'Findings Reveal That Auditors and Others Use the Same Rules

question 15

Essay

'Findings reveal that auditors and others use the same rules of thumb as have been prevalent in research in psychology,although often to a lesser extent.The rules of thumb of representativeness,availability,and anchoring and adjustment seem to be adopted in auditing and other business contexts in order to simplify complex judgement tasks and alleviate limitations in the cognitive processes of humans.' J.Godfrey,et el,'Accounting Theory',7^th Ed.p.476.
Explain the meaning of each of the three rules of thumb referred to in the quotation and describe and summarise the findings of one accounting or auditing research study that has been carried out in relation to one of the rules of thumb referred to above.

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Definitions:

Securities Exchange Act

A U.S. federal law enacted in 1934 that governs the trading of securities, such as stocks and bonds, to protect investors and maintain fair and orderly markets.

Smart Drone

An Unmanned Aerial Vehicle (UAV) equipped with advanced technology for autonomous operations and data collection.

Nonpublic Information

Information that is not openly disclosed or available to the general public, often carrying confidentiality.

Securities Exchange Act

A federal law governing the trading of securities, such as stocks and bonds, in the United States, primarily through regulation of the exchanges.