The basic framework for accounting for income taxes under generally accepted accounting principles (GAAP) has been in place for nearly 20 years. Influential GAAP commentators have recently called for a thorough review of the GAAP tax accounting rules in light of normative accounting theory. Before such a review can take place, GAAP reformers must be armed with an overview of the legal, economic, and practical realities of the corporate income tax in today’s business environment. Nothing in the extant literature provides such an overview. This Article provides that overview, drawing on classic and contemporary authorities from a variety of perspectives. Among other topics, this Article reviews the legal definition of a tax, demonstrates how taxes are noncontractual in nature, discusses issues of economic incidence, reviews the reality of tax planning in today’s business environment, reviews the legal literature that describes the government as a “shareholder” in all firms, and shows the interconnected relationship among GAAP, corporate tax planning, and government enforcement efforts. This Article helps bridge the GAAP and tax law worlds by laying the ground work for GAAP critics to thoroughly examine and critique the current GAAP rules for income taxes.
{"title":"A GAAP Critic’s Guide to Corporate Income Taxes","authors":"M. Cowan","doi":"10.2139/ssrn.2003900","DOIUrl":"https://doi.org/10.2139/ssrn.2003900","url":null,"abstract":"The basic framework for accounting for income taxes under generally accepted accounting principles (GAAP) has been in place for nearly 20 years. Influential GAAP commentators have recently called for a thorough review of the GAAP tax accounting rules in light of normative accounting theory. Before such a review can take place, GAAP reformers must be armed with an overview of the legal, economic, and practical realities of the corporate income tax in today’s business environment. Nothing in the extant literature provides such an overview. This Article provides that overview, drawing on classic and contemporary authorities from a variety of perspectives. Among other topics, this Article reviews the legal definition of a tax, demonstrates how taxes are noncontractual in nature, discusses issues of economic incidence, reviews the reality of tax planning in today’s business environment, reviews the legal literature that describes the government as a “shareholder” in all firms, and shows the interconnected relationship among GAAP, corporate tax planning, and government enforcement efforts. This Article helps bridge the GAAP and tax law worlds by laying the ground work for GAAP critics to thoroughly examine and critique the current GAAP rules for income taxes.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115588278","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Since the late 1980s, the Financial Accounting Standards Board has implemented several new fair value accounting rules that have resulted in unrealized fair value gains or losses in net income. However, accrual-based earnings management models such as the Modified Jones Model (MJM) of Dechow, Sloan, and Sweeney (1995) and other accrual models in the literature do not consider the net income effects of fair value accounting. The fair value hierarchy of Statement of Financial Accounting Standard No. 157 implies that valuation of level 1 and level 2 instruments is subject to observable market inputs, whereas the valuation inputs of level 3 are unobservable. Therefore, with respect to earnings management, level 3 instruments are more likely to be manipulated relative to level 1 and level 2 instruments. In this paper, we adjust the MJM by adding level 1 and level 2 instruments as explanatory variables to nondiscretionary accruals; we classify net income effects of level 3 instruments as discretionary accruals in our Fair Value Adjusted Modified Jones Model (FVAMJM). We show that the FVAMJM is more powerful than the MJM in detecting earnings manipulation based on level 3 instruments and is equally good in detecting expense and revenue manipulations. In addition, the nondiscretionary accruals derived under FVAMJM have incremental explanatory power to firm market value beyond the accruals of the traditional MJM; the discretionary accruals derived under FVAMJM contribute to identifying companies meeting or beating earnings targets after controlling for MJM discretionary accruals.
