Securing Accountability in Executive Management: The Advanced Role of Management Accountants as Accountability Partners

B eing asked to make a short speech as part of accepting the award inevitably leads to some introspection and reflection on major factors that have influenced one’s career, be they events or individuals. Past recipients of the award have been very influential in putting management accounting on the map. Some have been instrumental in developing the way we think about management accounting and teach the subject; some have developed important perspectives such as information economics, combining economics with psychology, the importance of national culture, activity-based cost management, and balanced scorecards. The way these recipients developed their thoughts is well told in their acceptance speeches and collectively provides a wealth of ideas and a historical perspective on the development of our discipline. I commenced my studies in economics, and I maintain a keen interest in economic approaches to management accounting. However, early in my academic career, I was pressed into considering an organizational approach to management accounting, not because it was an easier option; rather it addressed the world of management accounting within which I found myself. In this address, I will share with you some personal reflections on the process of my discoveries in the area of organizational approaches to management accounting from the mid-1960s. The backdrop to this address is that research is something of a growth model. Stage 1: starting from a baseline of skills and knowledge gained at undergraduate studies; stage 2: progressing through refinement of skills with more graduate study; and stage 3: consolidating through work toward publications and other academic outputs. Stages 1 and 2 are somewhat planned and incremental, while stage 3 is more often associated with less ordered processes, often stumbling across potential research areas by way of reading and personal interactions. Research projects can be focused around existing ideas, sometimes being somewhat formulaic, sometimes highly innovative. Often ideas can be serendipitous and develop in unpredictable ways. The key is to recognize when there is a management accounting angle that will relate to an important organizational or social issue.

The purpose of this study is to explore whether the adoption of Beyond Budgeting (BB) as a management accounting practice (MAP) contributes to developing intellectual capital (IC) and creating value in Iraqi companies. This requires an understanding of the views of the Iraqi managers about the nature of the information provided by this practice, which may be used to determine whether this information is relevant in the management of IC in the context of Iraq. This research aims also to explore the challenges of the adoption of the BB in planning and controlling IC in Iraq. The study adopts a qualitative approach and an interpretive paradigm. It also adopts a semi-structured interview method of collecting data from executive managers and management accountants of 20 companies in the four major economic sectors in Iraq. Of the sampled participants, 90% support the adoption of the philosophy of BB for planning and controlling of IC in their organisations. In addition, they confirm that the BB philosophy is based on new techniques that can eliminate the disadvantages of traditional budgeting. This study examines the contribution of the SM in supporting, establishing, and developing IC that is lacking in the literature. This study also examines the main problem that has not been studied in the Iraqi economy, which is whether the management and development IC will create new sources of value in Iraq instead of its dependence on oil as the main source of value for the country.

In the business environment, the present work aims to point out the role of Management Accounting in the management of the company, defined as a fundamental tool in the decision-making process within organizations. To analyze the information generated that helps managers achieve organizational objectives, answers to the following problem were sought: What are the benefits of adopting Management Accounting in business management? In search of an answer, the objective was to identify the benefits of Management Accounting within the business management model. The methodology used in this work was field study and bibliographic research. Through a structured interview, 10 questionnaires were applied, consisting of 8 objective questions, directed to accountants and administrators or professionals responsible for management, in companies from different market branches. For the survey of the company's practical information to be confronted with the theoretical knowledge related to the subject. The results showed that Management Accounting together with management is a fundamental tool in the decision-making process

MAY 2012 PLACEMENT ADS

The MERLIN-Expo tool was evaluated using a SWOT analysis, which was based on expert judgement and literature review. A list of criteria was set up containing the major model characteristics, which were divided in general model criteria and relevance model criteria. Relevance model criteria were defined as criteria, which are highly depending on the regulatory framework the model is used in. From the analysis presented above, it appeared that certain regulatory chemical frameworks (e.g. REACH, biocides) are stricter towards their requirements compared to others (e.g. site-specific/local regulatory frameworks). Based on expert judgement, the MERLIN-Expo tool was evaluated using the general and relevance criteria. MERLIN-Expo has many advanced functionalities (such as uncertainty analysis, modular approach, dynamic model, combines environmental fate with pharmacokinetics) and models (many fate processes and environmental compartments, different human populations). At the same time, the threat is that current (regulatory) applicability frameworks do not always require these advanced assessment functionalities. The MERLIN-Expo tool appeared to be most suitable for the site-specific assessment as this is the most flexible framework. Based on this analysis, weaknesses of the MERLIN-Expo tool for its use in a certain regulatory framework could also be identified. These weaknesses are at the same time further development opportunities for MERLIN-Expo. On general model characteristics, MERLIN-Expo was identified as a highly documented (both for novice and expert level), transparent, user-friendly tool with regular trainings. Its main treat now is to ensure continuing support and mechanisms for future developmental work and updates.

