Accounting in Context for Behavioral and Experimental Finance

Question: Discuss about theAccounting in Context for Behavioral and Experimental Finance. Answer: Accounting is always prone to various updation with the continuous passage of time due to which numerous concepts, as well as regulation, came into existence. It helps the accountants to provide a clear picture. Various notions in the theories of accounting can be considered to be influenced by subjectivity as the loopholes are not challenged by the regulations. Accounting as a tool can be termed as subjective, however, when it comes to accountants and the goodwill of the company it is misguided to become subjective in nature because the areas are not explored. Objectivity, neutral and value-free can be termed as a myth in the course of accounting. As discussed by Hellmann (2016), objectivity happens when the decision made in accounting are free from notions or personal thoughts of the accountants. It is critically stated that if the accountants provide their personal view then it cannot be termed as objective in nature. However, it needs to be noted that the accountants play a pivot al role because as per the situation he applies his skills and ability. When it comes to motivation of impression management three major motivations can be suggested. Firstly, the managers engage in behavior that is opportunistic in nature that leads to maximization of return and lessens the punishment on an expected note. The attainment of one or many goals or the maximization of social and material results can motivate the behavior. Moreover, the value of the outcomes those are desired impact the behavior of the impression management. When the outcomes are backed by higher value, the motivation is higher for the impression management. Further impression management behavior is even influenced by the desired and the social image that is available at the present. Secondly, Norris (2011) projects that impression management resides on the current, as well as future image of the manager that influences the strategies undertaken. Public failures may influence the individuals to get associated with impression management so that the damaged image can be repaire d. Thirdly, the preference for higher status leads to impression management. Impression management is undoubtedly a process that is fundamental and universal in nature that leads to an enhancement of the of the image of oneself in the eyes of others. It is very helpful in the sense that it provides people with the requisite skills to build a custom perception. The perception that is set in the mind of the people enables the person to build a better and enhanced version (Hellmann et. al, 2017). Hence, this process, in reality, helps in crafting new relationship and position gets altered in the society. Impression management is a common process that attracts social, as well as cultural implications enabling people to have a better version in the eyes of the public (Zinko Rubin, 2015). Going by the discussion, it can be commented that impression works in reality as it is the perception of every individual to strive for the better. References Hellmann, A 2016, The role of accounting in behavioural finance, Journal of Behavioral and Experimental Finance, vol. 9, pp. 39-42; Hellmann, A, Yeow, C de Mello, L 2017, The impact of information presentation order on the judgments of non-professional investors, Accounting and Business Research, vol 47, no.4, pp. 455-470 Norris, A.R 2011, Impression Management: Considering Cultural, Social, and Spiritual Factors, viewed 28 March 2018 Inquiries Journal/Student Pulse https://www.inquiriesjournal.com/a?id=553 Zinko,R Rubin. M 2015, Personal reputation and the organization, Journal of Management Organization, vol21, no.2, pp. 217-236