Future Accounting Research Research Articles

Why Do We Work? Empirical Evidence on Work Motivation and the Effects of Management Control System Design on Work Motivation

Building on the concept of perceived locus of causality (PLOC), this study examines: 1) whether individual work motivation can be classified with the four orientations in the PLOC framework: intrinsic, identified, introjected, and external; 2) the effects of management control system design choices on each motivational orientation; 3) and the consequences of each motivational orientation on employee behavior. We address these research questions using an online survey of 592 U.S. employees from diverse industries and professions. We have the following findings: First, we develop and validate a scale of PLOC work motivation (PLOC-WM) and find that the four motivational orientations are distinct from each other and multiple motivations coexist within individual respondents. Second, we find that management control systems influence individual motivational orientations, incremental to individual personality effects. Finally, we find that motivational orientations have significant impact on individual effort, creativity, organizational identification, organizational citizenship behavior, and turnover intentions. We make a methodological contribution by developing and validating a scale of PLOC work motivation, which goes beyond the traditional intrinsic/extrinsic dichotomy and recognizes a richer range of motivation orientations. The scale we develop and the empirical evidence we provide on the links between control system design, motivation orientation and employee behavior will advance future accounting research on work motivation.

Outsourcing the Information System: Determinants, Risks, and Implications for Management Control Systems

ABSTRACTOrganizations are outsourcing traditional functions that have financial reporting implications, such as transaction processing and valuation assessments, with increasing frequency. This practice of outsourcing aspects of the information system transforms the control structure of the outsourcing company and creates new challenges for management and accountants that are not explicitly addressed by current research. In this paper we synthesize academic literature and regulatory guidance on using third parties to perform functions with financial reporting implications (i.e., service organizations) and identify specific opportunities for future accounting research. To provide structure to our review and highlight knowledge gaps, we develop an organizing framework that links existing theories of outsourcing determinants to outsourcing risks and identifies the advantages and limitations of certain control mechanisms to mitigate such risks. Very little academic research exists on the use of service organizations, despite the rapid growth of this practice and regulators' concerns that financial reporting quality may suffer due to inappropriate management oversight and audit deficiencies. We provide insights for future research on (1) factors influencing companies' decisions to outsource the information system, (2) risks that arise when companies outsource the information system, and (3) implications for management control systems.

The SEC's Proposed IFRS Roadmap: An analysis of comment letters using content analysis and textual software

We examine comment letters written in response to the SEC's Proposed IFRS Roadmap using traditional content analysis and CLUTO, a unique text clustering software. We find that while there is strong support for the idea of one set of high quality global accounting standards, a majority of respondents are opposed to the proposed roadmap. Additionally, our results suggest that comments received systematically differ with respondent characteristics such as respondent type, firm characteristics, and industry affiliation. Finally, the complementary use of CLUTO with manual content analysis and the robust results obtained from CLUTO, provide support for the potential use of CLUTO to examine large textual databases in future accounting research.

Exploring the Strategic Integration of Sustainability Initiatives: Opportunities for Accounting Research

SYNOPSIS We report the results of a survey of 178 corporate responsibility officers designed to explore how accountants can add value to sustainability initiatives. Specifically, we examine how three areas of accounting expertise (risk identification and measurement, financial reporting, and independent review/assurance) contribute to the strategic integration of sustainability initiatives (cf. Porter and Kramer 2006; IIRC 2011). Our results indicate that accounting professionals are rarely involved in sustainability initiatives, but their involvement is highly associated with strategic integration. This finding suggests that increased involvement likely would provide significant benefits to organizations and their stakeholders. We use these and other important insights into a series of research questions for future accounting or interdisciplinary research in sustainability. These insights about accountants' ability to enhance the strategic integration of sustainability initiatives also should be of interest to accounting and consulting firms as they design and market their sustainability services. Data Availability: Data are available upon request.

Role of Management Accounting Systems in the Development and Efficacy of Transactive Memory Systems

ABSTRACT In-depth understanding of the factors that facilitate group learning and group performance is critical for firms given the preponderance of group-based work in modern organizations. A firm's management accounting system (MAS) can play a critical role in the development of group learning. This paper discusses the role of MAS on an important driver of group learning; i.e., the group's transactive memory system (TMS). TMS refers to a shared memory system whereby group members obtain mutual awareness of relative expertise of individual group members based on interactions between members. Significant extant research reveals positive effects of TMS on team performance. We posit that MAS can influence the development of TMS; for example, MAS can facilitate encoding, storing, and retrieving information for TMS development (the information effect). MAS can also assist in increasing employee motivation to effectively contribute to and utilize TMS (the motivation effect). We discuss these two effects of MAS on TMS and provide implications and directions for future accounting research.

Outcome Feedback, Incentives, and Performance: Evidence from a Relatively Complex Forecasting Task

ABSTRACTThis study extends prior research by examining a fairly common sequence of business events: numeric outcome information is produced and reviewed, decisions are influenced by this information, and the process repeats (i.e., a feedback loop occurs). We find that incentivized decision makers exhibit substantial decision improvement after only one iteration of summary outcome feedback. In contrast, other between-subjects groups fail to improve performance across iterations of Luft and Shields' (2001) forecasting task. Our results suggest that financial incentives and outcome feedback are both critical to performance improvement in relatively complex iterative tasks. When either incentives or feedback is absent, performance suffers. While prior research has found outcome feedback relatively ineffective at improving complex task performance, our results indicate that outcome feedback and incentives complement each other to improve performance. We believe exploring the interaction of incentives and feedback offers interesting avenues for future accounting research.Data Availability: Study data are available from the authors upon request.