OAK-B135 Research under this project addresses the barriers to long term use of nuclear-generated electricity in the United States. It was agreed that a very basic and significant change to the current method of design and regulation was needed. That is, it was believed that the cost reduction goal could not be met by fixing the current system (i.e., an evolutionary approach) and a new, more advanced approach for this project would be needed. It is believed that a completely new design and regulatory process would have to be developed--a ''clean sheet of paper'' approach. This new approach would start with risk-based methods, would establish probabilistic design criteria, and would implement defense-in-depth only when necessary (1) to meet public policy issues (e.g., use of a containment building no matter how low the probability of a large release is) and (2) to address uncertainties in probabilistic methods and equipment performance. This new approach is significantly different from the Nuclear Regulatory Commission's (NRC) current risk-informed program for operating plants. For our new approach, risk-based methods are the primary means for assuring plant safety, whereas in the NRC's current approach, defense-in-depth remains the primary means of assuring safety. The primary accomplishments in the first year--Phase 1 were (1) the establishment of a new, highly risk-informed design and regulatory framework, (2) the establishment of the preliminary version of the new, highly risk-informed design process, (3) core damage frequency predictions showing that, based on new, lower pipe rupture probabilities, the design of the emergency core cooling system equipment can be simplified without reducing plant safety, and (4) the initial development of methods for including uncertainties in a new integrated structures-systems design model. Under the new regulatory framework, options for the use of ''design basis accidents'' were evaluated. It is expected that design basis accidents would be an inherent part of the Probabilistic Safety Assessment for the plant and their evaluation would be probabilistic. Other first year accomplishments include (1) the conversion of an NRC database for cross-referencing NRC criteria and industry codes and standards to Microsoft 2000 software, (2) an assessment of the NRC's hearing process which concluded that the normal cross-examination during public hearings is not actually required by the U.S. Administrative Procedures Act, (3) the identification and listing of reliability data sources, and (4) interfacing with other industry groups (e.g., NEI and IAEA) and NRC at workshops for risk-informing regulations. The major accomplishments during the second year consisted of (1) issuance of the final report for Subtask 1.1, ''Identify Current Applicable Regulatory Requirements [and Industry Standards],'' (2) issuance of the final report for Subtask 1.2,'' Identify Structures, Systems, and Components and Their Associate d Costs for a Typical Plant,'' (3) extension of the new, highly risk-informed design and regulatory framework to non-light-water-reactor technology, (4) completion of more detailed thermal-hydraulic and probabilistic analyses of advanced conceptual reactor system/component designs, (6) initial evaluation and recommendations for improvement of the NRC design review process, and (7) initial development of the software format, procedures and statistical routines needed to store, analyze and retrieve the available reliability data. Final reports for Subtasks 1.1 (regulatory and design criteria) and 1.2 (costs for structures, systems, and components) were prepared and issued. A final report for Subtask 1.3 (Regulatory Framework) was drafted with the aim to issue it in Phase 3 (Year 3). One technical report was produced for Subtask 1.4 (methods development) and two technical reports were produced for Subtask 1.6 (sample problem analysis). An interim report on the NRC design review process (Subtask 1.7) was prepared and issued. Finally, a report on Subtask 2.2 (database weaknesses) addressed the initial development of a new database to track reliability data. During the third and final year (Phase 3), work was completed on Subtasks 1.3 (regulatory framework), 1.6 (sample problem analysis), Subtask 1.7 (regulatory analysis), Subtask 1.8 (industry and NRC coordination), and Subtask 2.3 (reliability data improvements).

An institutional perspective on the changes in management accountants’ professional role

Many definitions of management accounting exist, and although these lack of complete agreement, it is possible to say that management accounting plays important roles in an organization. Particularly, it plays in the managerial tasks of planning, controlling, and decision­making. All organizations need to make decisions and need to plan and control their activities, and all organizations, whether they be in the private or the public sector, ought to be able to benefit from the use of such management accounting techniques. However, the management accounting literature and the development of the techniques of management accounting are almost exclusively concerned with a private sector environment. Little discussions are placed on the public sector environment. For this reason, the purpose of this paper is to discuss the role and operation of management accounting in the public sector. In so doing, this paper; firstly, discusses the role of management accounting in an organization, then, the role and operation of management accounting in the public sector. After that, in order to give a comparison between theory and practice, this paper describes the actual practice of the role and operation of management accounting in the New South Wales Department of Education as an illustration. Furthermore, such evaluation of management accounting practices in the public sector are dis­ cussed; andfinally; summary and conclusion.

