved.

 Development of Behavioral Thought 137

Hopwood's personal research had often investigated accounting data's

role in an organizational context. His first contribution to the U.S.
academic accounting literature, "An Empirical Study of the Role of
Accounting Data in Performance Evaluation," [ 19721 eventually
became the third most often cited behavioral study that did not utilize
HIP [Brown and Vasarhelyi, 1985). AOS, however, certainly has not
excluded work that has been influential to research in HIP. On the
contrary, four of the six largest citation indexes for articles con•
centrating on HIP were associated with work published in AOSJ4
(Brown and Vasarhelyt, 1985).

AOS Influences the Development of BAR

The founding of AOS can be asserted as having more of an influence
upon the stream of BAR publications than any single episode in the
1970s. Since its initial issue, AOS "has published a substantial
amount of[BARJ papers (49.0%). more than twice as many percentage
wise as were published by the AR and JAR combined during the
1976-1984 period (23.6%)" (Brown et al., 1987, p. 3J.1s
In addition to founding AOS in 1976, Hopwood also wrote a text.
Accounting and Human Behavior, which was published in the United
States as a part of the Prentice-Hall Contemporary Topics in
Accounting Series.1a The text concentrates on the behavioral effects of
accounting on organizational issues such as budgeting, performance
evaluation, cost control and decision making.
The growth of any field within a discipline is dependent upon many
factors. One of the most important of these is the ability of the
vanguard of researchers to attract and prepare quality doctoral
students who will continue the development of the research area.
Libby received his Ph.D. in 1974 and published his first accounting
articles in the following year while on the faculty at the Pennsylvania
State University. In 1977 and 1982 he coauthored with Barry Lewis, a
doctoral student at Penn State in 1977, two "State of the Art" review
papers on HIP research in accounting. These works, which were both
published in AOS. would become the first and fourth most cited HIP
articles in Brown and Vasarhelyi's Accounting Research Directory
[ 1985). The studies by Libby and Lewis are organized by each of the
four HIP research approaches (listed above) and the decision makers:
research design. variables. task and results are summarized. Sugges•
tions for future research, many of which were followed between 1977

14
0ne of the other two, Ashton [ 1974), was published prior to the initial Issue of AOS.
15
Sec Brown, Gardner, and Vasarhelyl [ 19871 for a more extensive discussion of the
specific research contributions of AOS.
16
Thls text was first published In Great Britain In 1974 by Accountancy Age Books.
Haymarket Publishing Limited. London. England.

Copyright© 2001. All Rights Reseved.

 138 Alan T. Lord

and 1982, were made at the conclusion of both articles. The

collaboration of Libby and Lewis, and other faculty/doctoral student
combinations,17 is a strong indication of the continued long term
growth of interest in an academic research area.
Most of the research in HIP had concentrated on the influence of
available information upon an individual's behavior. Prakash and
Rappaport [ 19771 introduced the idea that an individual's behavior is
also a function of the information that is required to be provided. They
used the term "information inductance" to refer to the influencing
process that information required to be communicated would have
upon the decision maker. They also provided illustrations of its
potential effect upon internal and external accounting information.
Hayes's [ 19771 American Accounting Association Manuscript Con•
test winning paper, "The Contingent Theory of Managerial Account•
ing." was very influential in the development of contingency theory
applications in accounttng.is His model stresses the influence of
internal, interdependency and environmental factors upon sub-unit
performance. Empirical tests were also reported which supported all
three contingencies.
The following year AOS devoted an entire issue to studies investigat•
ing the relationships between the organization and its accounting
information systems. Hopwood I 1978 I introduced the articles in this
issue by presenting a review of the prior literature. Also in this issue
was the first of two joint papers by Waterhouse and Tiessen [ 1978 J
utilizing the contingency theory framework.rs They developed a model
to identify control requirements of various types of organizations
based upon a contingent relationship between organization structure
and the design of management accounting systems. This work has
had a significant impact upon contemporary accounting research, and
especially BAR published in AOS [Brown and Gardner. 1985bl.
The most influential BAR published in JAR in 1978 was Otley's
[ 1978) work in budgeting. He reported the results of a study designed
to examine the effect on managerial performance caused by varying
styles of budgets. His results reported different effects than those
found by Hopwood [ 1972 J and had a significant influence upon
subsequent works in the area. Brown and Vasarhelyi ( 1985 J listed this

17
Other examples of faculty/doctoral student combinations would Include Mock. Estrin.
and Vasarhelyi ( 1972) and Dickhaut and Eggleton ( 1975). ·
18
Thls paper exemplifies the subjectivity of classification of similar work. Brown and
Vasarhelyl I 1985) did not classify It as a behavioral work. although Brown and
Gardner ( l 985b) note it to be one of the ten most Influential articles to AOS research
and list It as a behavioral topical area. If It would have been classified as such in Brown
and Vasarhelyi I 1985). It would have become the second most highly cited behavioral
work that was not related to HIP.
19
The second paper was Tiessen and Waterhouse { 19831.

Copyright© 2001. All Rights Reseved.

