Strategic management accounting and strategy practices within a public sector agency

Empirical strategic management accounting (SMA) research has paid insufficient attention to the practices through which strategising occurs. SMA research has also overlooked the importance of strategy in the public sector and the specificities of this context that problematise existing knowledge of techniques that might make up SMA. Consequently, this study examines the role of management accounting in organisational practices through which strategy is enacted, and does this by way of a longitudinal study of a public sector agency. It is informed by the strategy-as-practice perspective that increasingly features in strategy research. The study identifies roles for management accounting in strategising that extend beyond the typically ascribed functions of decision-facilitation and decision-influencing. Its main contribution is the detailing of specific ways in which management accounting is constitutive of strategising through specific organisational practices. The findings of particular management accounting techniques being used for strategising by entities in the public sector provide a useful counter-point to the private sector orientation that has dominated SMA research to date. The study also outlines particular directions that a rebalanced SMA research agenda might take.     

Crafting Compromises in a Strategising Process: A Case Study of an International Development Organisation

This paper focuses on how organisational members in non‐governmental organisations (NGO) can develop credible and legitimate strategic plans and positions out of diverse and conflicting perspectives. Using empirical data drawn from a strategic planning episode in an international development NGO, the study examines the process of ‘crafting compromises’ whereby organisational members make mutual adjustments and concessions to reach consensus on new strategic plans and positions. The analysis shows that two processes facilitate crafting compromises in strategising; being adaptive and responsive to critique as strategic positions are developed, and an ability to forge relevant connections between new strategic proposals and past strategic positions.     

Accounting as an engine for the re‐creation of strategy at a university

This paper examines the role of accounting in the strategy re‐creation of a university. Drawing on Donald MacKenzie's theoretical notion of performative engines, our field study of an Australian university reveals how accounting, through various calculative practices, fuelled change and steered people into strategic action, leading to the formation of a new strategic plan. We contribute to the existing accounting and higher education literature on university strategising by illustrating how accounting, when convincing and accepted by decision‐makers, can function as an engine for the transformation and financialisation of universities’ strategies.     

The control dynamics of outsourcing involving an early-stage firm

Firms in the early stage of their organisational lifecycle experience challenges that shape the adoption of management controls. They are also recognised for their use of outsourcing. However, the accounting research has provided limited insight on how these control challenges and inter-organisational control concerns interact to influence the adoption of specific controls within an outsourcing relationship involving an early-stage firm. Exploration of this gap provides a key motivation for this paper. Contrary to existing management control and organisational science literature, we find a strong preference for new or enhanced action controls. Conversely, we find low levels of interest in result controls by managers within the buyer but not the supplier firm. These preferences influence inter-organisational control adoption within the frame of an incomplete outsourcing contract that emphasises flexibility in terms of relationship exit. Within the limits of a case study methodology, we argue that adoption of inter-organisational controls is shaped by tensions between the control challenges of early-stage firms, the control preferences of managers within these firms and inter-organisational control concerns. These findings have theoretical implications, expanding the Davila et al. [2009. Reasons for management control systems adoption: insights from product development systems choice by early-stage entrepreneurial companies. Accounting, Organizations and Society, 34 (3–4), 322–347] framework and the Merchant [1985. Control in Business Organizations. Boston, MA: Pitman] control typology into an ESF inter-organisational control context.     

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.     

Social and environmental accounting,organisational change and management accounting: A processual view

Consistent with calls for in-depth studies of social and environmental accounting and reporting (SEAR) intervention (Bebbington, 2007, Fraser, 2012, Contrafatto, 2012), our paper focuses on the interrelationship between organisational change and SEAR practices, as well as the involvement of management accounting in such organisational dynamics. Drawing insight from both Laughlin (1991) and Burns and Scapens’ (2000) theoretical frameworks, we explore the processes of change through which SEAR practices become elevated to strategising status, in the context of broader organisational and extra-organisational developments, but we also illuminate how institutionalised assumptions of profit-seeking limit the extent to which broader sustainability concerns become infused into day-to-day business practice. Our paper highlights the importance of management accounting in facilitating and shaping the cumulative path of SEAR practices (and sustainability more generally); however, we also heed caution against uncritical reliance upon conventional management accounting tools. The following paper extends our understanding of SEAR practices as cumulative process over time, an awareness of the potential limits to such developments in profit-seeking organisations, and stresses a need to be circumspect when involving management accounting.     

The persistence of international accounting differences as measured on transition to IFRS

The international accounting classification literature emphasises the importance of understanding how institutional factors shape accounting regulations and practices. With the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union and Australia in 2005, our empirical study examines whether three international accounting classification systems relating to equity financing, law and culture still had merit as measured on transition to IFRS and explore whether they are effective in grouping accounting systems. Using IFRS as the yardstick, we find statistically significant differences in the measurement of shareholders’ equity as between strong (Class A) versus weak (Class B) equity financing systems, common law versus code law systems and cultural systems based on ‘Anglo’, ‘Nordic’ and ‘More Developed Latin’ cultural groups. With regard to the measurement of net income, however, we find statistically significant differences only in respect of strong (Class A) versus weak (Class B) equity financing systems. Our findings demonstrate that traditional international accounting system differences still persisted at the time of IFRS adoption even after long periods of harmonisation and growing international accounting convergence.     

