How Management Accountants' Cognitive Style and Role Involvement Combine to Affect the Effort Devoted to Initiating Change

This study examines how management accountants' cognitive style combines with their role involvement to affect not only the level of effort they devote to initiating change in their management accounting practices, but also how radical those changes are. While management accountants' cognitive style is likely to be an important indicator of the level of effort devoted to initiating change, the role they occupy in the organization (described in terms of role involvement) is also likely to be important as a means through which their efforts can be facilitated. The results from a survey of management accountants indicate that cognitive style had a positive but not significant direct effect on the level of effort management accountants devote to initiating change but, as hypothesized, there was a significant indirect effect via the mediating variable of role involvement. Moreover, this indirect relationship was more significant for radical changes than non‐radical changes.     

The Influence of the Accountant on British Business Performance From the Late Nineteenth Century to the Present Day

Britain has more professionally qualified accountants per capita than any of her leading economic rivals and they play a major role as advisers to British companies and take a disproportionate share of the jobs in top management. Unfortunately for the accountants, business historians, other academics, commentators and even contemporary politicians have almost universally noted this to be a bad thing. This article discusses whether this reputation is justified by assessing the past performance of professional accountants as business advisers and managers. Stereotypical criticisms of accountants in terms of excessive caution, their support for the holding company form, or seeing problems in narrow financial terms are found to be unjustified. The promotion of accountants to the top jobs can be seen as rational profit-maximizing behaviour by British companies and a recent survey has demonstrated the performance of accountants in top management in recent years to be superior to other professions such as engineers.     

The Evaluation of Performance in Firms of Chartered Accountants

In this paper, the results are reported of a survey of the performance evaluation practices of six UK offices of four firms of chartered accountants. The objective of the study was to identify the variables which seemed likely to affect the perceived performance of chartered accountants in the UK. The study was conducted in three stages. First, a model was specified which identifies perceived performance as a function of perceived effort, perceived ability and perceived luck. Second, using a modified form of Vroom's expectancy model of motivation, the determinants of effort were identified. Finally, four work value factors were empirically derived and conceptually related to each of the variables in the model of performance and effort. The results suggest that two of the work value factors (the desire for a better quality of life and the desire to avoid uncertainty) may be particularly important.     

Management accounting information and the needs of managers: Perceptions of managers and accountants compared

The study builds on prior research on information user perceptions and the roles of management accountants. Perceptions of management accountants and managers in the same organisations regarding information supplied by the management accounting function were compared and differences highlighted. Perceptions of managers were also sought regarding desired changes in the information supplied and desired future roles of management accountants.Consistent with prior literature in MIS and accounting, the findings showed evidence of preparer–user perception gaps. Major contributors to those perception gaps were identified as an imbalance between technical and organisational validity, functional differentiation and an inherent tension between the simultaneous requirements of independence and involvement. Managers' views of desired future roles for management accountants provided consistent indicators as to how those gaps can be narrowed. The study also exposes inaccuracies in management accountants' perceptions and sets out implications for the design and reporting of future research.     

An institutional perspective on the changes in management accountants’ professional role

The paper theorises how a new actor of a firm can drive the institutionalisation of a new role for management accountants. Drawing on institutional theory and using insights from a single case study in a German manufacturing firm, the paper analyses the institutionalisation of the so-called “business partner” role for management accountants, which was promoted and driven by the case firm's newcomer CFO. The paper focuses on the micro-processes and especially the institutional work carried out by the new CFO that supported the entrenchment of the “business partner’ role within the case firm. In this light, we illustrate that especially three interrelated kinds of institutional work were carried out within the case firm to support the institutionalisation of the management accountants’ new role: (1) legitimising the new “business partner” role, (2) (re-)constructing the management accountants’ role identities and (3) linking the intra-organisational level with an institutional environment in which external actors aim to achieve changes in the management accountants’ role on a broader societal level. In this context, the paper also provides insights into the specific German management accounting context. Overall, the findings suggest that the institutionalisation of a new role for management accountants can be understood as the product of purposive actions carried out by actors to support a specific institutional arrangement within the firm.     

