Foreign language effect in accounting uncertainty expressions: Interpretation and probabilistic estimation

Yuqian Zhang, Anura De Zoysa and Corinne Cortese

Journal of International Accounting, Auditing and Taxation, 2023, vol. 50, issue C

Abstract: The foreign language effect, or thinking in a foreign language, reduces judgment bias under uncertainty. This study investigates how language use (native versus foreign) affects accounting judgment on uncertainty expressions. We conducted two separate experiments: between-subjects and within-subjects, both of which included tasks requiring interpretations and probability estimations based on accounting standard uncertainty expressions. The results demonstrated that foreign language use affected the interpretation of uncertainty expressions and reduced judgment bias in probability estimation, particularly in the context of asset recognition. These findings have important implications for accounting research and reporting.

Keywords: Foreign language effect; Uncertainty expressions; Probability estimation; Accounting judgement; Interpretation (search for similar items in EconPapers)
JEL-codes: D81 D91 I23 M41 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:50:y:2023:i:c:s1061951823000071

DOI: 10.1016/j.intaccaudtax.2023.100528

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