Expanding your accounting classroom with digital video technology

In the past, many activities of accounting professors were restricted or confined by their classroom walls. Bringing in guest speakers, taking students on field trips and teaching students off-campus (either locally or globally) were extraordinary efforts that required significant organization. Today, numerous technological advancements in communication infrastructure, equipment and online tools greatly facilitate such initiatives. Outside experts can now visit the classroom, students can explore or collaborate in distant places and professors can extend the geographical reach of their lessons simply via the means of digital video technology. Based on our 2010 Conference on Teaching and Learning in Accounting (CTLA) Master Class, we share our experiences in exploring the use of digital video in teaching accounting and explain how numerous accounting professors are taking advantage of the capabilities afforded by digital video technologies. Online video clips, student video projects, and online video lecture recordings hold great promise for accounting education. We have created a website that complements and demonstrates the teaching ideas presented in this article and that facilitates video integration into accounting courses. We discuss the pedagogical benefits of using video, including those from general education and accounting literature. The article concludes with suggestions for how accounting faculty can keep current with video technology, areas for future accounting research and a call to action for accounting educators. Our work with digital video technology has led to the 2011 American Accounting Association (AAA) Innovation in Accounting Education Award as well as the 2010 Canadian Academic Accounting Association (CAAA) Howard Teall Innovation in Accounting Education Award.

On the use of partial least squares path modeling in accounting research

Partial least squares (PLS) is an approach to structural equation modeling (SEM) that is extensively used in the social sciences to analyze quantitative data. However, PLS has not been as readily adopted in the accounting discipline. A review of the accounting literature found 20 studies in a subset of accounting journals that used PLS as the data analysis tool. PLS allows researchers to analyze the measurement model simultaneously with the structural model and allows researchers to adopt more complex research models with both moderating and mediating relationships. This paper assists accounting researchers that may be interested in adopting PLS as an analysis tool. We explain the benefits of using PLS and compare and contrast this analysis approach with both ordinary least squares regression and covariance-based SEM. We also explain how the PLS algorithm works to derive estimates for the measurement and structural models. To further assist researchers interested in using PLS, we offer guidelines in the development of research models, analysis of the data, and the interpretation of these results with PLS. We apply these guidelines to the accounting studies that have used PLS and offer further recommendations about how researchers could apply PLS in future accounting research.

In TripAdvisor we trust: Rankings, calculative regimes and abstract systems

A proliferation of rankings and league tables increasingly permeate everyday life. An objective of this paper is to explain the profusion of such rankings, in particular on-line user review rankings, in contemporary society and what this means for our understanding of the role of accounting. The online travel website TripAdvisor and its hotel ranking system is a prominent example of this new phenomenon. The site increasingly appears to play the role of trusted intermediary for the ‘independent traveller’ who spurns the services of the traditional travel agent in favour of making their own holiday arrangements. In this paper, we undertake netnographic research to consider the way in which TripAdvisor rankings engender trust. Drawing on the site’s own operational features together with an analysis of the traveller commentaries hosted within the site, we argue that the case of TripAdvisor is a powerful illustration of an internet mediated abstract system ( Giddens, 1990, 1991) that draws on calculative practices to construct trust. In addition, we speculate as to the implications of the proliferation of such internet mediated expert systems, both on the accounting profession, and on future accounting research.

An Empirical Analysis of the Role of Risk Aversion in Executive Compensation Contracts

This paper empirically tests the principal-agent model prediction that the use of performance measures for incentive purposes is affected by the agent's risk aversion. We identify proxies for managerial risk aversion that can be measured using publicly available executive compensation data and find that the use of both accounting and market performance measures in executive compensation contracts decreases as the level of risk aversion increases. The contribution of this paper is twofold. First, we provide strong evidence of the relevance of incorporating risk aversion in executive compensation research. The results indicate that risk aversion has a significant effect on the use of performance measures, which suggests that future executive compensation research should therefore take the level of risk aversion into account. Second, the risk aversion proxies that we test are robust, simple, and can easily be measured using publicly available data. As a result, these proxies can be used in future accounting research other than in the executive compensation area, such as, research on earnings management, CEOs' financing and investment decisions, and voluntary disclosure issues.

Multiple Dimensions of Organizational Commitment: Implications for Future Accounting Research

Organizational commitment (OC) is a concept that seeks to capture the nature of the attachments formed by individuals to their employing organizations. Beginning with Porter et al. (1974), prior researchers have attempted to identify what factors influence the formation of OC in individuals and how OC (once formed) influences important organizational consequences. Recent research in the industrial/organizational psychology and organizational behavior literature has identified the existence of multiple dimensions of OC and found different relationships between these dimensions and important organizational consequences. However, with some isolated exceptions (Ketchand and Strawser 1998; Kalbers and Fogarty 1995; Caldwell et al. 1990), accounting research has examined only one dimension of OC. This manuscript summarizes previous research in the industrial/organizational psychology, organizational behavior, and particularly accounting literature regarding the identification of various dimensions and subdimensions of OC and the relationships of these dimensions and subdimensions with important antecedents, correlates, and consequences. In light of these findings, suggestions are provided for accounting researchers to evaluate: (1) the role of multiple dimensions of OC in influencing attachment to the organization, (2) how changes in the public accounting work environment affect the role of OC, and (3) how OC research can provide practical results for public accounting firms.

Strategy, organization and control: Some possibilities for accounting research

Over the last decade, the developing field of strategic management has led to a new vocabulary for discourse among management theorists. This paper traces out some of the implications raised for future accounting research. Initially the paper provides a brief overview of themes in strategy research Subsequently the paper discussed three possibilities for research at the interface between accounting and strategy. The first concerns the relationship between organizations' control systems and their strategies, the second concerns accounting systems and the process of strategic decision making, while the third concerns connections between control systems and the emergence of strategic change.