Management accounting systems, task uncertainty and managerial performance: A research note

This study examines the interactive effects of management accounting systems (MAS) design and task uncertainty on managerial performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information. The responses of 42 managers, drawn from a cross-section of Australian manufacturing companies, to a questionnaire survey were analysed by using a multiple regression technique. The results showed that under a high task uncertainty situation, the extent of use of broad scope MAS information led to effective managerial decisions and hence to improved managerial performance. On the other hand, under low task uncertainty situations, the extent of use of broad scope MAS information led to information overload which was dysfunctional to managerial performance.     

Strategic Choices,Environmental Uncertainty and SBU Performance: A Note on the Intervening Role of Management Accounting Systems

This paper examines the role of management accounting systems (MAS) design on the relationship between: (1) strategic business unit (SBU) strategy and SBU performance and (2) perceived environmental uncertainty (PEU) on SBU performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information for managerial decision making. The responses of 62 SBU managers, drawn from a cross-section of manufacturing companies in Western Australia, to a questionnaire survey were analysed by using a path analysis. The results suggest that SBU strategy and PEU are important antecedents of MAS design, and that broad scope MAS information is an important antecedent of SBU performance.     

The effects of tolerance for ambiguity and uncertainty on the appropriateness of accounting performance measures

This article examines how task uncertainty, environmental uncertainty and tolerance for ambiguity (TFA) affect managerial opinions about the appropriateness of accounting performance measures (APM). Based on accounting and psychology literature, this study argues that task uncertainty and environmental uncertainty differ in their direct effects on the appropriateness of APM, and furthermore that the relationship between uncertainty and the appropriateness of APM is moderated by managers' TFA. Hypotheses are developed, and tested with data from a survey study among 250 managers in eleven organizations, using partial least squares (PLS). Overall, the results show that the two types of uncertainty have opposite effects on managers' opinions about the appropriateness of APM, and that these effects are moderated by TFA, which confirms expectations. No direct effect of TFA on the appropriateness of APM was found. Overall, these findings provide an explanation of the inconsistencies in the extant behavioural management accounting literature that has addressed the appropriateness of APM under uncertainty.     

The effects of financial controls on data manipulation and management Myopia

This paper reports the findings of a field and survey study aimed at discovering the incidence and causes of two potentially important, often dysfunctional, control system side effects: manipulation of short-term performance measures and encouragement of a myopic, short-term orientation. Data collected from interviews and questionnaires show that these side effects were evident and that their incidence was positively related to the felt pressure to meet financial targets. Tests of possible moderating effects of environmental uncertainty, supervisor consideration, and profit center strategy were consistent with expectations only for the environmental uncertainty variable, however; managers operating in relatively uncertain environments were significantly more likely to react to budget pressure by pulling profits from the subsequent year into the current year than were those operating in relatively certain environments.     

Linking environmental uncertainty to non-financial performance measures and performance: a research note

Several previous research studies have reported mixed results concerning the direct association between non-financial performance measures and performance. The presence of environmental uncertainty on this relationship has not been established. This paper makes a contribution to this area by proposing that it is in conditions of environmental uncertainty that non-financial measures are most useful in improving organizational performance. It analyses empirical data from a sample of New Zealand manufacturing organizations to test the hypothesis that non-financial measures of performance would lead to improved organizational performance under conditions of increased environmental uncertainty. Multiple regression analysis of the data suggests that performance should be a declining function of the size of the ‘mismatch’ between an organization's environment and use of the different combinations of non-financial performance measures. Further, the paper concludes that prior mixed results may be attributed to the omission of environmental uncertainty.     