自20世纪80年代末以来，财务会计准则委员会实施了几项新的公允价值会计规则，这些规则导致了净收入中未实现的公允价值收益或损失。然而，基于权责发生制的盈余管理模型，如Dechow、Sloan和Sweeney(1995)的修正琼斯模型(Modified Jones Model, MJM)和文献中的其他权责发生制模型，并没有考虑公允价值会计的净收入效应。财务会计准则第157号的公允价值层次意味着，第一级和第二级工具的估值取决于可观察的市场输入，而第三级工具的估值输入是不可观察的。因此，就盈余管理而言，相对于第1级和第2级工具，第3级工具更有可能被操纵。在本文中，我们通过增加一级和二级工具作为非可操纵性应计项目的解释变量来调整MJM;我们在公允价值调整后的修正琼斯模型(FVAMJM)中将三级工具的净收入影响归类为可自由支配的应计项目。我们表明，FVAMJM在检测基于3级工具的盈余操纵方面比MJM更强大，并且在检测费用和收入操纵方面同样出色。此外，在FVAMJM下得出的非可支配性应计利润对企业市场价值的解释能力比传统MJM下的应计利润更强;FVAMJM下的可操纵性应计利润有助于识别在控制了MJM可操纵性应计利润后达到或超过盈利目标的公司。
{"title":"Earnings Management in the Context of Fair Value Accounting: Adjusting the Modified Jones Model to Fair Value Accounting","authors":"Changling Chen, Corinna Ewelt-Knauer","doi":"10.2139/ssrn.2214777","DOIUrl":"https://doi.org/10.2139/ssrn.2214777","url":null,"abstract":"Since the late 1980s, the Financial Accounting Standards Board has implemented several new fair value accounting rules that have resulted in unrealized fair value gains or losses in net income. However, accrual-based earnings management models such as the Modified Jones Model (MJM) of Dechow, Sloan, and Sweeney (1995) and other accrual models in the literature do not consider the net income effects of fair value accounting. The fair value hierarchy of Statement of Financial Accounting Standard No. 157 implies that valuation of level 1 and level 2 instruments is subject to observable market inputs, whereas the valuation inputs of level 3 are unobservable. Therefore, with respect to earnings management, level 3 instruments are more likely to be manipulated relative to level 1 and level 2 instruments. In this paper, we adjust the MJM by adding level 1 and level 2 instruments as explanatory variables to nondiscretionary accruals; we classify net income effects of level 3 instruments as discretionary accruals in our Fair Value Adjusted Modified Jones Model (FVAMJM). We show that the FVAMJM is more powerful than the MJM in detecting earnings manipulation based on level 3 instruments and is equally good in detecting expense and revenue manipulations. In addition, the nondiscretionary accruals derived under FVAMJM have incremental explanatory power to firm market value beyond the accruals of the traditional MJM; the discretionary accruals derived under FVAMJM contribute to identifying companies meeting or beating earnings targets after controlling for MJM discretionary accruals.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117166800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this study is to improve the understanding of the relation between management accounting information and control system design and environmental uncertainty i.e. intensity of competition. This study empirically tests the association between the types of competitive intensity and the investment in integrated cost management systems. The investment of cost management systems is measured using a comprehensive set of cost management practices across the value chain. These systems are tested as integrated strategies i.e. either upstream focussed or downstream focussed. Based on a sample of 77 responses from a survey of Australian manufacturing and service organisations, the study demonstrates that the association between the level of integrated cost management system investment and the individual intensity of competition dimensions of purchase and marketing for upstream-focussed systems whereas downstream-focussed systems are associated with the individual dimensions of price, technical personnel and purchase competitive intensities. This study is one of a limited number that provide evidence of (i) the importance of controlling for the type of competition in the design of management accounting information and control systems, specifically for cost management systems; and (ii) provides a comprehensive examination of cost management practice investment and integration across the value chain.
{"title":"Competition and Management Accounting Information and Control System Design: Survey of Australian Manufacturing and Service Organisations","authors":"S. Wallace","doi":"10.2139/ssrn.2132763","DOIUrl":"https://doi.org/10.2139/ssrn.2132763","url":null,"abstract":"The purpose of this study is to improve the understanding of the relation between management accounting information and control system design and environmental uncertainty i.e. intensity of competition. This study empirically tests the association between the types of competitive intensity and the investment in integrated cost management systems. The investment of cost management systems is measured using a comprehensive set of cost management practices across the value chain. These systems are tested as integrated strategies i.e. either upstream focussed or downstream focussed. Based on a sample of 77 responses from a survey of Australian manufacturing and service organisations, the study demonstrates that the association between the level of integrated cost management system investment and the individual intensity of competition dimensions of purchase and marketing for upstream-focussed systems whereas downstream-focussed systems are associated with the individual dimensions of price, technical personnel and purchase competitive intensities. This study is one of a limited number that provide evidence of (i) the importance of controlling for the type of competition in the design of management accounting information and control systems, specifically for cost management systems; and (ii) provides a comprehensive examination of cost management practice investment and integration across the value chain.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129097317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide evidence that firms with more transparent earnings enjoy a lower cost of capital. We base our earnings transparency measure on the extent to which earnings and change in earnings covary contemporaneously with returns. We find a significant negative relation between our transparency measure and subsequent excess and portfolio mean returns, and expected cost of capital, even after controlling for previously documented determinants of cost of capital.