Accountants’ Whistle‐Blowing Intentions: The Impact of Retaliation,Age, and Gender

Accounting practices and the role of auditors have been widely implicated in many corporate scandals. Accountants are likely to witness serious wrongdoings at their workplace, presenting them with a difficult choice as to whether or not to whistle‐blow. This study reports online survey results of whistle‐blowing intentions of the members of Certified Practising Accountants of Australia. The study provides data on the effect of threat of retaliation, age and gender on accountants’ propensity to blow the whistle. The results show a complex interaction effect of retaliation, participants’ age, and gender on their propensity to blow the whistle. Among the early career accountants, male accountants are more likely than female accountants to blow the whistle. Accountants in the mid‐age group are not only likely to whistle‐blow when there is retaliation but also tend to be more willing to do so when that retaliation involves a direct personal loss rather than a loss to their associates. Accountants in the age group of 45 years or above respond to retaliation differently depending on their gender. Specifically, female accountants’ propensity to blow the whistle in this age group tends to decline as the retaliation threat increases from weak to strong, yet the change in retaliation threat has little impact on male accountants’ propensity to blow the whistle. These results and their implications are discussed.     

Quantitative skills: is there an expectation gap between the education and practice of management accountants?

The extent to which management accountants are receiving appropriate training in quantitative methods is examined. It finds a disparity between the wide range of quantitative techniques covered within the Chartered Institute of Management Accountants' syllabi and the limited use made of many of the techniques in practice. It also reports a rich picture of differing expectations of the role of quantitative skills in the work of a management accountant. The study finds that quantitative skills are seen by both employers and accounting educators as contributing to the portfolio of skills required by management accountants. Also, they give a rigour to the examination process that is seen as a challenging ‘rite of passage’ into the profession. It is concluded that knowledge and understanding of the range of quantitative techniques available to organizations is a powerful differentiator for the accounting profession, even if the occasions upon which accountants are required to draw upon much of that knowledge are few and far between.     

Occupational reality shock and organizational commitment: Evidence from the accounting profession

A longitudinal field survey was undertaken to investigate the effects of occupational reality shock on the organizational commitment attitudes, intentions, and behavior of professional accountants. Comparative data was collected over a one year period from a sample of accountants employed in the controller's division of a large (Fortune 100) industrial firm and from a sample of accountants employed by a “Big Eight” public accounting firm. The results portray reality shock as having a significant, asymmetrical impact on the work-related attitudes, intentions, and to a lesser extent behavior of accountants employed in both organizational settings.     

THE PERSONALITY,JOB SATISFACTION AND TURNOVER INTENTIONS OF AFRICAN-AMERICAN MALE AND FEMALE ACCOUNTANTS: AN EXAMINATION OF THE HUMAN CAPITAL AND STRUCTURAL/CLASS THEORIES

The American Institute of Certified Public Accountants has made minority recruitment a major goal. Minorities, and especially African-Americans, have not been entering the accounting profession in proportion to their numbers in either the general population or the population of college graduates. Two competing explanations have been advanced that attempt to explain this failure@8ihuman capital theory, and structural/class theory. This paper reports on the results of a survey of a sample of 445 African-American accountants that attempts to test the validity of these two theories by assessing the respondents' personality characteristics, job satisfaction and turnover intentions. The distribution of personality type for the sample of African-American accountants was found to be similar to the results of a previous study conducted on groups of Anglos and Hispanics. Additionally, the job satisfaction and turnover intention results for the sample were found to be similar to those reported in previous studies. As a result, the findings fail to support the human capital theory, and implicitly lend support to the structural/class theory. Finally, anecdotal evidence from the respondents in two open-ended questions was examined. It indicated that African-American accountants' failure to advance in the profession was perceived to be attributed to a less than total commitment to diversity and the existence of glass ceilings in many organizations.     

Ethical evaluations and behavioural intentions of early career accountants: the impact of mentors,peers and individual attributes

This study examined how mentoring support, peer influence and individual attributes of early career accountants (ECA) influence their ethical evaluations and behavioural intentions. Respondents indicate that their evaluation of the seriousness of the ethical conflict is affected by the perceived standard of ethical conduct of their peers, their personal ethical orientation, the extent of ethics education at university, and gender. ECAs’ evaluation of a senior colleague's unethical behaviour is affected by mentoring support and the perceived standard of ethical conduct of peers. In terms of ECAs’ willingness to contact accounting professional bodies for ethical advice, the size of the accounting firm and the extent of their ethics education at university are significant factors. Furthermore, the likelihood of respondents choosing a more ethical decision is correlated with his or her individual ethical orientation and the extent of ethics education at university.     