TESTING THE CONTINGENCY «FIT» BETWEEN MANAGEMENT ACCOUNTING SYSTEMS AND MANAGERIAL PERFORMANCE: A RESEARCH NOTE ON THE MODERATING ROLE OF TOLERANCE FOR AMBIGUITY

This study examines the moderating effect of tolerance for ambiguity, a personality variable, on the relation between management accounting systems (MAS) design and managerial performance. MAS design was defined in terms of the extent to which managers» use of broad scope MAS information for managerial decision making. The responses of 63 managers, drawn from a cross-section of Australian manufacturing companies, to a questionnaire survey were analysed by using a multiple regression technique. The results indicate that the use of broad scope MAS information interact with tolerance for ambiguity to affect managerial performance. The results indicate that an appropriate «fit» between manager's personality variable of tolerance for ambiguity and the extent of use of broad scope MAS information for managerial decisions will lead to improved managerial performance.     

Appropriateness of accounting data in performance evaluation: An empirical examination of environmental uncertainty as an intervening variable

Rooted in contingency theory, this study puts forth propositions stating (1) that superiors of business units which face higher environmental uncertainty will use a more subjective performance appraisal approach whereas superiors of business units which face lower environmental uncertainty will use a more formula-based performance evaluation approach, and (2) that a stronger fit between environmental uncertainty and performance evaluation style would be associated with higher business unit performance. Findings from 58 business units in eight Fortune 500 firms provide strong support to both sets of these propositions.     

Contabilidad de gestión para controlar o coordinar en entornos turbulentos: su impacto en el desempeño organizacional

This study explores management accounting systems’ (MAS) effect on organizational performance in turbulent environments. The information generated by MAS has a different impact on organizational performance depending on its main purpose of use (control or coordination) according to transaction costs theory. Data from a survey with 42 complete answers from medium sized organizations operating in the province of Cordoba (Argentina) show that MAS positively impact organizational performance in turbulent environments if used to coordinate up to a certain level. Their purpose of use is better modeled as another independent variable but not as a mediator between external factors and organizational performance. Previous case studies suggested that MAS's purpose of use was mediating between external factors and organizational performance, but this study shows that in turbulent environments the idea is not valid as managers’ decisions do not affect uncontrollable external factors (market and technology). Performance in medium sized organizations operating in Latin America improves if MAS are used to coordinate, while limiting their use for control purposes to certain and definite tasks such as cost measurement, compensation and incentive mechanisms.     

Incentive Effects of Assigned Goals and Compensation Schemes on Budgetary Performance

This study examines the combined effects of two management interventions, assigned goals and monetary compensation, on performance in a routine task. It investigates the effects of assigned goals (four goal levels: low, medium, high, impossible) and three types of compensation scheme (fixed-pay, piece-rate and budget-based). A laboratory experiment involving 180 undergraduate accounting students showed that, in some circumstances, assigned goals dominated performance effects while, in other circumstances, monetary incentives played a major role. Over medium to high levels of difficulty, assigned goals had a positive and dominating effect on performance, regardless of type of compensation. When the assigned goal was low, however, performance-contingent pay schemes had an additive effect on performance, while at an impossible goal level, budget-based incentives had a negative effect on performance. Of the interventions tested, the highest performance resulted from using incentive-based compensation when the budget (assigned goal) was relatively low (80% achievable).     

The Effect of Behaviour Monitoring and Uncertainty on the Use of Performance-Contingent Compensation

The objective of this study is to examine the effects of control system characteristics and perceived environmental uncertainty on the relative use of performance-contingent compensation. The results, based on a survey of division managers, indicate that monitoring ability is negatively associated with the use of performance- contingent compensation. In addition, monitoring is found to moderate the relationship between uncertainty and compensation system design. Whereas in non-monitoring firms, higher levels of uncertainty are associated with increased use of performance-contingent compensation, in monitoring firms, higher levels of uncertainty are associated with decreased use of performance-contingent compensation. These results support agency theory arguments that compensation structure is determined at least in part by concerns for economic efficiency.     

The performance of precious-metal mutual funds: Does uncertainty matter?

