Showing papers in "Accounting Organizations and Society in 1984"
TL;DR: In this paper, the relationships among an organization's environment, structure, and information system were investigated and it was found that information systems and organizational structures are both a function of the environment.
Abstract: The research reported in this study concerns the relationships among an organization's environment, structure and information system. Based on an empirical study it appears that information systems and organizational structures are both a function of the environment. However, after controlling for the effects of the environment, it does not appear that an organization's iinformation system and structure are significantly related to each other.
796 citations
TL;DR: In this article, the authors propose the Political Economy of Accounting (PEA) framework to understand and evaluate the functions of accounting within the context of the economic, social and political environment in which it operates.
Abstract: Existing research on the choice of accounting methods for corporate reports emphasizes private interests. In particular, shareholders' interests predominate in studies of the effects of accounting information on individual users. Attempts at assessing the social value of accounting reports, using the approach of marginal economics to information or the analysis of economic consequences also exhibit, in their execution, a pronounced shareholder orientation. This paper suggests that an alternative approach, the Political Economy of Accounting, may be fruitful. This approach seeks to understand and evaluate the functions of accounting within the context of the economic, social and political environment in which it operates. Research within this framework is identified as having normative, descriptive and critical qualities, and the paper concludes with some illustrations of potential research areas.
648 citations
TL;DR: This article found that superiors of business units with higher environmental uncertainty will use a more subjective performance appraisal approach whereas superiors of businesses with lower environmental uncertainty use a formula-based performance evaluation approach, and that a stronger fit between environmental uncertainty and performance evaluation style would be associated with higher business unit performance.
Abstract: Rooted in contingency theory, this study puts forth propositions stating (1) that superiors of business units which face higher environmental uncertainty will use a more subjective performance appraisal approach whereas superiors of business units which face lower environmental uncertainty will use a more formula-based performance evaluation approach, and (2) that a stronger fit between environmental uncertainty and performance evaluation style would be associated with higher business unit performance. Findings from 58 business units in eight Fortune 500 firms provide strong support to both sets of these propositions.
485 citations
TL;DR: In this article, the authors report the results of a study designed to test whether or not differences in approaches to budgeting at the departmental level are systematically related to differences in production technologies, market factors and organizational characteristics.
Abstract: This paper reports the results of a study designed to test whether or not differences in approaches to budgeting at the departmental level are systematically related to differences in production technologies, market factors and organizational characteristics. The results suggest that budgeting is related to departmental size, functional differentiation and degree of automation of production processes, but not the products' stage in the product life cycle or the company's strength of market position.
319 citations
TL;DR: In this article, the authors present a view of corporate social responsibility accounting and reporting from the standpoint of a developing country, based on a personal interview questionnaire survey conducted by the authors with mainly chief executive officers in one hundred companies operating in Malaysia.
Abstract: This paper presents a view of corporate social responsibility accounting and reporting from the standpoint of a developing country. The study is based on a personal interview questionnaire survey conducted by the authors with mainly chief executive officers in one hundred companies operating in Malaysia. Various aspects of corporate social performance, including social reporting, are examined. The findings indicate that social reporting lags behind corporate social involvement and that major corporate attention is focused on activities relating to employees and products/services. In addition, the results show that corporate size and national origin of corporate ownership are relevant in reflecting the extent of social commitments made by companies.
287 citations
TL;DR: In this article, the response of those affected by financial accounting standards to new accounting rules is described collectively as lobbying, and the efforts of individuals and organizations to promote or obstruct such rules are described as lobbying.
Abstract: This paper examines the response of those affected by financial accounting standards to new accounting rules. The efforts of individuals and organizations to promote or obstruct such rules are described collectively as lobbying. The Downsian voting model provides the framework for the discussion of important aspects of lobbying, namely the characteristics of lobbyists, the timing of their lobbying and the methods they are likely to employ. The analysis is illustrated with examples drawn from U.K. and U.S. experience of standard-setting.
262 citations
TL;DR: In this article, the authors examined the relationship between professionalism, organizational commitment and job satisfaction in an organization setting involving several field offices of a “Big Eight” U.S. accounting firm.
Abstract: With growth in the number of professionals employed in organizations, concern has been expressed over potential conflict between the professionalism of these employees and their commitment to the organization. Empirical studies examining the relationships between professionalism, organizational commitment and job satisfaction have reported inconsistent results. This paper examines these variables in an organization setting involving several field offices of a “Big Eight” U.S. accounting firm. Accountants who reported high levels of professionalism also reported high levels of organizational commitment. Additionally, both professionalism and organizational commitment were strongly related to job satisfaction.