{"title":"Cost of Capital and Earnings Transparency","authors":"Mary E. Barth, Yaniv Konchitchki, W. Landsman","doi":"10.2139/ssrn.1348245","DOIUrl":"https://doi.org/10.2139/ssrn.1348245","url":null,"abstract":"We provide evidence that firms with more transparent earnings enjoy a lower cost of capital. We base our earnings transparency measure on the extent to which earnings and change in earnings covary contemporaneously with returns. We find a significant negative relation between our transparency measure and subsequent excess and portfolio mean returns, and expected cost of capital, even after controlling for previously documented determinants of cost of capital.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"161 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124344121","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This clinical paper gives guidance on how to correctly compute and evaluate the share price performance of a corporation during a specific CEO tenure. Although the emphasis is on Deutsche Bank’s share price performance between 2002 and 2012, a lot of general questions relevant for this kind of assessment are tackled as well. For instance it is shown that currency adjustments are essential when comparing global companies if their shares are listed in different currency areas. In addition, the differences of dollar-weighted versus time-weighted returns for peer groups during consecutive observation periods are discussed.At Deutsche Bank’s AGM at the end of May 2012, the CEO tenure of Josef Ackermann officially ended after ten years in office. During his stewardship, Deutsche Bank established itself in the bulge bracket of investment banking and was one of the few global banks which survived the financial crisis without any direct government support. Whether his regime was successful for shareholders is controversial. It is shown that in spite of the fact that Deutsche Bank’s original share price performance during Ackermann’s stewardship has been negative by −50 %; it significantly outperformed other German financial institutions, international sector indices or hand-selected investment banking peer groups. However, it is not clear if this relative outperformance is solely attributable to Ackermann’s and his board members’ management capabilities or perhaps a result of implicit guarantees by the German government.Moreover, share price performance figures published by Deutsche Bank are reviewed. It turns out that some figures overstate the real performance. The same is true for e.g. Morgan Stanley’s performance graph in its latest 10-K report. This finally raises the question, how reliable share price performance figures presented by companies are. This is important for the ongoing pay-for-performance discussion because already the underlying data of share price performance could be biased.
{"title":"How to Evaluate the Share Price Performance During CEO Tenure: The Case of Josef Ackermann’s Stewardship at Deutsche Bank","authors":"Stephan H. Späthe","doi":"10.2139/ssrn.2136609","DOIUrl":"https://doi.org/10.2139/ssrn.2136609","url":null,"abstract":"This clinical paper gives guidance on how to correctly compute and evaluate the share price performance of a corporation during a specific CEO tenure. Although the emphasis is on Deutsche Bank’s share price performance between 2002 and 2012, a lot of general questions relevant for this kind of assessment are tackled as well. For instance it is shown that currency adjustments are essential when comparing global companies if their shares are listed in different currency areas. In addition, the differences of dollar-weighted versus time-weighted returns for peer groups during consecutive observation periods are discussed.At Deutsche Bank’s AGM at the end of May 2012, the CEO tenure of Josef Ackermann officially ended after ten years in office. During his stewardship, Deutsche Bank established itself in the bulge bracket of investment banking and was one of the few global banks which survived the financial crisis without any direct government support. Whether his regime was successful for shareholders is controversial. It is shown that in spite of the fact that Deutsche Bank’s original share price performance during Ackermann’s stewardship has been negative by −50 %; it significantly outperformed other German financial institutions, international sector indices or hand-selected investment banking peer groups. However, it is not clear if this relative outperformance is solely attributable to Ackermann’s and his board members’ management capabilities or perhaps a result of implicit guarantees by the German government.Moreover, share price performance figures published by Deutsche Bank are reviewed. It turns out that some figures overstate the real performance. The same is true for e.g. Morgan Stanley’s performance graph in its latest 10-K report. This finally raises the question, how reliable share price performance figures presented by companies are. This is important for the ongoing pay-for-performance discussion because already the underlying data of share price performance could be biased.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127812106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, I empirically investigate the impact of an organization’s reliance on collaborative creativity on the design of incentive systems. In creativity-reliant firms, i.e., firms for which the primary source of value creation lies in the creativity of their core employees, incentive system design is particularly challenging, since the nature of creative work constrains the feasibility of extrinsic incentives but at the same time creates a need for them. Accordingly, literature seems to suggest that the use of incentives renders people not creative enough, while a lack of them makes them “too creative”. I argue that a solution to this dilemma can be found in (1) acknowledging that the decision to use individual rewards is not made in isolation, and (2) viewing the incentive system as a set of complementary choices. I theoretically argue and empirically show that subjective evaluations of non-task-related performance and individual rewards are complements in creativity-reliant settings. Given the implications of this complementarity for incentive system design, I further show that reliance on collaborative creativity increases the use of individual rewards in the presence of such subjective evaluations, while it decreases its use in the their absence.
