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Variation in Accounting Information Load: The Effect on Loan Officers' Predictions of Bankruptcy.

Cornelius J. Casey

Assistant Professor of Business Administration, Harvard Business School 1

The Accounting Review 1980

ABSTRACT: One hundred and twenty-two bank loan officers participated in a questionnaire study of the effect of accounting information load on their ability to predict bankruptcy. The officers were randomly assigned to one of three experimental treatment groups, each representing a different accounting information load, and asked to predict which of ten sample firms would declare bankruptcy within a subsequent three-year period. Officers with the heaviest information load had no greater predictive accuracy than officers with a lesser information load, and used significantly more time to assimilate the data. These findings indicate the occurrence of accounting information overload.

DOI
10.2308/tar-4511338
Volume
55 (1)
Pages
36-49
Language
en
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