Date of Award

Spring 1997

Document Type


Degree Name

Doctor of Business Administration (DBA)


School of Accountancy

First Advisor

Thomas Phillips


This research primarily has attempted to determine if user-decision perspective (banker) and preparer perspective (CPA) differed in their materiality decisions and materiality cognitive processes. As its second objective the research has sought to determine the factors used in materiality judgments.

The researcher collected the data for the study while attending graduate and undergraduate classes of the American Banking Association's National Commercial Lending School and a training session of a Big Six accounting firm. Factor analysis of the data determined the underlying dimensions of materiality decisions. The accountants identified three relevant sets of factors: ratios, sensitive areas, and unrecorded items; the bankers identified absolute dollar amounts, ratios, and characteristics of the event. The results of factor analyses agreed with prior observations by the FASB and others that materiality has both qualitative and quantitative dimensions.

MANOVA compared the materiality decisions of CPAs with those of bankers. Profession had a very significant effect on materiality decisions, while experience proved only marginally significant. With only one exception, bankers assigned more materiality to each decision than did accountants, and those with more experience considered every case more material than did those with lower experience levels.

This study included an exploratory research effort to explain how the materiality cognitive processes of users differed from those of preparers. The participants provided conceptual maps (spatial representations of the organization of central ideas) of their materiality cognitive process.

MANOVA compared the materiality cognitive process of CPAs with that of bankers. Profession had a significant effect on the materiality cognitive process, while experience did not have a significant effect.

In general, accountants had larger, more developed, and more categorized cognitive maps for materiality decisions than did the bankers. Accountants emphasized those items relating to the business environment and the event or judgment, while bankers emphasized those items concerned with the firm, accounting system, and source of information.

Included in

Accounting Commons