An empirical test of Birkett’s competency model for management accountants: Survey evidence from Dutch practitioners

In 2002, the Accountants-in-Business section of the International Federation of Accountants (IFAC) issued the Competency Profiles for Management Accounting Practice and Practitioners report. This “Birkett Report” presents a framework for competency development during the careers of management accountants (MAs). On the basis of this theoretical report, a hypothesis has been formulated about the sequence in which each of 38 competencies is expected to become important to the MA during his/her career. Results presented here show that practicing MAs see the same sequence of competencies during their careers as is presented in the theoretical framework, supporting Birkett’s competency model. The results indicate that there may be three groups of competencies: basic, advanced, and highly advanced. It may be said that the basic competencies need to be present at graduation. The advanced competencies may need to be present some years after the start of the MAs career. The highly advanced skills may be needed for Chief Financial Officer (CFO) candidates. These results suggest that advanced and highly advanced competencies are those that could be taught in continuing professional education (CPE) programs, while university education programs should focus on developing basic competencies.     

An assessment of patterns of co-authorship for academic accountants within premier journals: Evidence from 1979-2004

This study examines several important aspects of co-authorship by accounting researchers in premier journals for the years 1979-2004. Logistic regression analysis reveals that collaboration is growing significantly. This increasing trend of co-authorship is substantially greater in premier non-accounting journals than premier accounting journals. The extent of co-authorship within taxation research is notably less than financial, managerial, or auditing research. On the other hand, non-specialized articles have significantly higher co-authorship ratios. Meanwhile, trends of co-authorship are not statistically different between U.S. academic researchers and their international academic cohorts. However, co-authorship rates for non-academic researchers are significantly less than academic researchers which may indicate that the ‘publish or perish’ phenomena for academic researchers is a more significant factor of increased co-authorship rates than other universal factors, e.g., decreased cost of sophisticated communication technology. Also, we find no evidence of university tier level or doctoral granting status effects on the co-authorship ratios of researchers.     

Enterprise Resource Planning and a contest to limit the role of management accountants: A strong structuration perspective

The implementation and use of Enterprise Resource Planning (ERP) systems raise fundamental questions about the role of management accountants in an organisation. The case studied here, involving an attempt to establish an ERP system in an organisation funded by both the European Union (EU) and the Egyptian government, is an exploration of conflicting beliefs about the role of management accountants. Elements of strong structuration theory (a reinforced version of Giddens’ structuration theory) are used to analyse how the contest over the role of the management accountant in a new organisation was played out during the partially successful attempt to establish ERP in conjunction with a system that was felt to better support the requirements of the EU for performance-based budgeting. Despite the forward-looking dispositions of key actors within the organisation and from the EU, the role of the management accountant here became compressed to the traditional one of cost information collector and provider.     

Non‐profit vulnerability: An exploratory study

This mixed‐method study explores the symptoms and potential causes of non‐profit vulnerability within the Australian context. Following two focus groups with CEOs and Chairs of non‐profit organizations, an online survey was developed, pilot tested and distributed to non‐profit CEOs. Our findings suggest three symptoms that might be particularly useful in identifying non‐profit vulnerability: a substantial increase in unit costs/delivery hours; a substantial increase in the proportion of administration to program expenses; and a reduced ability to pursue the organization's mission. The results also suggest various potential causes of non‐profit vulnerability; in particular, Board inadequacies; External environmental threats; Project management issues; and Funding constraints.     

Profitability analysis in UK organizations: An exploratory study

Recent research into management accounting practices suggests that companies are now placing considerable emphasis on profitability analysis and consider it to be one of the most important management accounting practices. There is however little recent empirical research relating to the content and role of profitability analysis in companies. This paper will address this omission and report the findings derived from a survey of UK companies relating to information that is contained in profitability reporting, generated for managing the existing mix of a firm's activities. In particular, it focuses on the nature, content and role of profitability analysis carrying out some exploratory analysis and testing various propositions to explain the divergence in observed practices.A distinctive feature of the research is that, unlike some previous research, rather than focusing on the information that is accumulated within the costing system it focuses primarily on the information that is extracted from it for different purposes. Not surprisingly we find that different information is extracted for profitability analysis than for pricing purposes. The research findings also indicate that firms use a hierarchy of profit measures within the periodic profitability analysis statements and that profitability analysis is used mainly for attention-directing purposes for signalling the need for more detailed studies. For profitability analysis, the findings suggest that, in terms of what is considered the most important attention-directing measure, the use of some form of full costs based on arbitrary allocations is not as widespread as that suggested by previous studies. Evidence is also presented to suggest that the level of cost system complexity influences the observed practices.     

