Behavioral Accounting and its Interactions

Behavioral accounting is a branch of accounting that is related to behavior besides the accounting knowledge. It deals with the attitude and behavior of people when they are encountered with an accounting phenomenon which determines the behavior that they will show in decision‐making. This special area of accounting addresses such aspects as human information‐processing behavior, judgment quality, accounting problems that are created by users and providers of accounting information, and accounting information users’ and producers’ decision‐making skills. Behavioral research tries to find out how individuals make decisions and interact and influence other individuals, organizations, markets, and society. Behavioral accounting concept is examined under the topics of the influence of accounting information on behavior, managerial control (budget participation, nonfinancial measures, leadership, and balanced scorecard), auditing (auditor‐client negotiations, auditor’s judgment, and decision‐making), and ethics (ethical decision‐making, ethical orientation, and rationalizations on unethical behavior) in this chapter.