{"title":"Pay for Creativity? The Complementarity between Individual Rewards And Subjective Evaluations of Non-Task-Related Performance in Incentive System Design","authors":"Isabella Grabner","doi":"10.2139/ssrn.2132726","DOIUrl":"https://doi.org/10.2139/ssrn.2132726","url":null,"abstract":"In this paper, I empirically investigate the impact of an organization’s reliance on collaborative creativity on the design of incentive systems. In creativity-reliant firms, i.e., firms for which the primary source of value creation lies in the creativity of their core employees, incentive system design is particularly challenging, since the nature of creative work constrains the feasibility of extrinsic incentives but at the same time creates a need for them. Accordingly, literature seems to suggest that the use of incentives renders people not creative enough, while a lack of them makes them “too creative”. I argue that a solution to this dilemma can be found in (1) acknowledging that the decision to use individual rewards is not made in isolation, and (2) viewing the incentive system as a set of complementary choices. I theoretically argue and empirically show that subjective evaluations of non-task-related performance and individual rewards are complements in creativity-reliant settings. Given the implications of this complementarity for incentive system design, I further show that reliance on collaborative creativity increases the use of individual rewards in the presence of such subjective evaluations, while it decreases its use in the their absence.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122283720","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Managers at the Caterpillar plant in Aurora, Illinois were facing a request from senior executives at the home office in Peoria, Illinois for a “Footprint Study” – Identify the best global source (location) for production of the company’s new hybrid/electric exoloader. Using Caterpillar’s capital expenditure model (CapX model), students must decide whether to recommend expanding and refocusing an existing production facility in Aurora IL (Scenario A), or building a new facility in China (Scenario B). On the surface, the standard capital budgeting template looks like a clear manifestation of the rational decision making model. Decision makers, however, are subject to a predictable set of psychological biases (decision heuristics) that may surreptitiously influence the underlying assumptions used to produce a “rational decision” (Bazerman, 2009; Kahneman et al. 2011). The case introduces students to a variety of these decision biases in the context of the capital budgeting decision. Students are required to examine how the assumptions underlying Caterpillar’s capital budgeting template could be influenced by individuals’ decision biases. Furthermore, the case provides an opportunity for students identify the risk factors identified in Caterpillar’s 10-K and consider how the overall risk environment influences the company’s financial statements. Given their assessments of the overall risk environment, student must incorporate their assessments into a determination of the investment hurdle rates appropriate for the alternative capital expenditure scenarios. Ultimately, students must identify the assumptions underlying the CapX model and evaluate these assumptions on two dimensions: (1) importance of the assumption, and (2) uncertainty of the assumption. Students can use the resulting 2 × 2 matrix of assumptions to think about how they would prioritize their time in terms validating the model assumptions and assess how decision biases might influence assumptions uncertainty. In the terms of class implementation, the case is structured to essentially create a debate between those who support Scenario A (U.S. production) and those who support Scenario B (China production). For every argument in support of Scenario A, students also must develop a counter-argument against Scenario A and in favor Scenario B. The objective is to increase students’ ability to think using a 360° perspective. By pursuing a 360° perspective students open themselves up to a wider decision making perspective that might include innovative and potentially superior decision alternatives.
