For which purposes do managers use Balanced Scorecards?: An empirical study

The accounting literature frequently publishes articles that establish the adoption rates of accounting information systems, such as the Balanced Scorecard (BSC) or Activity-Based Costing, and subsequently examines the factors that drive this adoption. However, much less is known about the specific purposes for which these systems are used.In this paper, I examine the purposes for which managers use the Balanced Scorecard. Data was collected from a survey administered in 19 Dutch firms which had indicated that they used a BSC. The survey resulted in 224 responses from individual managers. Using exploratory factor analysis on Doll and Torkzadeh's [Doll, W.J., Torkzadeh, G., 1998. Developing a multidimensional measure of system-use in an organizational context. Information and Management 33, 171–185.] instrument of multidimensional MIS usage, I find that managers use the BSC for: (1) decision-making and decision-rationalizing; (2) coordination; and (3) self-monitoring.In the second step, I consider drivers of BSC usage for the three different purposes. These drivers are dimensions of evaluation style, alternative controls that are used in the organizational unit, and the receptiveness of managers to new types of information. I find that BSC usage for decision-making and decision-rationalizing purposes is driven by the degree of action controls used and manager's receptiveness to new information types. BSC usage for coordination purposes is driven by the emphasis placed on managerial evaluation of subordinates and the manager's receptiveness to new types of information. Finally, BSC usage for self-monitoring purposes is driven by the emphasis placed on managerial evaluation.     

Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles

In this study, we use institutional theory to explore how institutional pressures exerted on four state governments (New York, Michigan, Ohio, Delaware) influenced the decision of these governments to adopt or resist the use of generally accepted accounting principles (GAAP) for external financial reporting. We identify resource dependence as a potent form of coercive institutional pressure that was associated with early GAAP adoption. We identify three factors that may lead to initial resistance to institutional pressures for change. First, if accounting bureaucrats are not active in professional associations that promote GAAP adoption, they may miss the educational process that we believe is important to early adoption of GAAP. Second, organizational printing may impede GAAP adoption. Third, powerful interests may impede GAAP if the proposed GAAP legislation is expected to alter the existing power relationships. We found that key accounting bureaucrats in New York and Michigan used “compromise” as an initial strategic response to institutional pressures to adopt GAAP, Ohio's key accounting bureaucrat adopted a “defy” strategy, although the political leadership endorsed an “acquiesce” strategy. While Delaware initially employed a “manipulate”strategy with some success. Delaware did not adopt GAAP for external reporting until a political entrepreneur for GAAP emerged in the early 1990s. Our study suggests that all strategic responses to resist institutional pressures for GAAP adoption will ultimately fail because of the potency of the institutional pressures that result from the well organized professional accounting and governmental institutional fields.     

Management accounting systems and organizational configuration: a life-cycle perspective

This study adopts a configurational approach that captures possible variables (strategy, structure, leadership and decision-making styles) and their relationships with management accounting systems (MAS) from an organizational life-cycle perspective. Using Miller and Friesen's life-cycle model Miller & Friesen, 1983, Miller & Friesen, 1984, a set of hypotheses were tested with data from mail survey and field studies of firms in the clothing and footwear industry. Results indicated that MAS formality changed to complement organizational characteristics across life-cycle stages. In uncovering how and why MAS formality changed during organizational development, our results indicate that it is growth firms that pay particular attention to increasing the formality of their MAS. Furthermore, between stages, it is the selection of management accounting tools that dominates the presentation of information in explaining the different MAS life-cycle stage designs. While based on cross-sectional data, the homogeneity of organizational configurations at each life-cycle stage does suggest that these results imply a longitudinal development of MAS.     

SMEs' tax compliance costs and IT adoption: the case of a value-added tax

The objective of this study is to examine the factors behind the adoption of a tax-compliant accounting system among small and medium-sized enterprises (SMEs) using the technological–organizational–environmental (TOE) framework, particularly the role of tax compliance costs in fostering the adoption of this system. This study makes a novel contribution by attempting to link the influence of tax compliance costs to the information technology (IT) adoption literature. Questionnaires were distributed to 401 SMEs, and data were analyzed using partial least squares. The results suggest that the TOE framework is useful for examining factors that affect SMEs' IT adoption decisions; the influence of perceived compatibility, complexity, relative advantage, and mimetic and regulatory pressure is important for the adoption of a value-added tax (VAT)-compliant accounting system. Moreover, the impact of compatibility, learning from external sources, and perceived coercive pressure on the adoption of a VAT-compliant accounting system is moderated by tax compliance cost.     

