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Noise in accounting information: the signal detection theory perspective


Lau, Yeng Wai (2008) Noise in accounting information: the signal detection theory perspective. International Journal of Economics and Management, 2 (1). pp. 179-193. ISSN 1823-836X


Accounting information constitutes a “noisy” representation of economic reality due to the spectrum of accounting alternatives available to meet a diversity of information needs. In the presence of noise, decision-makers can either overlook signals that truly require attention or mistake noise for signals. This paper seeks to (1) discuss how decision-makers fare in discriminating accounting signals from noise based on extant empirical findings, (2) highlight the adverse effects of noise in accounting information from the signal detection theory perspective, and (3) offer recommendations on how best to fend of the adverse influence of noise.

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Official URL or Download Paper: http://econ.upm.edu.my/ijem/vol2_no1.htm

Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Faculty of Economics and Management, Universiti Putra Malaysia
Keywords: Accounting signals; Noise; Accounting representation; Signal detection theory
Depositing User: Yusfauhannum Mohd Yunus
Date Deposited: 24 Nov 2008 14:58
Last Modified: 06 Jul 2015 01:50
URI: http://psasir.upm.edu.my/id/eprint/687
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