This paper investigated the impact of globalisation, information technology and market forces on the traditional role of management accountants of providing relevant information for managerial decisions in an emerging market in the Middle East. The paper conducted a survey of practising management accountants in the United Arab Emirates (UAE) to examine their perceptions towards the effect of changes in the business environment on their current and future roles, and the extent to which globalisation and information technology (IT) have enabled them to provide better support for management decision making. The study findings indicate that globalisation and information technology are two key factors driving the change in the contemporary role of UAE management accountants. Local market forces were found to have no effect on the role of the management accountant. Thus, the principal contribution of this paper is drawing attention to the influence of globalisation, information technology, and gender on the changing role of contemporary management accountants. It is hoped that this would provide the first building block for theory that relates contextual factors to the role and function of management accountants.

The preconditions of knowledge economy have influenced global changes, which, consequently, had an impact on the nature of organizational equity. Furthermore, a dynamic and competitive climate urges managers to perfect their skills in global orientation, strategic flexibility and quick response to changes as a prerequisite of working under ever-transforming conditions, where an organization should be in the state of continuous development, responding to new technologies, new markets, new businesses, and new people (employees and consumers). The above-mentioned business environment and information access alternate the nature of market competition as well as determine particular information demand. Quick response and flexibility could be achieved, only if decisions are based on timely and adequate information, knowledge and experience in managing the external business environment and internal capacities of an organization. Thus, the new measurement tools are in demand, which should assist in measuring, planning, evaluating and managing the value-creating process inside the organization. The role of modern management accounting systems has extended from data accumulation to strategy implementation. The most popular management accounting conceptions, namely, activity based costing (management) and balanced scorecard, disclose how changed management accounting role integrates a focus on three key stakeholder groups: employees, customers and shareholders. Built on previous management accounting studies this article explores Lithuanian experience implementing modern costing and performance measurement systems. In order to point out the changing role of management accounting in Lithuanian organizations an empirical research was performed. This research consists of two main stages. 1) Implementation level of modern management accounting conceptions and the availability of information for decision making were analyzed using quantitative data (survey). 2) A deeper analysis was performed in Lithuanian organization disclosing the changing role of management accounting after implementation of modern costing and performance measurement system (case study). Results of empirical research indicate that there is quite a strong correlation between implementation level of conceptions (ABCM and / or BSC) and a range of management areas where information generated with the help of those conceptions is useful. Case study organization has started integration stages and has created information basis for cross functional and vertical communication through different management levels, but meanwhile there is an absence of communicative relations between top and lower management levels. The results of the research disclosed that modern management accounting conceptions might be precondition for changing role of management accounting but it depends on implementation level and organization’s ability to manage all capacities of these conceptions.

This research explores the perceptions of management accountants and their work community within a UK university, during a departmental restructure, when new roles and responsibilities emerged. Current literature on the role of management accountants suggests a lack of understanding as to how their role has developed over the years, with research being fragmented and rarely undertaken from the perspective of the service users, or the role holders. Research has predominantly concentrated on organisational aspects of change in management accounting, there being a dearth of research on the effect that role change has on the management accountant’s perception of their role, identity and associated power within the organisation. In addition, there is lack of field-based research and of practitioner research that is undertaken by qualified management accountants working in situ. A qualitative approach was adopted, wherein the author acted as an insider researcher. As an employee and qualified management accountant, the researcher was part of the community being investigated, which enabled observing-participant techniques to be used. Formal data generation spanned a two-year period, wherein semi-structured interviews were undertaken with nineteen key actors, including the accountants and those they served. Throughout, a research diary was maintained to record observations from meetings, face-to-face encounters, and the verbal and written communications associated with the accountant’s role. Cultural Historical Activity Theory was adopted as a lens with which to explore the perceived changes in perceptions that occurred between the management accountants and their wider organisational community. A thematic analysis of the data revealed three key themes: role, identity and power relations. On further analysis, inconsistent actor reports were apparent which referred to the decentralisation process and the change element of the managing accountants’ role. The resultant tensions and contradictions were analysed in detail as activity developed and altered over time. The effectiveness of the finance business partner model was seen to be flawed. In addition, the perceptions management accountants held of their role, identity and power within the university were impacted on negatively. Overall, analysis provided a rich picture that detailed the experiences of the difficulties and ambiguities brought about by change in the management accountants’ role. In investigating professional accountant practice in situ this study makes a strong contribution to the limited research that addresses the changing perceptions and roles of management accountants in the public sector. The insights further contribute to the literature of management accounting activity, in making a theoretical contribution to knowledge in the field of change, with specific reference to power relations, resistance to change, identity and role perception. With respect to the future, as the finance business partner role has become established in recent years, there is a need for a wider understanding of the transition in the management accountants’ role, as a finance business partner and further research is recommended both in the public and private sector.