Who Influences the Design of Management Accounting Systems? An Exploratory Study

This paper outlines the results of an exploratory, survey‐based study of the relative influence of managers and management accountants on management accounting system (MAS) design. The findings reveal that, on average, corporate management have the stronger influence on MAS design. However, the strength of their influence does vary both across firms and the sub‐areas of management accounting and, in a significant number of cases, the management accountants’ influence is the greater. The results, therefore, suggest that the processes by which MASs evolve differ across firms due to the variation that exists in the influence exerted by these two parties in MAS design. This finding is significant for researchers studying change and difference in management accounting practice.     

Strategy,accountants’ activities and new product development performance

Prior literature indicates that activities carried out by accountants in new product development (NPD) are important. We explore the relationship between accountants’ activities and NPD performance. We extend prior studies to identify the possible activities carried out by accountants within the NPD process to include five types of activities: basic, cost planning, cost control, profit management, and risk management. We argue that the relationship between accountants’ activities and NPD performance is contingent on firm strategy. We mainly use sales from new products over total sales to measure NPD performance. Based on a large-scale survey, the findings confirm our conjecture that the effects of the five types of activities on NPD performance generally vary as a function of the strategy adopted by the firm. The implication of these findings is that in combination with the chosen strategy, firms should concentrate on the specific activities of accountants that can improve NPD performance.     

The case for strategic management accounting: The role of accounting information for strategy in competitive markets

A review of two economic theories is utilized to provide theoretical support for the greater possible involvement by accountants in what has been called strategic management accounting. One of these theories is concerned with the underlying characteristics of enterprise products. It suggests that there is a need for accountants to consider the cost structure of not only their own firm but of all enterprises in the relevant market and of potential entrants. It also suggests that costs can not be considered in isolation from demand factors. The second theory to be reviewed is concerned with whether a firm's cost structure permits its market strategy to be sustainable in the face of potential entry. This theory again emphasizes the intertwining of demand and cost factors and the need to consider these factors simultaneously. The use of this theory allows a new perspective to be taken to cost behaviour which is especially suited to high technology manufacturing.     

Rejoinder: Some thoughts on social and environmental accounting education

Abstract

Continuing professional development (CPD) is the educational and developmental work and learning that professionals undertake after they have qualified as members of their professional body. International Education Standard (IES 7), issued by the International Federation of Accountants (IFAC) in May 2004, called on all professional accountants to develop and maintain competence that is relevant and appropriate for their work and their professional responsibilities. In order to comply with IES 7, ACCA and ICAEW implemented new policies for CPD effective from 1 January 2005, and CIMA and ICAS from 1 January 2006. Prior to these changes, CPD, which had originally been regarded purely as implicit within a professional accountant's ethical responsibilities, had come to be more regulated following legislative changes in the late 1980s. This is the first academic study to investigate the actual CPD activities of accountants in public practice in the UK. The questionnaire survey revealed that approximately 80% of members in public practice of ACCA, CIMA, ICAEW and ICAS engaged in levels of CPD that complied with the guidance in place before the new rules were introduced in 2005/06. The most frequently reported CPD activities were technical reading and course attendance. ACCA members have a broadly similar requirement under the new ACCA CPD policy. Most ACCA members in practice would continue to comply with the new policy requirements if their level of participation in CPD activities remains unchanged. However, up to 20% of such accountants are likely not to be compliant unless their participation increases. CIMA, ICAEW and ICAS have adopted a new approach to CPD based on outputs rather than inputs. These new requirements are also discussed.     

