The role of accounting in evaluating the behavioural attitudes of investors

Abstract

The issue of behavioural finance is one of the new topics that has been raised by some financial thinkers in the last three decades and has quickly attracted the attention of researchers and experts around the world, in such a way that today the topics led to the formation of an independent subject of study and financial knowledge. This article addresses the issue of understanding behavioural finance as a great opportunity to study human aspects of finance. This is important because research that focuses on users of financial information and their characteristics often assumes that financial information by itself is neutral, unbiased, and worthless. However, the information that investors and capital market participants use to make economic decisions is provided by accountants who use their professional judgments to interpret and apply accounting standards. This article aims to explain the place and role of accounting in behavioural finance. This article addresses behavioural finance, such as the need for behavioural finance in the role of standardizers, the role of financial report preparers, the role of financial auditors and executive boards in behavioural finance, and the effect of accounting standards on financial reporting.

Keywords

• behavioural finance
• behavioural accounting
• behavioural economics
• human economics
• international financial reporting standards