The Association between the Directional Accuracy of Self‐Efficacy and Accounting Course Performance

This study examines how accounting students' ability to assess their course standing mid‐way through the term is associated with their success in the course. Drawing on the paradigm of self‐efficacy, we explicitly assess mid‐way through the course how aware students are of (1) their exam performance, having taken an exam but before receiving feedback, and (2) their final course grade. Path analysis results for a sample of 214 students suggest that the more conservative a student's self‐efficacy (that is, the less optimistic or more pessimistic the self‐assessment), the higher the second exam score and final course grade. This relationship holds even after controlling for cumulative GPA in accounting courses, average exam performance during the term, trajectory of achievement, number of accounting classes already completed, and the extent of involvement in extracurricular activities. Path analysis results also support the notion that student characteristics are associated with performance, both directly and indirectly (via their association with the conservatism of self‐efficacy). We find that the direction of inaccuracy matters. When students' predictions are below outcomes, reflecting pessimism, subsequent performance improves. When predictions are above outcomes, reflecting optimism, subsequent performance deteriorates. These results suggest that the direction of inaccuracy in understanding current course standing is an essential element of students' success in the classroom, apparently due to the self‐regulatory behavior prompted by such misalignment.