Internet financial reporting: The effects of hyperlinks and irrelevant information on investor judgments.

摘要

The flexibility provided by hyperlinks may have detrimental cognitive effects on investors, including cognitive overload. Users must perform multiple tasks simultaneously when browsing with hyperlinks, including navigating through the system, reading, understanding, and analyzing the information, and recalling information previously viewed. Simultaneous performance of these tasks places a high cognitive load on the information system user. This study investigates the effects of presentation format and the type of information on nonprofessional investors' judgments. Specifically, I examine whether viewing a company's web-based financial disclosures with hyperlinks (as compared to paper-based disclosures) causes an increase in cognitive load, resulting in nonprofessional investors' acquiring less information, making less accurate decisions, and taking more time making decisions. Additionally, I examine whether investors viewing relevant and irrelevant information cues with hyperlinks are more likely to exhibit a dilution effect, such that the irrelevant information dilutes the impact of the relevant information. Results of this study have implications for financial disclosure regulation and information system design. There are currently limited regulations as to the content of corporate websites and as to auditors' responsibilities to review web disclosures. Evidence from this study indicates that presentation format and type of Internet disclosures affect investor judgments and suggests that regulations may be needed for the Internet reporting environment.