卡特彼勒伊利诺斯州奥罗拉工厂的经理们正面临着伊利诺斯州皮奥里亚总部高级管理人员提出的“足迹研究”要求——确定公司新型混合动力/电动装载机生产的最佳全球来源(地点)。使用卡特彼勒的资本支出模型(CapX模型)，学生们必须决定是建议在伊利诺伊州奥罗拉扩大和重新调整现有的生产设施(场景A)，还是在中国建立一个新设施(场景B)。从表面上看，标准的资本预算模板看起来像是理性决策模型的清晰体现。然而，决策者受制于一组可预测的心理偏差(决策启发式)，这些偏差可能会暗中影响用于产生“理性决策”的潜在假设(Bazerman, 2009;Kahneman et al. 2011)。本案例向学生介绍了资本预算决策背景下的各种决策偏差。学生需要考察卡特彼勒资本预算模板的基本假设如何受到个人决策偏差的影响。此外，该案例为学生提供了一个机会，让他们识别卡特彼勒10-K中确定的风险因素，并考虑整体风险环境如何影响公司的财务报表。鉴于他们对整体风险环境的评估，学生必须将他们的评估纳入适合替代资本支出情景的投资门槛率的确定中。最后，学生必须确定CapX模型背后的假设，并从两个方面评估这些假设:(1)假设的重要性，(2)假设的不确定性。学生可以使用由此产生的2 × 2假设矩阵来思考他们如何在验证模型假设方面优先考虑他们的时间，并评估决策偏差如何影响假设的不确定性。在类实现方面，案例的结构基本上是在支持场景a(美国生产)和支持场景B(中国生产)的人之间创建一个辩论。对于支持情景A的每一个论点，学生也必须提出反对情景A和赞成情景b的反论点。目的是提高学生使用360°视角思考的能力。通过追求360度的视角，学生们将自己打开到一个更广阔的决策视角，其中可能包括创新的和潜在的更好的决策选择。
{"title":"Caterpillar, Inc: The Impact of Decision Biases and Risk on Capital Budgeting","authors":"T. West, Tammy R. Waymire","doi":"10.2139/SSRN.2132944","DOIUrl":"https://doi.org/10.2139/SSRN.2132944","url":null,"abstract":"Managers at the Caterpillar plant in Aurora, Illinois were facing a request from senior executives at the home office in Peoria, Illinois for a “Footprint Study” – Identify the best global source (location) for production of the company’s new hybrid/electric exoloader. Using Caterpillar’s capital expenditure model (CapX model), students must decide whether to recommend expanding and refocusing an existing production facility in Aurora IL (Scenario A), or building a new facility in China (Scenario B). On the surface, the standard capital budgeting template looks like a clear manifestation of the rational decision making model. Decision makers, however, are subject to a predictable set of psychological biases (decision heuristics) that may surreptitiously influence the underlying assumptions used to produce a “rational decision” (Bazerman, 2009; Kahneman et al. 2011). The case introduces students to a variety of these decision biases in the context of the capital budgeting decision. Students are required to examine how the assumptions underlying Caterpillar’s capital budgeting template could be influenced by individuals’ decision biases. Furthermore, the case provides an opportunity for students identify the risk factors identified in Caterpillar’s 10-K and consider how the overall risk environment influences the company’s financial statements. Given their assessments of the overall risk environment, student must incorporate their assessments into a determination of the investment hurdle rates appropriate for the alternative capital expenditure scenarios. Ultimately, students must identify the assumptions underlying the CapX model and evaluate these assumptions on two dimensions: (1) importance of the assumption, and (2) uncertainty of the assumption. Students can use the resulting 2 × 2 matrix of assumptions to think about how they would prioritize their time in terms validating the model assumptions and assess how decision biases might influence assumptions uncertainty. In the terms of class implementation, the case is structured to essentially create a debate between those who support Scenario A (U.S. production) and those who support Scenario B (China production). For every argument in support of Scenario A, students also must develop a counter-argument against Scenario A and in favor Scenario B. The objective is to increase students’ ability to think using a 360° perspective. By pursuing a 360° perspective students open themselves up to a wider decision making perspective that might include innovative and potentially superior decision alternatives.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132815245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Motivated by repeated observations in the management accounting literature concerning the relevance of academic research to policy and practice communities, this study reports on an exploratory investigation of the perceptions and attitudes of a sample of 64 senior management accounting academics from 55 universities in 14 countries about the extent to which academic management accounting research does, and should inform practice. Drawing on Diffusion of Innovations theory as a point of departure, and based on evidence obtained from a questionnaire survey and subsequent interviews, our findings reveal the prevalence of two broad schools of thought. One school, represented by the majority of senior academics, and which we have identified as, the ‘majority view’, holds there is a significant and widening ‘gap’ between academic research and the practice of management accounting, and that this gap is of considerable concern. In contrast, the other school, which we identify as ‘the minority view’, holds that a divide between academic management accounting research and practice is appropriate, and that efforts to bridge this divide are unnecessary, untenable or irrelevant. From this empirical evidence, we advance a conceptual framework distinguishing between the ‘means’ and ‘ends’ of academic research which enables these two opposing schools to be located relative to each other. On the basis of this framework, we contend that framing the relationship between academic research and practice as a ‘gap’ is potentially an oversimplification, and directs attention away from the broader but fundamental question of the role and societal relevance of academic research in management accounting.
