ICAEW SE · Chapter 7 · Question 9 of 18
An accountant reviewing a provision estimate starts from last year's figure and makes only small adjustments, even though circumstances have changed significantly. Which type of bias is this most likely to be?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Anchoring bias
Explanation
Anchoring bias is the tendency to rely too heavily on an initial piece of information, such as last year's figure, when evaluating subsequent information. The accountant should reassess the estimate based on current evidence. Automation bias relates to over-reliance on systems, and groupthink to group decision-making.
More Ethics and public trust MCQs
- Q11An assistant accepts the output of a spreadsheet-based forecasting tool without question, even though some results look unusual, because…
- Q12A board consistently reaches quick unanimous decisions and members are reluctant to challenge the chief executive. Which of the following…
- Q13Which of the following is a likely consequence for the accountancy profession as a whole when a professional accountant is found to have…
- Q14Which of the following is part of ICAEW's regulatory role in maintaining public trust?
- Q15A student member of ICAEW is unsure how to respond to an ethical dilemma at work and wants confidential advice. Which ICAEW resource would…