Benefits Expected by Accounting Firm Partners Selling their Firms to Publicly Listed Companies

In the 1990s and 2000s publicly quoted companies acquired thousands of accounting partnerships in Australia, the United Kingdom (UK) and the United States (US). Little is known of why the partners sold. This study examines the benefits expected by partners who sold their practices to two Australian publicly listed accounting companies. The findings suggest that there were many reasons for selling and a range of expected benefits, with some partners seeing the sale as a ‘silver bullet’ solution to all of the challenges of operating a small to medium‐sized accounting practice.     

The contract,accounting and trust: A case study of an international joint venture (IJV) in the United Arab Emirates (UAE)

This paper reports on the results of a case study that examines the effect of the contract and accounting on inter-organisational trust in an international joint venture (IJV). The empirical setting of the research was an IJV relation between a United Arab Emirates (UAE) firm and its western partner. Data were gathered from multiple sources, including documents, observations, interviews and discussions with managers. The paper aims to explore the process of trust development and the role of the contract and accounting in this. We find that trust developed differently for the partners. Moreover the trust concerns of the partners were not the same. Based on this we conclude that trust was not automatically reciprocated. Instead it needs relating to other items such as the contract, accounting and also the institutional environment. The open-book accounting we observed could only be termed ‘partial’ because the western partner had access to the local partner's books but not the vice versa. But this partial open-book accounting created conflicts between the partners. We argue that developing one kind of trust through one particular medium may help one party but may damage the relationship between the partners.     

Applying Conceptual Framework Principles to Superannuation1 Fund Accounting

The Australian accounting standard AAS 25, Financial Reporting by Superannuation Plans, was the first pension accounting standard internationally to apply established conceptual framework (CF) principles. In Australia those principles have guided standard setting for more than a decade. However, AAS 25 has been criticized for failing to provide useful financial information. The analysis provided in this article addresses this paradox. The findings reveal major anomalies in AAS 25 associated with the treatment of accrued benefits that distort financial position and performance measures. The conceptual flaws in the standard are attributed to the misapplication of CF principles and an absence of adequate guidance in the CF for non‐corporate entities such as superannuation funds. Distorted financial information produced by superannuation plans has potential undesirable taxation and social outcomes. Consequently, there is an urgent need to update the Australian and international conceptual frameworks to provide guidance for revising accounting standards that better reflect current fiduciary and ownership relationships in non‐corporate entities such as superannuation funds.     

战略管理会计概念和实务研究

战略管理会计是建立在企业战略管理有关理论基础上 ,以管理会计手段 ,运用会计信息有效地服务于企业战略的新领域。对战略管理会计定义内涵的研究的主要目的在于界定归属于战略管理会计的实务范围 ,并寻求战略管理会计的整体框架和运行规律。研究表明 ,凡是体现战略性属性方法和举措 ,均可列入战略管理会计实务的范畴。目前 ,在实际应用中常见的战略管理会计实务主要包括三大类 :战略性成本计算和定价、竞争对手会计和品牌价值会计。随着我国市场经济的发展以及我国进入国际市场的步伐的加快 ,战略管理会计的应用前景将会十分广阔     

The paradox of strategic management accounting

The evidence that strategic management accounting (SMA) techniques have not been adopted widely and that developments in the SMA literature seem to have languished may be consistent with the relatively short lifecycle of most strategic management (SM) tools and many concepts. Nevertheless, there is an inherent contradiction between the apparent decline of SMA and the sustained growth in the number of concepts, models, tools, theoretical perspectives, disciplines, academic and professional journals and consultancy practices that populate the SM domain.This paradox of SMA is explored in the context of the evolution of the SM literature, SMA practice, as exemplified by two recent case studies, and the cognate literatures of management control, performance measurement and knowledge management. It transpires that the SMA literature is based in large part on a narrow, first-era, view of the SM literature that reached maturity with Michael Porter's industry analysis model and generic competitive strategies.The second era of SM that began in 1977 with a move to a more internal, resource-based view of the firm and competitive advantage has been mostly neglected by the extant SMA literature. However, to judge from the small number of published case studies, SMA practices are developing in line with their strategy formulation and organisational processes. The links among the bundle of techniques that are usually included in SMA and between SMA and cognate literatures need to be integrated into a coherent, cohesive framework to complement SM.     

