Error Propensities Amongst Finance and Accounting Professionals: Can We Quantitatively Measure Illusion of Control or Chaos?

Most financial and accounting tasks and analytics, whether associated with the past or future, assume knowledge of process, variation, and statistics. Yet, finance and accounting personnel averaging 13 years of experience could not distinguish non-random from random time-series strings in an assessment using statistical process control charts. Respondents scored no better than guessing compared to a series of true-false questions. Latent class analysis methods within partial least square structural equation modeling successfully uncovered segments of respondents with large explained variance and significant paths to explicate tendencies toward type I or type II error rates, i.e., an illusion of control or illusion of chaos. Relationships between the desirability of control, personal fear of invalidity, and error rates were more varied than expected.