Prior studies show that accounting choices for external reporting purposes can bias managers’ economic judgments when managers rely on accounting information for their judgments. We use an experiment to investigate whether increasing accountability (i.e., requiring decision makers to justify their judgments) mitigates the effect of depreciation method choices on an asset’s selling price. Contrary to common intuition and arguments voiced in the literature, we find that increasing accountability exacerbates the judgment bias. Justification pressures for managers reduce their confidence when making judgments. In consequence, they increase their use of all the available information, including irrelevant accounting information, to support their selling price judgments. Our findings inform firms, investors, and regulators that calls for increased managerial accountability pressures may backfire when decision makers attend to accounting information that is normatively irrelevant for their economic decisions.

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