We studied the relative risk-adjusted returns and downside risk performance of precious-metal mutual funds (PMFs) in different uncertainty periods (pre-crisis, crisis and post-crisis) using propensity score matching techniques and difference-in-differences matching regression. For a sample of PMFs and global corporate funds quoted in USD over the period January 2005 to June 2015, we found that the relative performance of PMFs differed across uncertainty periods. Thus, they performed similarly to corporate funds in the pre-crisis period, they outperformed corporate funds regarding risk-adjusted returns but underperformed in terms of downside risk in the crisis period and they displayed a similar risk-return performance to corporate funds in the post-crisis period. Difference-in-difference estimates indicate that a shift from low to high uncertainty had a positive impact on risk-adjusted returns for PMFs, whereas this advantage dissipated when uncertainty was reduced. However, fluctuations in uncertainty had mixed effects on the relative downside risk associated with PMFs. This evidence has implications for investors who seek to gain exposure to precious metals using PMFs.     

Budget Type and Performance — The Moderating Effect of Uncertainty

Calls for improvements to traditional yearly corporate budgeting practices have a common thread, the failure of these practices to provide adequate plans in uncertain environments. Rolling budgets that require continuously updated forecasts have been suggested as a means to improve the traditional budget process. We hypothesise that when the environment is highly uncertain, learning effects from rolling forecasting result in superior performance. In the same environment, traditional budgeting results in poorer performance because there is no systematic method for exploring and understanding environmental uncertainty. Alternatively, rolling forecasting causes inferior performance in low uncertainty conditions because commitment to the budget goal is more important than the benefits of learning from forecasting.     

Modeling board governance,environmental expertise,and social engagement effects on firm environmental performance: Panel data evidence

Prior research establishes that board governance quality measures positively impact firm environmental performance. In this study, we propose an empirical model using structural equation modeling (SEM) to explore additional enhancements to board governance, namely board environmental expertise (BEE) and board social engagement (BSE) and show that they incrementally improve firm environmental performance (EN). Our proposed latent construct measure, BEE, goes beyond traditionally dichotomous measures used in the literature. BEE has a total effect on firm environmental performance that is over two thirds the size of effects arising from traditional governance quality measures (GOV). The second enhancement of our model is the focus on BSE, a novel construct to the CSR literature. In addition to possessing environmental knowledge enabling expertise, we demonstrate that a board with a deeper commitment to society will further improve firm environmental performance. Using SEM, we find that the indirect effects of GOV, BEE, and BSE on EN represent a substantial portion of the total effects on EN. Hence, ignoring these indirect effects would result in substantial understatement of the effects of improvements to governance on environmental performance.     

Economic policy uncertainty and cross-border lending

Banks increase cross-border syndicated lending when domestic economic policy uncertainty is high, after controlling for credit demand at the borrower country or country-industry levels. The credit migration effects are strongest for banks with diverse income and when banks face fiercer competition. Using elections as a source of plausibly exogenous variation which positively affects political uncertainty, we provide causal evidence on the effects of political uncertainty on cross-border lending. In countries with exogenous election timings, banks increase cross-border lending during the election period, especially when elections are closely fought. Compared to the extant literature, which extensively documents the negative effect of uncertainty on real investment, our findings show that uncertainty affects investments in financial assets differently.     

环境不确定性对盈余管理的影响

环境不确定性会导致公司报告盈余的波动性很大,管理层试图通过盈余管理降低环境不确定性对公司盈余波动性的影响,公司的成长趋势会影响人们对公司环境不确定影响的评估。本文探讨公司环境不确定性和成长趋势以及它们的交互效应对公司盈余管理行为的影响。研究结果表明,环境不确定性越大,公司的盈余管理程度越高;相对于衰退型的公司,增长型公司的环境不确定性与公司正向盈余管理程度正相关程度较低;衰退型公司与增长型公司的环境不确定性对公司负向盈余管理的影响无显著差异。基于不确定性来源的不同,进一步研究发现,衰退型公司更关注公司的可预测变动,而增长型公司更关注随机因素。     