This study contributes to understanding how firms pursuing differentiation strategy enhance exploratory innovation outcomes through business partner management accountants and their use of management accounting systems. Separate streams of literature analyzed the relationship between strategy and the role of management accountants in firms; and the relationship between the role of management accountants and new product innovation. Drawing on this evidence, I hypothesize that the relationship between differentiation strategy and exploratory innovation is mediated by two factors: a greater business partner orientation of management accountants and their subsequent use of the management accounting systems for attention focusing and decision making purposes. I find empirical support for the proposed three-path mediated effect using a structural equation model with survey data from 244 firms from German-speaking countries. In total, these findings reveal that management accounting department can be part of the strategy implementation mechanism in firms that emphasize exploratory innovation.

There has been a lot of debate on the new business-oriented role of management accountants during recent years. This paper examines how a case company is trying to change its management accounting culture in practice. Furthermore, it illustrates how accounting practices are woven into the cultural fabric of an organization and the great diversity of practices constituting its business orientation. This longitudinal case study explores and theorizes the multiple cultural change interventions related to management accounting, including how the case company reorganized the management accounting organization, implemented new accounting systems and innovations, pursued a new kind of human resource management (recruitment, training and career planning policies) and set the official corporate values in order to support this change. The deepened decentralization of the business controller function, combined with the effective and increasingly centralized basic accounting systems (such as ERP and consolidation packages) and HRM management, were of high importance in establishing the new business orientation. Moreover, informal interventions such as the role modelling and directing of personal attention – carried out by the top management and top financial executives – and storytelling, contributed to the constitution of cultural practices. Thus, the potential power of these informal change interventions and mechanisms should not be underestimated, with further research being, in fact, in great need. As its major theoretical development, at the end of the report, this study introduces a systematic framework of the cultural change interventions related to management accounting.

Recent developments in digital technology have revitalized interest in the relationship between technology and management accounting. Yet, few empirical in-depth studies have assessed how digital technologies influence the roles of management accountants. This paper builds on the concept of jurisdiction to illuminate the relationship between management accountants, expert knowledge and digital technology. The study identifies and describes competition over jurisdiction between management accountants and other groups of employees. The study describes a shift for divisional management accountants towards narrower roles in their tasks and expectations, while business-oriented roles at group level are found to entail expanding tasks and expectations. In doing so, management accountants are divided into two divergent categories facing different expectations: divisional and group level management accountants. Through a case study in the technology-oriented finance sector, the paper contributes to the debate on the roles of management accountants in a number of ways. First, it describes how digital technology can contribute to narrower and more specialized roles. Second, it describes how digital technology can contribute to competition between professions. Third, it elucidates how digital technology contributes to changes in the behaviour of decision makers, and in their expectations toward, and the involvement of, management accountants. Fourth, it details how the changes contributed by digital technology in the roles of management accountants can act as mediators in the identity-work of management accountants. Finally, it empirically describes the relationships between digital technology and management accountants’ roles.

Purpose: The article examines the role of management accounting in managing human capital, a key intangible asset for services sectors. Considering new expectations regarding the role of management accountants and human resource professionals, the article explores the ability of the disciplines to collaborate in becoming more strategic.Design/methodology/approach: The article considers literature on the evolution of the two disciplines, including archetype views on the role of management accountants, and presents case study analysis of a German information technology firm and a Dutch bank. Semi-structured interviews were conducted with senior managers from both the companies.Findings/results: From the interviews, it appeared that management accountants play the role of business partner but stop short of acting as comprehensive integrator of human capital information. While both companies have innovated in measuring and valuing human capital, human resources and finance analytics teams tend to work on their own and accountants remain ad hoc advisors.Practical implications: Efforts to refine the business case and value human capital fail to fully mainstream, as collaboration across departments remain loose. Innovations in soft management controls leave an impression of loose coupling between subsystems rather than comprehensively planned and integrated soft management control systems.Originality/value: The study defines complementarity between two disciplines, both seeking to account for and manage intangible assets more effectively. It concludes with lessons for researchers and practitioners on the development action-to-value pathways, improving non-financial metrics and purposefully shaping soft control systems.