An exploratory study on the emergence of management control systems: formalizing human resources in small growing firms

The adoption of management control systems (MCS) is a key element in managing the tension that growth imposes on young growing firms. Despite its importance to a large number of organizations, only recently has the empirical literature devoted attention to the evolution of these systems over the lifecycle of firms [Moores and Yuen, Account. Organizat. Soc. 26 (2001) 351]. This paper builds upon existing management control theory, mostly focused on established organizations, and existing predictions based on extended field observations to explore how these systems are adopted within growing firms. To advance theory, the paper also draws from the entrepreneurship and life cycle literatures. It identifies several variables as drivers of the emergence of management control systems including the size of the organization, its age, the replacement of the founder as CEO, and the existence of outside investors. The empirical evidence, from a database on the adoption of human resource management systems, is consistent with these variables being associated with the adoption of MCS. The paper also provides initial results on how the emergence of various types of management control systems depends on which systems the organization has already adopted.     

Machine learning-based automation of accounting services: An exploratory case study

Machine Learning (ML) applied to Robotic Process Automation (RPA) and chatbot interfaces can generate significant value for many business processes. However, these technologies generate the intended return only with a carefully planned deployment. Current literature only contains a small number of case studies about how the adoption of ML-based automation services impacts employees’ behavior. In particular, no case studies look into the automation of manual tasks related to accounting management. This article reports a study conducted to understand users’ perceptions of an ML-enabled service to automate repetitive management tasks. The service was developed in a partnership between Unisinos University and Dell Inc. The study was conducted with a group of ten highly skilled employees from Dell with expertise in accounting processes and with IT background that frequently would use the automation service. The group participated in a presentation about the service and its interface and voluntarily answered a Technology Acceptance Model (TAM) questionnaire to evaluate the usability and ease of use. Results show that 10 out of 10 users agree that the service was easy to use. Also, 8 of them agree that its output is useful to reduce the manual labor required for statutory reconciliation. Furthermore, employees with an accounting management background were given access to the service, and three voluntarily answered an open-ended survey. In summary, employees agree that an automation service can reduce the time required to conduct management tasks but questioned the long-term usefulness and the ability to incorporate the process’s particularities. These results provided insights leading to ten lessons related to user experience, training and awareness, and service development.     

Factors impacting accounting research output in developing countries: An exploratory study

The objective of this paper is to identify the factors that impact accounting research output in one of the developing regions of the world, Anglophone Sub-Sahara Africa (Anglophone SSA). Adopting an institutional theory framework, the paper uses a sequential research process comprising an original questionnaire and semi-structured interviews. Four research questions were developed to achieve the research objectives. The region's low research output is explained by a host of individual, departmental and/or university, country and international factors; of these, departmental and/or university factors appear to have the strongest impact. The study also found that factors that constitute the regulative (coercive) pillar that promote research tend to be weaker in this region's universities, while factors that constitute the normative and cultural-cognitive pillars which tend to promote teaching appear to be stronger. Thus, the institutional pressure stemming from factors that constitute normative and cultural-cognitive elements dictate the conduct of an accounting academic positioned in Anglophone SSA's universities. That is, research activities of accounting academics in the region are disempowered by the more potent, normative and cultural-cognitive pressures and are inadequately sanctioned by the regulative pressure.     

An exploratory study of earnings management detectability,analyst coverage and the impact of IFRS adoption: Evidence from China

Analysts serving as external monitors to managers is a topic of considerable interest in the analyst coverage literature. There are two outcomes of analyst coverage studies: curbing and stimulating earnings management. However, recent studies (such as Yu, 2008) only provide evidence supporting the curbing side. Given the fact that the data of these studies focus on developed markets and the finding of Rodríguez-Pérez and Hemmen (2010) that external governance mechanisms may stimulate earnings management in an opaque information environment, we conjecture whether stimulating side would be dominant in emerging markets. China offers a valuable setting for us to test the question. Using the data of China capital market from 2003 to 2009, we find that analyst coverage stimulates earnings management through above-the-line items (ALIs) where earnings management cannot be easily detected, and curbs earnings management through below-the-line items (BLIs) where earnings management can be easily detected. We also find that the adoption of International Financial Reporting Standards (IFRS) in China does create many new opportunities for managers’ earnings management but does not significantly improve the monitoring effect of analyst coverage. We only find that compared to those without analyst coverage, firms with analyst coverage have a lower level of earnings management through BLIs after IFRS adoption. These findings suggest that information opacity may weaken the monitoring effect of external corporate governance mechanisms and high quality accounting standards in the literal sense may not enhance the monitoring effect of external corporate governance mechanisms if it is not compatible with the market’s institutional environment. In addition, we find that firms with earnings meeting the benchmark have a lower level of earnings management, which indicates that bright-line accounting based rules used in emerging capital markets may constrain the managers’ behavior.     