Influence of cost accounting change on performance of manufacturing firms

The purpose is to analyze the influence of cost accounting change (CAC) on the financial performance of Finnish firms. Empirical data are based on a survey responded by 121 manufacturing firms. PLS is used to extract the influence of CAC on performance. The general expectation is that CAC should have a positive lagged effect of performance. However, prior empirical evidence is mixed and usually only a weak influence is found, if any. This study shows that CAC is closely associated with a simultaneous pricing system change (PSC). CAC and PSC are interrelated because product cost usually plays an important role in pricing. PLS shows that CAC has a weak positive lagged main effect on performance whereas PSC has a strong negative effect. The total effect of CAC is insignificant because the positive direct effect is offset by the negative mediation indirect effect through PSC. The result indicates that when assessing the influence of CAC on performance it is important also to take account of the corresponding indirect influence through PSC. The study also shows that perceived environmental uncertainty (PEU) has a strong negative moderating effect on the influence of PSC on performance. Thus, the influence of PSC on performance is more negative when PEU is high.     

投资者调研影响上市公司商业信用融资研究——基于深市A股上市公司的实证

以2013-2016年我国深市A股上市公司为研究样本,实证检验投资者调研对商业信用融资的影响,以及环境不确定性对二者关系的调节作用。研究结果表明：投资者调研与商业信用融资显著正相关,在非国有企业中,环境不确定性负向调节了投资者调研与商业信用融资之间的关系;在国有企业中,环境不确定性的调节作用不显著。进一步研究显示：投资者调研会促进企业获得较低成本的商业信用融资。     

The perceived fairness of performance evaluation: The role of uncertainty

This paper investigates the relationship between performance evaluation procedures and managerial perceptions of procedural justice. We examine two metric and two process characteristics. Metric characteristics are the diversity of metrics used by superiors and their reliance on outcome vs. effort metrics. Regarding process characteristics, we analyse the amount of subordinate's voice in the performance evaluation process, and the extent of formalization of the process. Using uncertainty management theory, we argue that justice effects of performance evaluation procedures may not be direct but are instead conditional on the amount of task uncertainty managers face in the their job context as well as on managers’ tolerance for ambiguity. Using a sample of 178 managers from the banking industry, we find that all four performance evaluation characteristics are related to justice perceptions, yet their effect depends on the level of task uncertainty and tolerance for ambiguity. These findings explain some inconsistencies in extant studies on fairness of performance evaluation procedures.     

Uncertainty Associated with Future Environmental Costs and the Market's Differential Response to Earnings Information

This study examines whether the uncertainty arising from a firm's exposure to future environmental costs (environmental uncertainty) affects the market's price sensitivity to reported earnings. Specifically, when environmental uncertainty is significantly high, are investors more responsive to reported earnings released by 'high-polluting' firms than reported earnings announced by 'low-polluting' firms within the same industry? The initial impact of Title IV (the acid rain provisions) of the 1990 Clean Air Act Amendments (1990 CAAA) on the US electric utility industry provides the research setting required to isolate the effects of environmental uncertainty while addressing this question. Consistent with theoretical predictions, we find that the earnings response coefficients (ERCs) of high-polluting electric utilities are significantly greater than those of their low-polluting counterparts during a predicted period of elevated environmental uncertainty. In adjoining sample years associated with lower environmental uncertainty, we observe no statistical difference in the magnitude of the ERCs between these two groups. In addition, the study's findings suggest that the magnitude of the ERC is increasing in the firm's exposure to future environmental costs, after controlling for other factors that potentially affect ERCs.     

The economic evaluation of long-run uncertainties

This article looks at the question of uncertainty, as a factor in assessing future costs or benefits, and reviews its treatment in the economics literature. The importance of making an adjustment for uncertainty in the anticipation of the results of an action having long-term effects—in this case environmental damages—is emphasised. Particular attention is focused upon the attitudes toward risk displayed by individuals, and upon the social evaluation of long-term, uncertain, and irreversible actions, particularly where the effect to be evaluated is a stream of adverse consequences. Despite some disagreement in the literature, the author argues that the questions of uncertainty and risk aversion are not relevant solely at the microlevel: the expected social value of proposed activities must also reflect the uncertainty of future effects—and future tastes.