The Effect of Moods on Accounting Judgment
Thomas G. Noland, J. Russell Hardin, Gregory L. Prescott

Abstract
This paper investigates the impact of mood on decision making by accounting professionals. Prior research suggests that different moods can impact professional judgment. Prior research has also found that mood affects auditor conservatism and dispersion on inventory valuation decisions. Our experiment with 117 accounting professionals suggests that mood impacts professional judgment but contradicts the results of prior research. Prior research has found that positive mood subjects had lower consensus and less conservative estimates of inventory valuation than neutral or negative mood subjects. We find that negative mood participants had the lowest consensus and least conservative estimates of inventory valuation.

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