Responses to SEC comment letters on cybersecurity disclosures: An exploratory study

Cybersecurity comment letters issued by the Securities and Exchange Commission (SEC) may ask companies to disclose additional or clarifying information about their cybersecurity incidents, risks, and corresponding controls, where appropriate. Although responding to the comment letter in the form of disclosing more information about cybersecurity can better signal a company’s security posture to investors and comply with regulations, it may also expose a company to higher levels of cybersecurity risks because of disclosing proprietary cybersecurity information. Using a sample consisting of 52 cybersecurity comment letters issued between 2011 and 2019 and their no-letter-matched companies, our findings suggest that comment letter companies change their disclosures regarding cybersecurity, as required by the SEC. However, as shown in the short-term cumulative abnormal returns around response letter days, the stock market reacts negatively to the responses. Our results provide policy implications by showing that market participants may not react positively to transparency.     

Searching most influential variables to brand loyalty measurements: An exploratory study

This research attempts to detect some brand loyalty key specific antecedent variables based on three groups of measurements: consumer involvement, perceived brand value (consumer brand equity), and customer satisfaction. Questions that drove the study were: which variables from which of the three dimensions would have the major effect on loyalty measurements? Would the explicatory variables be consistent across all product categories? 649 respondents were divided into six product categories. Regression models were obtained for each product category and for each loyalty measurement. Perceived brand value variables tended to have the higher impact on loyalty measurements. Self-identification with the brand (self-congruence) and perceived brand quality tended to be the variables with the major effect on loyalty measurements across all product categories.     

Perceived costs and benefits of IFRS adoption in Saudi Arabia: An exploratory study

In response to a current lack of research in the Middle East, this study aims to critically evaluate the perceived costs and benefits associated with the adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia, the world's leading oil and natural gas exporter. Using documentary analysis and interviews with stakeholders (account preparers from listed companies in Saudi Arabia, auditors from Big 4 and local accountancy firms, and university academics), the study contributes to the literature by concluding that the benefits of IFRS adoption in Saudi Arabia outweigh the costs. Importantly, a lack of qualified accountants, significant dependence on Big 4 accounting firms, inadequate coverage of IFRS in university education, and a lack of research are identified as major obstacles to the effective implementation of IFRS. The findings offer a possible policy agenda for local and international policy makers.     

Attribute differences between U.S. GAAP and IFRS earnings: An exploratory study

In this study we explore attribute differences between U.S. GAAP and IFRS earnings. Our study is motivated by the ongoing harmonization process in accounting standard setting as well as by recent convergence projects by the FASB and the IASB. We test two market-based earnings attributes, i.e., value relevance and timeliness, as well as two accounting-based earnings attributes, i.e., predictability and accrual quality. These attributes are tested for German New Market firms as they are allowed to choose between IFRS and U.S. GAAP for financial reporting purposes. Overall, we find that U.S. GAAP and IFRS only differ with regard to predictive ability. The fact that U.S. GAAP accounting information outperforms IFRS also holds after controlling for differences in firm characteristics, such as size, leverage and the audit firm. However, our results also seem to suggest that these differences are not fully valued by investors, as we do not observe significant and consistent differences for the value-relevance attribute.     

Structure in creativity: An exploratory study to analyse the effects of structuring tools on scenario workshop results

Scenario projects increasingly combine quantitative models with qualitative, participatory products in order to make scenarios more coherent, relevant, credible and creative. A major advantage of adding participatory, qualitative scenarios is their ability to produce creative, innovative, non-linear products. Integrating participatory results with quantitative models, however, can lower their credibility of both products when they are not consistent. The low level of structure in most participatory output limits possibilities for linking them to quantitative models. More structure could be introduced, but this might hamper the creativity of the workshop results: outcomes (process) and outputs (storylines). This paper tests a new method to analyse the creativity of scenario storylines in order to analyse the effects of structuring tools on the creativity of workshop results. Both the perceptions of participants and the resulting storylines of nine case studies across Europe are used in the analysis. Results show that the use of structuring tools can have a negative effect on the creativity of the workshop, but the influence seems to vary between the different tools. The study shows the benefit of using indicators for the scenario quality criteria. More research is needed to develop indicators for other scenario quality criteria, to improve those developed here and to study the impact of structuring tools with a larger data set.     