领导情绪劳动对员工组织认同的影响研究——变革型领导的中介作用

基于中国文化情境,使用跨层次分析方法考量领导情绪劳动对变革型领导和员工组织认同的影响。结果表明:浅层行为与组织认同负相关,深层行为、真实情绪表现分别与组织认同正相关;变革型领导在领导情绪劳动与员工组织认同关系中起部分中介作用;领导成员交换关系在变革型领导与员工组织认同之间起调节作用。因此,企业领导宜调节自己的情绪和塑造自己变革型领导风格,增强员工组织认同感,提升管理效率。     

Examine ERP post-implementation stages of use and value: Empirical evidence from Portuguese SMEs

There is a great interest among researchers and practitioners in accounting information systems (AIS) value. This is particularly important in cases of systems such as enterprise resource planning (ERP). This paper empirically measures and analyses the determinants of ERP use and value in a single framework, as well as provides empirical evidence from Portuguese small and medium enterprises (SMEs). Drawing upon theories on the process and contexts of information technology (IT) we postulate nine hypotheses. Used the technology–organization–environment (TOE) framework to hypothesize how compatibility, complexity, efficiency, best-practices, training, and competitive pressure explain ERP use. Based on the resource-based view (RBV) theory we hypothesize how ERP use, collaboration and analytics explain ERP value, and its potential contribution for the nature of management control and accounting information systems on Portuguese SMEs. Through structural equation modeling, a data set of 134 web-surveyed firms is used to test the hypotheses. Our empirical analysis leads to six main findings: 1) compatibility, complexity, best-practices, and efficiency are more important determinants for ERP use as well as training and competitive pressure, suggesting that technological, organizational and environmental characteristics are the main drivers of ERP use among Portuguese SMEs. 2) Similarly, collaboration and analytics are more important for ERP value upon use, suggesting that system capability characteristics are the main drivers of ERP value. 3) ERP value benefits from system enhancements to firms' business processes in the post-implementation phases. 4) For Portuguese SMEs the mostly valued metric attained through ERP is management control. 5) Impelled by legislation, Portuguese SMEs are using ERP as the accounting system for management, financial and tax accounting. 6) Portuguese SMEs invest more than 70% of their annual IT budget to ERP use. Together, these findings offer insights into how Portuguese SMEs use and extract value from ERP, and how enhancements positively impact the system's value. Unlike the typical focus on ERP adoption described in the literature, this research focuses on the post-implementation phase, linking actual use with value creation, adding an empirical study to the AIS literature.     

Contemporary performance measurement systems: A review of their consequences and a framework for research

The main purpose of this paper is to develop a conceptual framework for understanding the literature on the consequences of contemporary performance measurement (CPM) systems and the theories that explain these consequences. The framework is based on an in-depth review of 76 empirical studies published in high-quality academic journals in the areas of accounting, operations, and strategy. The framework classifies the consequences of CPM into three categories: people's behaviour, organizational capabilities, and performance consequences. This paper discusses our current knowledge on the impact of CPM, highlighting inconsistencies and gaps as well as providing direction for future research.     

Modeling RBRT adoption and its effects on cost of capital

In the capital market, firms compete to obtain capital at a lower cost than their rivals. In order to do so, firms may try to increase their information disclosure by adopting new information technologies, such as a real-time business reporting technology (RBRT). The financial accounting literature has empirically provided positive evidence of increased transparency (e.g., resulting from RBRT adoption). We attempt to link the transparency and cost of capital literatures and extend organizational innovation adoption theory.We adapt some constructs from existing innovation adoption theory, as well as contribute some that apply to a RBRT context, to develop a mathematical model on the relationship between RBRT adoption and the cost of capital. The model considers both micro-(firm) level factors and macro-level factors that affect the adoption decision. We argue that cost of capital savings, uncertainty, risk aversion, transaction and transformation costs, and governmental policy affect a firm's decision of whether and when to adopt a RBRT. A number of propositions are derived, based on our model, which may help firms formulate their adoption strategy. Our model also provides a basis for further empirical study on this new issue.     

Administrative theory and administrative systems: A synthesis among diverging fields of inquiry

Taking what is termed an “administrative systems perspective”, this paper describes the interrelationships which exist among 5 fields of inquiry, traditionally treated separately in the literature on administration and management: organizational design, organizational strategy, organizational values, motivation and management control. Several areas of interaction are discussed: (1) among strategy formulation, motivation, and organizational design, (2) among organizational values, motivation, and the management control process, (3) between management control and organizational design, and (4) between management control and strategy.     