{"title":"In Our Ivory Towers? The Research-Practice Gap in Management Accounting: An Academic Perspective","authors":"Basil P. Tucker, L. Parker","doi":"10.2139/ssrn.2130224","DOIUrl":"https://doi.org/10.2139/ssrn.2130224","url":null,"abstract":"Motivated by repeated observations in the management accounting literature concerning the relevance of academic research to policy and practice communities, this study reports on an exploratory investigation of the perceptions and attitudes of a sample of 64 senior management accounting academics from 55 universities in 14 countries about the extent to which academic management accounting research does, and should inform practice. Drawing on Diffusion of Innovations theory as a point of departure, and based on evidence obtained from a questionnaire survey and subsequent interviews, our findings reveal the prevalence of two broad schools of thought. One school, represented by the majority of senior academics, and which we have identified as, the ‘majority view’, holds there is a significant and widening ‘gap’ between academic research and the practice of management accounting, and that this gap is of considerable concern. In contrast, the other school, which we identify as ‘the minority view’, holds that a divide between academic management accounting research and practice is appropriate, and that efforts to bridge this divide are unnecessary, untenable or irrelevant. From this empirical evidence, we advance a conceptual framework distinguishing between the ‘means’ and ‘ends’ of academic research which enables these two opposing schools to be located relative to each other. On the basis of this framework, we contend that framing the relationship between academic research and practice as a ‘gap’ is potentially an oversimplification, and directs attention away from the broader but fundamental question of the role and societal relevance of academic research in management accounting.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130317114","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Taking a multiple-control perspective, I investigate a control debacle and its aftermath at a financial services company (MultiBank), focusing on an insurance division (EurInsurance) that suffered large losses in the European insurance crisis of 2002-2003. The study tracks the promotion and use of a set of accounting and risk controls put in place to control the troubled insurance division, and discusses how and why particular management control systems shift in and out of top managerial focus. The study investigates Simons’ (1990, 1991) argument that it is top management’s view of a firm’s key strategic uncertainties that motivates their choice of control systems to be used interactively. Combining the process perspective of a longitudinal field study with the institutional logics perspective, I argue that top management’s control choice is motivated by both the logic of functionalism (relevance) and the logic of appropriateness (legitimacy) of particular controls - and that both of these are socially constructed by proponents.First, behind the various control systems there are active controller groups who, in competition for executive-level visibility, further their solutions for organizational control problems and engage in ‘credentializing’ (Power, 1992) to support their claims. At MultiBank, accountants drew on the institutional logic of accounting as a legalistic, rules-based practice, while risk controllers relied on the cultural authority of financial economics and the “full fair value” logic. Second, top management’s interactive use of a particular control system sends a signal to external stakeholders about the firm’s internal control style and management priorities. Therefore, the control choice is motivated both by the relevance and the institutional appropriateness of particular controls. As external requirements change and the definition of institutional appropriateness shifts, different organizational control groups get the opportunity to become implicated in interactive control and agenda-setting. In the special case of mutually incompatible control systems, when top managers must trade off relevance for appropriateness (or the other way round), their choice of interactive control will be driven by what they perceive to be the stronger requirement. At MultiBank, institutional appropriateness was the stronger requirement; the lack of it prevented an otherwise informationally relevant risk control system from prevailing as an interactive control system.