132 citations
TL;DR: The authors empirically examined an organizational control framework in research and development (R/D) settings and found that the importance of controls is associated with knowledge of the task transformation process (technological uncertainty) but not with measurability of the work group's outputs, task complexity or task dependence.
Abstract: This paper empirically examines an organizational control framework in research and development (R/D) settings. Data were collected from 76 R/D work group leaders. Analysis of the data indicates that the importance of controls is associated with knowledge of the task transformation process (technological uncertainty) but not with measurability of the work group's outputs, task complexity or task dependence. It is suggested that the results of this and other research indicate the need for a more complete theoretical framework as well as attention to measurement issues.
127 citations
TL;DR: In this article, the authors reviewed the learning and cognitive psychological literature pertinent to the questions of how and how well the "ordinary person" learns from experience and related the conclusions from this literature to the case of the professional auditor.
Abstract: There has been little systematic study of the cognitive processes by which auditors learn from experience. The purpose of this paper is (1) to review selectively the learning and cognitive psychological literature pertinent to the questions of how and how well the “ordinary person” learns from experience and (2) to relate the conclusions from this literature to the case of the professional auditor. The paper also identifies some questions and methods for future behavioral research regarding the auditor and learning from experience.
122 citations
TL;DR: A review of literature from psychology, marketing and artificial intelligence is used to develop a series of significant research areas to increase accountants' understanding of the roles that attention and memory have in the human processing of accounting information as discussed by the authors.
Abstract: Behavioral research in accounting has ignored the concepts of attention and memory which are crucial both to the development of a complete understanding of how accounting information is processed by humans and to the interpretation of existing research. In this paper, a review of literature from psychology, marketing and artificial intelligence is used to develop a series of significant research areas to increase accountants' understanding of the roles that attention and memory have in the human processing of accounting information.
79 citations
TL;DR: This study compares the decision making processes of exper ts and novices in the context of a financial analysis task, using a pro tocol analysis, or process tracing methodology, which has successfully been used in task domains such as physics and medicine.
Abstract: Considerable effort is spent each year teaching students (novices) how to use accounting information, and how to make financial decisions. However, very little is object ively known about what differentiates exper t from novice decision making. This study compares the decision making processes of exper ts and novices in the context of a financial analysis task. It employs and extends a pro tocol analysis, or process tracing methodology, which has successfully been used in task domains such as physics and medicine The focus of the study is on detai led decision making behavior, thereby identifying the specific strategies and processes that are used by the exper t and the novice. The specific data collect ion approach used in the exper iment involved asking decision makers to verbalize during their financial analysis, and tape-recording their verbalizations. The resulting transcripts, called concurrent or thinking-aloud protocols, provide the data for the pro tocol analysis.
TL;DR: In this paper, the authors examined the ability of McClelland's trichotomy of needs theory to provide a conceptual explanation of the job satisfaction and work performance of CPA firm professionals.
Abstract: This paper examines the ability of McClelland's trichotomy of needs theory (need for affiliation, need for power, need for achievement) to provide a conceptual explanation of the job satisfaction and work performance of CPA firm professionals. Seventy-seven of the 89 professionals at an office of a large international CPA firm participated in the study. For partners and managers, need for affiliation correlated negatively with job satisfaction. For partners and managers, junior-level audit/tax specialists and junior-level management consultants, need for power correlated positively with job satisfaction. Job satisfaction correlated positively with the intent to remain with their current firm for all three categories. Need for achievement correlated positively with hours devoted to work for junior-level audit/tax specialists, and with the firm's work performance ratings for partners and managers and junior-level audit/tax specialists. The results suggest that McClelland's theory, which has not been previously applied to examine job satisfaction, might provide a conceptual explanation of why some individuals experience relatively high job satisfaction in an environment where their contemporaries experience relatively low job satisfaction.
TL;DR: In this article, the authors trace the information search behavior of eleven financial analysts involved in assessing the earning power of five companies and find that two search strategies (problem spaces) partially explained the subject's final choice of the company with the greatest earning power.
Abstract: Verbal protocol analysis was used to trace the information search behavior of eleven financial analysts involved in assessing the earning power of five companies. The information available was ten years' data from the three primary financial statements. Two search strategies (problem spaces) were used by the subjects. These two strategies partially explained the subject's final choice of the company with the greatest earning power. The subjects revealed considerable similarily on the amount and type of information searched. Discussion of results included implications for future research.
TL;DR: This paper examined the literature on financial reporting to employees between 1919 and 1979 and found that the level of publication interest has varied widely during the period as has the relative interest of accountant and non-accountant groups.