Testing for Offsetting Behavior and Adverse Recruitment Among Drivers of Airbag-Equipped Vehicles

Earlier studies reported that an insurance industry index of personal‐injury claims rose after automobiles adopted driver's side airbags and that drivers of airbag‐equipped vehicles were more likely to be at fault in fatal multivehicle accidents. These findings can be explained by the offsetting behavior hypothesis or by at‐risk drivers systematically selecting vehicles with airbags (i.e., adverse recruitment). We test for offsetting behavior and adverse recruitment after airbag adoption using a database containing information on fatal accidents including information on drivers' previous records and drivers' actions that contributed to the occurrence of the accident. Further, we reexamine the personal injury claims index data for newly airbag‐equipped vehicles and show that the rise in the index after airbag adoption may be attributable to moral hazard and a new vehicle ownership pattern. Rental car drivers are much more likely to commit grievous acts than other drivers, and the proportion of new automobiles in daily rental service more than doubled during the period of airbag adoption.     

Conducting the international orchestra: Bank of England leadership under the classical gold standard

A large literature assigns to the Bank of England a leadership role in the management of the classical gold standard. This paper documents the exceptional behavior of the Bank of England's discount rate — in particular, that it tended to lead discount rates abroad. It then develops a game-theoretic analysis of central bank interaction under the classical gold standard. Sterling's reserve currency status is shown to provide a rationale for Stackelberg leadership by the Bank of England. Contrary to popular notions, however, Britain's foreign creditor status does not provide a basis for the Bank of England's leadership strategy.     

国际化银行组织架构分析与借鉴

20世纪70年代以后,西方银行开始进行组织架构的变革。以客户为中心、专业化和垂直型的组织架构模式已经成为包括国际化银行在内的西方银行的主流模式。本文通过对几家典型国际化银行的考察发现,国际化银行的组织架构并没有统一的模式,但具有共同的特点,即以客户为中心设计组织架构、矩阵式结构应用普遍、组织架构与战略及环境相匹配、组织形式灵活等。中资银行可以得到的借鉴在于:组织架构不能"一劳永逸",需要不断调整;设计组织架构要综合考虑内外部因素,"量体裁衣";进一步围绕客户设置前台部门;逐步推进业务线垂直管理;考虑对境外机构的区域管理等。     

Understanding cost differences in the public sector—a cost drivers approach

Estimation of cost causality has always been an important part of the accountant’s work. This includes the identification, classification and estimation of factors causing a change in the total cost of a related cost object. In the recent literature these factors are called cost drivers. Different approaches and conceptual frameworks for understanding cost causality are found in the economics, strategy and accounting literature. This paper examines different cost driver approaches in a public sector setting. The study is based on data from primary and secondary schools in the four largest cities in Norway. The findings show that a strategic management accounting approach provides a framework for selecting a broader set of explanatory variables than the traditional cost estimation literature. This set includes product attributes, institutional factors and government policy as cost drivers in the public sector.     

Attracting Long‐Term Investors Through Integrated Thinking and Reporting: A Clinical Study of a Biopharmaceutical Company

Faced with a large percentage of investors that chase short‐term returns, companies could benefit by attracting investors with longer‐term horizons and incentives that are more consistent with the long‐term strategy of the company. The managers of most companies take their investor base as a “given” that cannot be changed through their actions or words. Using the case of Shire, a biopharmaceutical company with a strong commitment to the goals of improving the safety of its products and the reliability of its supply chain, the authors of this article suggest that companies have the ability and the means to change their investor base in ways that are consistent with their strategy. One of the most promising ways of attracting such investors is integrated reporting, which provides companies with a means of credibly communicating the commitment of its top leadership to diffusing integrated thinking across the organization and to building strong relationships with important external stakeholders. In the case of Shire, both a commitment to integrated thinking and the adoption of integrated reporting appear to have helped the company attract longer‐term investors, which in turn has strengthened management's confidence to carry out its strategy of stakeholder engagement and investment.     