Accountants' Attitudes and Environmentally-sensitive Accounting

Accounting for the environment (ICAEW, 1992) is receiving increasing attention. A series of initial interviews, visits and other contacts with a wide range of organisations and accountants on three continents left us with the impression that accountants and accounting do not appear to be involved in corporate responses to the environmental agenda. This paper is an exploration and examination of that impression. A mail questionnaire survey confirmed that accountants have low levels of involvement in their company's environmental activities and, from responses to personal opinion questions, appear to experience a conflict between their awareness of environmental issues and an inability to translate this into action within their corporate life. These attitudes are explored in the paper and would be a sufficient explanation for the absence of environmental accounting in practice.     

On the emergence of strategic management accounting: An institutional perspective

Strategic management accounting (SMA) has been presented as an efficacious approach to strategy formulation and implementation. It also suggests accountants move away from purely financial concerns to give consideration to wider business issues. Management accounting change has attracted significant research attention in recent years. This case study explores the issues which surround change and which enable the adoption of SMA and the repositioning of management accountants to become more strategic. The empirical enquiry is based in one company through a prolonged series of interviews and meetings which enabled activities over a number of years to be reviewed. This revealed an increasing strategic role for management accountants in informing strategic decision‐making and how this role came into being. The research is informed by institutional theories and neoinstitutionalism in particular, to interpret the external and internal influences on the change in roles of some management accountants and the outputs of their work.     

The Rationale for Cost Allocation: a Study of UK Divisionalised Companies

This paper reports the results of an empirical study designed to examine how top management in divisionalised companies perceive central costs allocation for the purposes of performance evaluation. Data for the study were collected from senior management using a questionnaire survey. The empirical evidence shows that top management allocate costs to influence the behaviour of managers to take action in the best interests of the company as a whole. Following from this, top management perceive allocations as being likely to encourage the optimal utilisation of resources. However, top management perceive allocations as being unlikely to reduce both divisional managers' expenditure on perquisites and budgetary slack.     

An international comparison of strategic management accounting practices

Following a consideration of what accounting practices may comprise strategic management accounting (SMA), the results of a questionnaire survey investigating the incidence and perceived merit of 12 SMA practices are reported. The survey sample comprises large companies in New Zealand, the United Kingdom and the United States. There is a wide range of application rates for the 12 practices appraised; competitor accounting and strategic pricing are the most widely-used. Most of the SMA practices appraised are not widely used. However, based on the perceptions of the benefits from adopting such practices, the potential for greater use exists in all countries examined. Cross-country comparisons highlight fairly similar levels of SMA usage. However, when controlling for company size, there is a suggestion that some practices are used relatively more in N.Z. and relatively less in the U.K. and U.S. There appears to be negligible use of the term `strategic management accounting' in organizations and practising accountants have a limited appreciation of what the term means.     

An empirical study of research and development top managers' perceptions of short-term pressures from capital markets in the United Kingdom

It is often argued that capital market pressures are increasingly directed towards short-term performance evaluation of managers and their operations. Whether these external capital market pressures actually exist or not, short-term pressures on firms are influenced by managers' own perceptions of these external pressures. If managers perceive the existence of these external pressures it is likely that this will lead to short-term behaviour on their part. The purpose of this paper is therefore to examine (a) research and development (R&D) managers' perceptions of short-term behaviour in capital markets in the UK, and (b) patterns of behaviour relating to R&D which may be influenced by these perceptions. The findings of this study indicate that approximately half of the UK research and development managers perceive capital markets as responsible for putting inappropriate short-term pressures on their companies' management. However, an even larger proportion report short-termist behaviour relating to R&D and its evaluation, suggesting that some at least of the problem of ‘short-termism’ is internally generated.     

The Tax Knowledge of South African Trainee Accountants: A Survey of the Perceptions of Training Officers in Public Practice

This empirically-based, exploratory study outlines the framework of chartered accountants' tax education and training in South Africa and focuses on training officers' perceptions of the existing tax knowledge of trainee accountants when entering into a training contract after completing their university qualification. The study identified the respondents' satisfaction with the performance by ‘entry-level’ trainee accountants of their duties. The results indicated that, although the educational background of trainee accountants was for the most part adequate, these trainee accountants were not sufficiently able to perform their duties when entering into training. The implication of this study is that the syllabus setters and educators should review the practicality of the current tax syllabi's content for the education and training of aspirant chartered accountants in South Africa.