Cartoon Graphics in the Communication of Accounting Information

Abstract

The relative merits of schematic faces for the communication of multivariate information have been explored in a number of disciplines. Existing studies in the financial environment suggest that they may be superior to conventional methods in both their communications and decision-making qualities. This paper employs an innovative research design to demonstrate the relative usefulness of schematic faces in the failed/non-failed decision-making context compared to accounting statements and financial ratios. An optimum assignment of financial variables to facial characteristics is suggested, one which demonstrates the usefulness of schematic faces as a decision tool in the financial environment. Schematic faces are shown to be processed more quickly and with no loss of accuracy, compared to more traditional means of presenting financial information. Existing applications of schematic faces have been deficient in a number of areas. This study employs a complex research design involving multiple treatments to overcome the confounding problems of subject variability while also addressing the impact of differential priors and differential misclassification costs.