The determinants of inter-organizational and internal in-house adoption of XBRL: A structural equation model

Prior research has investigated organizational adoption of inter-organizational Information Technology (IT) using the Technological–Organizational–Environmental (TOE) framework. While that research has yielded important insights into the adoption of inter-organizational IT, new technologies, such as XBRL, can be used inter-organizationally or internally. As such, testing the TOE framework in both an internal and inter-organizational context is vital because the independent variables explaining internal adoption may be different from those explaining inter-organizational adoption. Using XBRL as a representative example, the TOE framework is used in this study to investigate XBRL adoption for both internal and inter-organizational purposes. The results suggest that the drivers of internal adoption differ from those of inter-organizational adoption. Based on these results, we encourage future research to consider whether the significance of technological, organizational, and environmental variables change based on whether a technology is adopted internally or inter-organizationally. From a practical perspective, the findings can help professional associations encourage adoption of XBRL.     

Explainable Artificial Intelligence (XAI) in auditing

Artificial Intelligence (AI) and Machine Learning (ML) are gaining increasing attention regarding their potential applications in auditing. One major challenge of their adoption in auditing is the lack of explainability of their results. As AI/ML matures, so do techniques that can enhance the interpretability of AI, a.k.a., Explainable Artificial Intelligence (XAI). This paper introduces XAI techniques to auditing practitioners and researchers. We discuss how different XAI techniques can be used to meet the requirements of audit documentation and audit evidence standards. Furthermore, we demonstrate popular XAI techniques, especially Local Interpretable Model-agnostic Explanations (LIME) and Shapley Additive exPlanations (SHAP), using an auditing task of assessing the risk of material misstatement. This paper contributes to accounting information systems research and practice by introducing XAI techniques to enhance the transparency and interpretability of AI applications applied to auditing tasks.     

The contingent relationship between the controller and internal audit functions in large organizations

The research literature on organizational control in large business firms does not address the inter-relationship between the controller and internal audit functions. Yet these functions are commonly used to effect control within large, diversified corporations having hierarchical management. This research uses principal-agent theory to hypothesize the need for complementary control systems for monitoring and verifying inter-manager relationships in large U.S. firms. The research findings suggest that the primary duties and responsibilities assigned to the internal audit function are related to the organization, centralization vs decentralization, of the controller function so that effective organizational control can be achieved.     

Organizational change in an Australian university: Responses to a research assessment exercise

The objective of this paper is to explore the way internal organizational control processes are changed in response to external demands. It does this by investigating the organizational change undertaken by an Australian university in anticipation of, and in response to, an externally imposed research assessment exercise (RAE), specifically focusing on the university's internal research-related performance management system (PMS) and its impact on academics. It adopts a case study method, using data from publicly available documents, interviews with senior management, and a survey administered to academics. The data is interpreted and analyzed using Broadbent and Laughlin's organizational change model. The findings reveal that RAE was anticipated with the appointment of new senior leadership, a new vision, restructure of faculties and departments, and changes to the research PMS. The changes to both the university's mission (significant and longlasting, second order change) and its internal systems (less significant, first order change) are evident. In the context of the global proliferation of PMSs in the higher education sector, this paper contributes to the literature on PMSs, indicating its relevance to universities. Its empirics provide useful insights for university managers and regulators and, more broadly, the paper contributes to our understanding of organizational change.     

Bank Mergers and Small Firm Finance: Evidence from Lender Liability

As a merger approaches, the value of repeat business for the target bank can drop sharply, so loan relationships between this bank and small businesses are often disrupted. Small firms sometimes experience serious value destruction as a consequence of this sudden lack of credit. This paper shows that lender liability may result from bank mergers and bankers involved in mergers often engage in aggressive, scorched‐earth defense tactics to discourage further litigation. I summarize six lender liability cases to illustrate these points. Bank mergers have been shown to reduce credit availability in a number of studies. Since small firms depend on credit for their daily existence, owners of small firms do have a reason to fear a merger of their bank with a larger institution. Analyzing merger effects with survey data of firms obtained after a bank merger, an empirical strategy used in a number of studies, raises problems since the only firms considered are the ones that survived the bank merger. Suggesting that the problem will cure itself in the long run, an argument advanced in other studies, ignores small firms' daily dependence on credit. In the long run we are all dead. Bank examiners need to evaluate an institution's litigation experience and measure a bank's organizational architecture – its ethical climate. Banks which are repeatedly involved in lender liability lawsuits should be denied future mergers until there is a change in organizational architecture. To assist in evaluating organizational architecture, banks should be required to report their litigation expense on their call reports. Furthermore, regulators should seriously consider the recent suggestion of Carow, Kane and Narayanan (2006) that they take steps to ensure that participants in bank mergers preserve target bank relationships. Otherwise negative effects on small business lending and economic growth will continue as bank consolidation proceeds.