Abstract: This paper examines the literature on financial reporting to employees between 1919 and 1979. It finds that the level of publication interest has varied widely during the period as has the relative interest of accountant and non-accountant groups. Periods of heightened publication activity appear to repeatedly coexist with four major socioeconomic factors, and arguments that this coexistence is not coincidental are considered. Finally it is noted that the same reporting to employee issues are frequently recalled and re-examined; possible reasons for this are considered.
TL;DR: In this article, the authors scrutinize the mode of reasoning employed by Benston and pinpoints a number of deficiencies, questioning the appropriateness of the perspective adopted and revealing the normative issues involved.
Abstract: This paper comments upon Benston's analysis (Accounting, Organizations and Society, 1982, pp. 87–105) of corporate social accounting and reporting. It scrutinizes the mode of reasoning employed by Benston and pinpoints a number of deficiencies. Furthermore, it challenges the very framework of the analysis, questioning the appropriateness of the perspective adopted and revealing the normative issues involved. Our comments attempt to indicate that the value premises implicit in Benston's analysis are not the only ones possible or acceptable.
TL;DR: In this article, the authors examined two essential processes of performance appraisal systems in international CPA firms: the first concerns the determination of overall evaluations while the second pertains to the interpersonal characteristics of the feedback meeting.
Abstract: This study examines two essential processes of performance appraisal systems in international CPA firms. The first concerns the determination of overall evaluations while the second pertains to the interpersonal characteristics of the feedback meeting. Evaluation strategies of managers and seniors were modeled and weighting schemes compared, the extent of intersubject agreement analyzed, and the impact of leadership style on weighting strategies investigated. In addition, the association between five performance feedback characteristics and three measures of effective feedback meetings were examined. The results revealed similar weighting schemes between managers and seniors in the aggregate, but differences among individual rater strategies. Leadership style affected decision strategies utilized. While perceived feedback characteristics such as supportive appraisal behavior and invitation to participate were significantly related to satisfaction with the review meetings and satisfaction with the managers, they were viewed to have less or no relation with improved job performance by seniors. Specific job criticism was found to be correlated with the seniors' views that feedback meetings affect performance.
TL;DR: In this article, the authors compared changes in the product pricing decisions of individuals and small groups in response to a fully disclosed, cosmetic change in depreciation method, and found that neither individuals nor groups fully adjust for the change.
Abstract: This study tests the functional fixation hypothesis by comparing changes in the product pricing decisions of individuals and small groups in response to a fully disclosed, cosmetic change in depreciation method. The study provides several methodological refinements over earlier related studies. The research design incorporates full disclosure of the effect of accounting differences and a variety of measures are used to assess the impact of the accounting change, these revealing the inadequacy of the aggregate measures employed in earlier studies. Furthermore, the paper includes a comparison of the quality of group versus individual decision making with respect to functional fixation. The findings indicate that while individuals have a more pronounced shift in decision models than do groups, neither individuals nor groups fully adjust for the change.
TL;DR: In this paper, the authors use principal-agent theory to hypothesize the need for complementary control systems for monitoring and verifying inter-manager relationships in large U.S. firms, and 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.
Abstract: 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.
TL;DR: In this paper, the authors examined the role of information disclosure in the development of both management industrial relations and domestic trade union strategies involving the use of information at site and company level.
Abstract: In the light of recent empirical work, this paper examines the place of information disclosure in the development of both management industrial relations strategies and domestic trade union strategies involving the use of information at site and company level. The need to link information to specific issues, and the importance for both management and trade unions of institutional development, are then considered and illustrated in relation to some of the issues that emerged during the period of study. Finally, taking account of the research findings, some suggestions are put forward for the development of the ACAS Code of Practice on Disclosure of Information.
TL;DR: In this paper, the authors explored the effects of auditor background on internal accounting control judgements and found that background variables were associated with differences in auditor ratings and posit reasonable explanations for any differences detected.
Abstract: This study is an exploration of the effects of auditor background on internal accounting control judgements. A series of control evaluation cases were mailed to experienced auditors. These subjects were asked to rate the described control systems against three control objectives. No hypotheses were tested. Rather, the objectives of the study reported here were (1) to determine which, if any, background variables were associated with differences in auditor ratings and (2) to posit reasonable explanations, grounded in actual data, for any differences detected. Such differences were found for subjects grouped according to firm affiliation, auditor rank/years of experience, and control evaluation experience. These differences are discussed and related to several possible explanations, which focus on learning and goal orientation effects in decision making. The explanations are viewed as potential topics for further research.
TL;DR: In this article, the usefulness of the information was measured in descriptive terms as the use of that information to make a specific loan decision, and the results of the analyses were reported in a modified format.