Accounting for Fair Competition between Private and Public Sector Armaments Manufacturers in Victorian Britain

Failures in rifle supply during the Crimean War (1853–56) caused the British government to seek a more reliable method for procuring weapons for military use. Fact‐finding missions to US rifle manufacturers led to the introduction of the ‘American system of manufacturing’ at a purpose‐built factory in north London. The extension of gun‐making facilities at the Royal Small Arms Factory, Enfield Lock, was accompanied by major accounting innovations driven by society's desire for ‘cheap and efficient’ government and, within a laissez‐faire environment, the need to ensure fair competition between private and public suppliers of military goods. Accounting practices based on ‘strictly commercial principles’ were then disseminated to other government military manufacturing establishments located at the Woolwich Arsenal. The historical knowledge revealed in this paper adds a new dimension to existing accounting historiography, which focuses principally on the business sector as the driving force for accounting change in Britain.     

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.     

Auditor–client management relationships and roles in negotiating financial reporting

We carry out an interview based field study of chief financial officer (CFO)–audit partner dyads to examine the assumption that the roles played by each side and the nature of the relationships are similar across negotiations. These dyads freely discussed with us their relationship, a specific issue negotiated and it’s resolution process. Employing the lens of social positioning negotiation research, we find these negotiations are ‘fluid’, with continual redefinition not only of the substantive issues under negotiation, but also of the negotiation roles and relationships (i.e. ‘shadow’ negotiations). The CFO’s actions and expectations in these ‘shadow’ negotiations appear to define the auditor’s role and the relationship’s parameters, but both can evolve over time. The audit partners express a desire to be in the “ideal” relationship where they assume the role of the ‘expert advisor’ (as opposed to a ‘police officer’) but they seemingly have no explicit strategy to move the relationship toward a ‘proactive’ (rather than ‘reactive’) state. Furthermore, the audit partner is always the ‘relationship manager’ whose job it is to see that client management remains “happy”. These roles and relationships negotiated in the ‘shadows’ also affect how the negotiation process unfolds, including the set of alternative accounting treatments considered during negotiations. Finally, audit firms appear to manage the assignment of partners to engagements based on CFO preferences and remove those partners who are in “poor” relationships, irrespective of why the relationship is considered by the CFO to be “poor”. Implications for the broader research program on auditor–client management negotiations are discussed.     

新旧会计准则下所得税会计核算的比较研究

为与国际惯例趋同,我国对会计准则体系进行了修订,2006年财政部颁布了新企业会计准则。与旧准则相比,新会计准则变化很大,如所得税会计核算,需要根据新会计准则重新设置会计科目进行会计核算,进一步明确了所得税会计信息的披露内容,以最大限度地满足会计信息使用者的需求。     

Interdependencies, trust and information in relationships, alliances and networks

The last decade has been characterised by the increased development of cross-company relationships, alliances and more complex business networks. This paper examines fundamental concepts that relate to the needs for information, including accounting information, in these interactive structures. It considers, initially, some consequences for accounting when planning and control is to be exercised across organisational boundaries, but the main thrust of the paper is to focus on the fact that all relationships depend to some extent on trust. The interaction between trust and information in personal relationships is explored to serve as a template against which to consider whether the information needs of inter-organisational relationships are similar. Having examined information needs of business relationships in general, the analysis is developed to consider the needs of different forms of corporate alliances and then wider business networks. This paper is an attempt to create a debate on new questions that seem to be fundamental to the design of information and accounting systems. It is not claimed to have provided definitive answers, but it is proposed that the lack of a well-developed theory of the interaction between trust and information has been a fundamental gap in our knowledge.     

Legitimating the standard-setter of public sector accounting reforms

ABSTRACT

This paper shows how the Brazilian Treasury has developed strategies to build legitimacy in a civil law context where the legislature left a vacuum regarding the accrual accounting standard-setting mandate. While the accounting ‘rule-enforcers’ neglected to require compliance with the rules, the ‘rule-makers’ co-operated with each other to build normativity for accounting rules and eventually attempted to develop new forms of enforcement, which the ‘rule-appliers’ lobbied against.     

XBRL to enhance external financial reporting: Should we implement or not? Case Company X

The growing use of eXtensible Business Reporting Language (XBRL) represents a fundamental change for financial information flows. In a number of countries XBRL has already been put to practical use, for instance through implementation within the financial processes of non-listed companies. This fictional case is designed to help identify the benefits of XBRL. In addition, it helps to create knowledge about the different strategies of XBRL implementation and to apply this knowledge when making investment decisions on accounting information processes.     

New development: Private finance over public good? Questioning the value of impact bonds

This article contrasts the proposed benefits of social impact bonds (SIBs) with the more mixed performance of initial projects, and reviews the early literature, revealing a similar divide between initial optimism and subsequent critique. Despite this, SIBs continue to receive high-level support, while expanding their reach through controversial new ‘development’ and ‘environmental’ impact bonds. This situation deserves more scrutiny in the accounting literature.