{"title":"Accounting, Risk Management and the Selection of Interactive Controls: Which, When and Why?","authors":"A. Mikes","doi":"10.2139/ssrn.2132405","DOIUrl":"https://doi.org/10.2139/ssrn.2132405","url":null,"abstract":"Taking a multiple-control perspective, I investigate a control debacle and its aftermath at a financial services company (MultiBank), focusing on an insurance division (EurInsurance) that suffered large losses in the European insurance crisis of 2002-2003. The study tracks the promotion and use of a set of accounting and risk controls put in place to control the troubled insurance division, and discusses how and why particular management control systems shift in and out of top managerial focus. The study investigates Simons’ (1990, 1991) argument that it is top management’s view of a firm’s key strategic uncertainties that motivates their choice of control systems to be used interactively. Combining the process perspective of a longitudinal field study with the institutional logics perspective, I argue that top management’s control choice is motivated by both the logic of functionalism (relevance) and the logic of appropriateness (legitimacy) of particular controls - and that both of these are socially constructed by proponents.First, behind the various control systems there are active controller groups who, in competition for executive-level visibility, further their solutions for organizational control problems and engage in ‘credentializing’ (Power, 1992) to support their claims. At MultiBank, accountants drew on the institutional logic of accounting as a legalistic, rules-based practice, while risk controllers relied on the cultural authority of financial economics and the “full fair value” logic. Second, top management’s interactive use of a particular control system sends a signal to external stakeholders about the firm’s internal control style and management priorities. Therefore, the control choice is motivated both by the relevance and the institutional appropriateness of particular controls. As external requirements change and the definition of institutional appropriateness shifts, different organizational control groups get the opportunity to become implicated in interactive control and agenda-setting. In the special case of mutually incompatible control systems, when top managers must trade off relevance for appropriateness (or the other way round), their choice of interactive control will be driven by what they perceive to be the stronger requirement. At MultiBank, institutional appropriateness was the stronger requirement; the lack of it prevented an otherwise informationally relevant risk control system from prevailing as an interactive control system.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122479651","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of current study is to investigate the relationship between social capital & the knowledge management in the Iranian National Oil Refining and Distribution Company. Our model has four dimensions of knowledge management and a model for social capital. The statistical sample of this study was the manager and employees of Iranian's National Oil Refining and Distribution Company. Based on the proposed research model, we have examined the research hypothesis, which consisted of one main hypothesis and five sub hypothesis. At last, the research hypotheses were tested by Spearman Correlation Factor and four hypotheses were accepted and one of them wasn’t accepted and their significance factor was confirmed. Afterward, by the multi-factor data analyze, it was noticed that the independent variables of research has variables of research have multi dimension correlation with km as a dependent variable.
{"title":"The Survey of Correlation between Social Capital and Knowledge of Management (The Case Study in National Oil Refining and Distribution Company in Iran (Shiraz))","authors":"M. Emami, A. Amini, A. Emami","doi":"10.2139/ssrn.2066918","DOIUrl":"https://doi.org/10.2139/ssrn.2066918","url":null,"abstract":"The aim of current study is to investigate the relationship between social capital & the knowledge management in the Iranian National Oil Refining and Distribution Company. Our model has four dimensions of knowledge management and a model for social capital. The statistical sample of this study was the manager and employees of Iranian's National Oil Refining and Distribution Company. Based on the proposed research model, we have examined the research hypothesis, which consisted of one main hypothesis and five sub hypothesis. At last, the research hypotheses were tested by Spearman Correlation Factor and four hypotheses were accepted and one of them wasn’t accepted and their significance factor was confirmed. Afterward, by the multi-factor data analyze, it was noticed that the independent variables of research has variables of research have multi dimension correlation with km as a dependent variable.","PeriodicalId":356551,"journal":{"name":"American Accounting Association Meetings (AAA)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126463323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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