Abstract: This paper discusses a research project designed to collect evidence related to the “Little GAAP” controversy which the FASB and AICPA are currently examining. A protocol analysis methodology was used to collect and analyze data about the usefulness to bank loan officers of four types of financial statement information for smaller, closely held companies: earnings per share, deferred income taxes, capitalized leases, and inflation adjusted information. The usefulness of the information was measured in descriptive terms as the use of that information to make a specific loan decision. An effort was made to use analytical procedures similar to those in previous studies in the area so as to maximize comparability. However, the results of the analyses were reported in a modified format. The new format provides additional information and increases the objectivity of the results.
TL;DR: In this article, the authors report the results of a laboratory experiment designed to evaluate the usefulness of applying Human Resources Accounting (HRA) to the problem of labour turnover management decision making.
Abstract: This paper reports the results of a laboratory experiment designed to evaluate the usefulness of applying Human Resources Accounting (HRA) to the problem of labour turnover management decision making in a sample of Australian accounting firms. Useful was defined as a reduction in uncertainty and an increase in relevance and sufficiency. Using a pretest-post-test research design, 57 volunteer accountants responsible for personnel decisions were individually administered (1) a two-part pilot tested case study with and without Human Resources Turnover Costs (HRTC); (2) a questionnaire which measured subjects' response to levels of uncertainty, relevance and sufficiency of the information. Three specific hypotheses tested warranted the conclusion that HRTC information significantly reduced accountants' levels of uncertainty and increased their levels of relevance and sufficiency.
TL;DR: In this article, the authors discuss the relevance of cognitive science to decision-making research in accounting and discuss the implications for future research as well as a discussion of methodological issues which must be addressed.
Abstract: The purpose of this paper is to discuss the relevance of cognitive science to decision-making research in accounting. First, the context into which it interfaces the field of accounting is reviewed. Next, the cognitive science applications to accounting are presented and evaluated as they relate to four levels of investigation. The paper concludes with implications for future research as well as a discussion of methodological issues which must be addressed.
TL;DR: In this paper, a model is developed based on group polarization research which demonstrates that the participative process that is supposed to increase motivation may generate decisions that are opposed to the integrative aspect of budgeting in a subsystematic environment.
Abstract: Potential benefits derived from participative budgeting may be unattainable if employed in certain group configurations. A model is developed based on group polarization research which demonstrates that the participative process that is supposed to increase motivation may generate decisions that are opposed to the integrative aspect of budgeting in a subsystematic environment. A laboratory experiment manipulating information/leadership tests the model's validity. Results indicate a polarization in attitude, while information/leadership affect the direction and strength of polarization.
TL;DR: In this paper, the authors extend their analysis with respect to dynamic and interactive aspects of components of the system of negotiations and conclude that the disclosure decision must necessarily be considered in a strategic context, as part of the setting by top management of an overall information policy for the organisation.
Abstract: Disclosure of organisational information to trade union negotiators was recently identified as a contingency decision on the part of management by J.A. Craft. Here we extend his analysis with respect to dynamic and interactive aspects of components of the system of negotiations. A principal conclusion is that the disclosure decision must necessarily be considered in a strategic context, as part of the setting by top management of an overall information policy for the organisation.
TL;DR: The results of an empirical study suggested that organizations could use certain strategies to lessen the likelihood of an unsuccessful implementation of ZBB resulting from information processing requirements exceeding information processing capacity.
Abstract: The objective of this study was to develop specific strategies that could be used to ease the implementation of a zero base budgeting (ZBB) information system. Drawing from the organizational design literature, a model was constructed to test a hypothesis concerning the relationship between several coping strategies and the information imbalance an organization may experience with ZBB. The results of an empirical study suggested that organizations could use certain strategies to lessen the likelihood of an unsuccessful implementation of ZBB resulting from information processing requirements exceeding information processing capacity.
TL;DR: In this paper, the authors measured the demand for information in performance reports and found that there is a moderate but varying level of convergence among six behavioral measures of demand and a low level of demand consensus.
Abstract: Accountants are concerned with what information decision makers demand to solve problems. The research reported in this paper measures the demand for information in performance reports. The measurements are obtained by a method developed by psychologists to measure the cognitive processing of information. The evidence indicates that there is a moderate but varying level of convergence among six behavioral measures of demand and that there is a low level of demand consensus. Finally, limitations and implications of the evidence are presented.
TL;DR: In this article, the authors investigated the product differentiation factors that major referees use in referring CPA's to small business and found that the referees most value good working relationships and technical competence.
Abstract: This study investigates the product differentiation factors that major referees use in referring CPA's to small business. Two methodological approaches are developed. The first is a systematic method of cue determination. The second examines the convergence of different judgments to test the external validity of single-system lens model results. The results show that the referees most value good working relationships and technical competence.