Investors' attitudes toward source credibility

David L. Schwarzkopf (Bentley College, Adamian Academic Center, Waltham, Massachusetts, USA)

Managerial Auditing Journal

ISSN: 0268-6902

Publication date: 1 January 2007



To inform research on source credibility by providing insight into investors' perception and use of common information sources.


In total, 235 individuals with investing experience or intent ranked the perceived credibility of nine common sources that report unaudited corporate earnings estimates and nine sources of non‐financial performance measures. Respondents also assessed the relative value of source credibility to their investment decisions and indicated which common sources of information they use when investing.


Results indicate no significant differences in the rankings between more and less experienced investors. Respondents seemed to impute accountability or independence to certain sources without warrant. Source credibility was less valued in the non‐financial performance measurement context than in the earnings estimate setting. A surprisingly low proportion of investors reported using the auditor's report and financial statement notes in combination with financial statement data.

Research implications/limitations

Theory can usefully be expanded to address investors' assumptions about source accountability or independence and the data context's effect on the relative value of source credibility. Using US‐based participants potentially limits the ability to generalise results. More extensive lists of sources may refine the observed differences.

Practical implications

Results suggest that investors should question their assumptions about a source's typical behaviour. Similarly, financial reporting professionals may need to promote more heavily the value of credible sources of non‐financial performance measures while reminding investors of the importance of common financial reporting vehicles.


In addition to providing investor feedback on source credibility, this paper reveals areas for theory to address and raises questions for further performance measurement research.



Schwarzkopf, D. (2007), "Investors' attitudes toward source credibility", Managerial Auditing Journal, Vol. 22 No. 1, pp. 18-33.

Download as .RIS



Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.