 Development of Behavioral Thought 139

paper as having the fourth highest citation index for all BAR outside of
HIP.
Studies investigating the theory of human problem solving based
upon Newell and Simon ( 1972 J were beginning to be published in the
late 1970s. Although much of the initial work examining predecisional
behavior was not conducted in an accounting environment. its
influence was significant. Payne. Braunstein, and Carroll I 19781
provided a detailed description of the three primary predecisional
behavior data collection techniques: verbal protocols, explicit informa•
tion search, and eye movements. The application of these measure•
ment methods to business decision research is discussed in Libby
I 1981 I. Libby and Lewis ( 1982) identify two studies (Payne. 1976 and
Elstein et al .. 19781 that have had the "greatest influence" upon recent
interest in this area of research. Payne ( 1976 J utilized an experimental
design to study task complexity's influence upon decision strategy
selection. Elstein, Shulman, and Sprafka's [ 1978) text reports a series
of experiments in a medical environment. Libby and Lewis I 1982, p.
265 I reported that "these two studies were a major step in the direction
of overcoming many objections concerning the validity of this research
and indicated how it could be related to the accountant's interest in
improving the quality of decisions" (emphasis in original).
An important element in the historical growth of BAR was the
supportive environment provided by the doctoral programs of several
schools. Snowball's ( 1986 J study indicates that the graduates from the
Ohio State University are leaders in contributions to accounting
.\.atmr..Rf-n'J' ��r..i..�.�t-5' .1.� .w.o\v.u>.� J\!.��w. 20 -� r.notlouiqg positive
factor on the Ohio State environment has been Thomas Burns who. in
1978, organized a fifth symposium related to BAR. Proceedings of the
last two Ohio State conferences were published as Behavioral
Experiments in Accounting [Burns. 1972, 19791. These conferences
adopted a format which had accounting research papers critiqued by
researchers in other disciplines. One of the subtle benefits of these
conferences was the unique opportunity they provided to the resident
doctoral students at Ohio State. The exposure to the presentations and
discussions at the conferences was a learning experience not typically
available at most other institutions.

SUMMARY AND CONCLUSIONS

By the 1980s BAR had developed from the initial work by Argyris
I 1952 I and the admonishments by Devine ( 1960 I into a more mature
and accepted accounting research area. The primary focus of this
paper has been upon events and published work prior to 1980.

2
°Followed by Texas, Illinois. and Minnesota.

Copyright© 2001. All Rights Reseved.

 140 Alan T. Lord

Although it would be immediately possible to identify work that

initiated a research area in BAR. the passage of time is required to
determine the impact of the work upon the long term development of
BAR. Therefore, this paper does not address the current developments
in BAR.
A historical review of a research area is faced with methodological
difficulties as it approaches the most current literature. The method•
ology of the research for this paper has relied upon a criterion based
upon the determination of:
1. The influence an article had upon related BAR.
2. The unique contribution that an event. indtdtvual. or article
provided to the development of BAR.
3. The influence of research conferences which discussed BAR.
The operational definitions used for these components of the criterion
lose validity as the time between the events and the review diminishes.
In particular. the use of citation analysis as an indicator of an
article's influence is dependent upon the passage of time. Brown and
Gardner [ l 985b I note that the increasing age of a paper decreases the
probability of a citation. From a historical perspective, this is a positive
condition. If an "older" paper is still often being cited, then its
influence has probably been greater than more recent work that is
cited at the same frequency. Very recent work, however, also has a
lower probability of citation. There is a time lag before a paper which
will be influential to a research area will appear as a citation by other
research. This characteristic exists due to the time required to have
the article assimilated into current research and to have a new paper
proceed through the academic publication process.
This paper's focus upon events prior to 1980 should not be
construed as an indication that there were no significant activities
subsequent to that time. Rather, it is the passage of time that will
allow the necessary perspective to evaluate this subsequent research.
Two events in the 1980s can be supported as being important to the
development of BAR, and may eventually be two of the more significant
events of the decade.
The establishment of the Accounting, Behavior and Organizations
Interest Section by the American Accounting Association in 1981 was
one indication of an acknowledgement of the growth in interest in
BAR. It may also be considered to identify the conclusion of the
important stage of Initial development of BAR and the entering of a
stage of more mature development. One purpose of the new section
was to provide a "means by which a wider membership can become
more familiar with behavioral and organizational constructs and their
Implications for accounting" [AAA. 1981 ). Of course, it is this desire to
increase awareness of BAR that has led to this new journal.

Copyright© 2001. All Rights Reseved.

 Development of Behavioral Thought 141

The second event was the publishing of Libby's I 1981 I Accounting

and Human Information Processing: Theory and Applications.
Brtcker's I 19871 analysis of contemporary accounting literature
indicates that this text has already become the most heavily cited BAR
related publication. Libby's purpose was "to synthesize the psychology
and accounting literature in a form comprehensible to accounting
students and practitioners who have little formal training in the
behavioral sciences" [Libby. 1981. p. xiii. The large amount of
citations that this text has already received indicates the influence
that it is currently having upon accounting research in BAR.
This paper has provided some insight into the events surrounding
the development of BAR. It has not been possible to provide a
description or analysis of all of the published research in this area.
Rather, the focus has been upon the literature and events that have
been determined to be most influential to BAR's development. The
historical perspective required to analyze these events is dependent
upon the passage of time and therefore the focus of this research has
been on the events prior to the 1980s.
Table 1 presents a multidimensional analysis of the publications
and events discussed within this paper. Its chronological orientation
highlights the timing of the activity within the major research areas.
The publication sources provide additional information regarding the
influence that particular journals had upon each research area. The
table is not designed to identify every item discussed within this paper.
Rather it should provide a perspective on the dynamics of the
development process of BAR prior to the 1980s. It is left to future
research to evaluate the eventual historical sigtffcance of con•
temporary BAR.

Copyright© 2001. All Rights Reseved.

142 Alan T. Lord

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Development of Behavioral Thought 143

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Copyright© 2001. All Rights Reseved.
144 Alan T. Lord

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