Risk management in local authorities: An application of Schatzki's social site ontology

Prior research has devoted limited attention to studying changes in organisational risk management (RM) practices. This is despite continuous dissatisfaction from academics and practitioners with organisations' ability to manage risks. We draw on Schatzki's social site ontology to study RM practices of two New Zealand local authorities that both experienced (earthquake) risk events and whose RM practices could be expected to change. We extend recent research utilising Schatzki, by finding that practical intelligibility and general understanding mutually affect each other in the organising of practices. Further, we extend Nama and Lowe’s (2014) addition to Schatzki by highlighting the importance of including teleological structures and accounting devices into the mutually constitutive relationship between general understanding and affectivity. Finally, we contribute to RM literature by proposing that changing the general understanding (in addition to the mere implementation of RM tools) is an important way of making RM change fundamental and sustainable.     

Strategising in the midst of management controls: a case study on the relationship between management controls and promises on strategies

By understanding strategies as promises, this study investigates how management controls are implicated in organisations’ strategising practice under continuous changes of external forces. Based on a historical case study of a New Zealand electricity firm, the study shows how multiple management controls facilitate a strategising practice that focuses on repromising new futures for the firm by enabling senior managers, board members and operational staff to memorise, forget and forgive promises made. The study suggests that organisations seeking to move from one promised future to another use management controls to help develop, solidify and bridge promises.     

Antitakeover devices and management efficiency: An empirical study using accounting measures

Separation of corporate ownership and control creates an environment whereby the agent (management) may pursue self-interests at the expense of the principal (stockholders). One mechanism protecting stockholders from self-interested management is the market for corporate control, or the takeover market. Antitakeover devices impede the operations of this market. This paper reports on the study of one type of antitakeover device, the supermajority nonfair price amendment. This device is particularly onerous, and if antitakeover devices do protect inefficient management as has been alluded to in the literature, then evidence of inefficiency should be observable for companies adopting supermajority nonfair price amendments.To test the above proposition, we examine the difference in performance over a seven-year period (1) Between firms having supermajority nonfair price amendments and a set of matched firms that do not have these devices, and (2) between firms with these amendments and their respective industries. In both tests, performance was lower for the firms adopting these amendments, which suggests that these devices are used to protect inefficient management. Further, the argument that managers of firms which adopt antitakeover devices so that they can take a long-term outlook at the expense of short-term profitability was not supported by the data.     

National influence on the application of IFRS: Interpretations and accounting estimates by German and British accountants

International comparability of financial statements under IFRS can only be achieved if standards are interpreted and applied consistently across countries. However, the different institutional and cultural environments of various countries in which companies operate and in which individuals make accounting decisions suggest that application of IFRS may differ. Building on previous studies that found evidence for this in the area of explicit options under IFRS, we examine the use of discretion in interpretations and accounting estimates by surveying German and British accountants, asking them to account for identical cases under IFRS. The results of this test provide only some evidence for international differences in accountants' judgments. This suggests that the national environment might be less relevant in those fields of room for maneuver in the application of IFRS. However, we find considerable variability of responses within jurisdictions and therefore further conclude that differences in personal characteristics might be more important than cultural factors.     

Accounting and the management of outsourcing: An empirical study in the hotel industry

Interview and survey data have been collected to study the nature and antecedents of accounting systems involved in hotel outsourcing decision-making and control. It has been found that there is considerable cross-hotel variation in the degree of accounting system involvement in outsourcing management. Performance and whether outsourcing decisions are made in the context of a long-term strategic agenda, appear to be variables affecting both the nature of accounting involvement and the degree of accounting sophistication in hotel outsourcing management. Hotel quality was also a significant factor affecting the degree of accounting sophistication in hotel outsourcing. It appears that accounting appraisal of outsourcing proposals rarely include long-term oriented sophisticated techniques such as the discounting of future cash flows. It is conjectured that this may be because outsourcing decisions are not conducted in the context of the formal capital budgeting process.