Managerial attitudes to risk: a comparison of Scottish chartered accountants and U.K. managers

This paper examines attitudes to risk by Scottish chartered accountants and considers whether their risk-taking attitudes are similar to or different from those of other business managers in the U.K. The papers also investigates whether the respondents focus on simple heuristics rather than on statistical outcomes in their decision-making process. The findings reported here are based on a large survey of accountants and managers in different functional areas. The results suggest that accountants and managers exhibit many of the biases that have been documented for executives in other countries. A focus on the framing of a decision, an emphasis on the magnitude of negative outcomes and an insensitivity to probability estimates are all characteristics of the responses to the scenario cases provided. In addition respondents display clear views about the factors that influence the riskiness of a decision. A number of strategies are likely to be adopted by the respondents to control risk, including the gathering of information and consultation with colleagues. Finally, the respondents suggest that several groups, such as customers, competitors and large shareholders, influence risk decisions taken.