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ADVANCES IN MANAGEMENT ACCOUNTING

Series Page

ADVANCES IN MANAGEMENT ACCOUNTING

Series Editors:

Volumes 1–25 Marc J. Epstein and John Y. Lee

Volumes 26–27: Marc J. Epstein and Mary A. Malina

Recent Volumes:

Volumes 1–26: Advances in Management Accounting

Title Page

ADVANCES IN MANAGEMENT ACCOUNTING VOLUME 27

ADVANCES IN MANAGEMENT ACCOUNTING

EDITED BY

MARC J. EPSTEIN

Rice University (retired), USA

MARY A. MALINA

University of Colorado Denver, USA

United Kingdom – North America – Japan India – Malaysia – China

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Emerald Group Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2017

Copyright © 2017 Emerald Group Publishing Limited

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No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-78560-972-5

ISSN: 1474-7871 (Series)

List of Contributors

Editorial Board

• Shannon W. Anderson

  University of California Davis, USA

• Jacob G. Birnberg

  University of Pittsburgh, USA

• Jan Bouwens

  University of Amsterdam, The Netherlands

• Adriana Rejc Buhovac

  University of Ljubljana, Slovenia

• Clara X. Chen

  University of Illinois, USA

• Donald K. Clancy

  Texas Tech University, USA

• Srikant M. Datar

  Harvard University, USA

• Antonio Dávila

  University of Navarra, Spain

• Nabil S. Elias

  University of North Carolina, Charlotte, USA

• K. J. Euske

  Naval Postgraduate School, USA

• Eric G. Flamholtz

  University of California, Los Angeles, USA

• George J. Foster

  Stanford University, USA

• Dipankar Ghosh

  University of Oklahoma, USA

• Frank G. H. Hartmann

  Erasmus University, The Netherlands

• James W. Hesford

  Ecole hôtelière de Lausanne, Switzerland

• Robert Hutchinson

  Michigan Tech University, USA

• Larry N. Killough

  Virginia Polytechnic Institute, USA

• Leslie Kren

  University of Wisconsin, Milwaukee, USA

• Raef Lawson

  Institute of Management Accountants, USA

• Anne M. Lillis

  University of Melbourne, Australia

• Raj Mashruwala

  University of Calgary, Canada

• Ella Mae Matsumura

  University of Wisconsin, Madison, USA

• Neale O’Connor

  University of Hong Kong, Hong Kong

• Sean A Peffer

  University of Kentucky, USA

• Mina Pizzini

  Texas State University, USA

• Frederick W. Rankin

  Colorado State University, USA

• Karen L. Sedatole

  Michigan State University, USA

• Lourdes F. White

  University of Baltimore, USA

• Sally K. Widener

  Clemson University, USA

• Marc Wouters

  Karlsruhe Institute of Technology, Germany

AIMA Statement of Purpose

Advances in Management Accounting (AIMA) is a publication of quality applied research in management accounting. The journal’s purpose is to publish thought-provoking articles that advance knowledge in the management accounting discipline and are of interest to both academics and practitioners. The journal seeks thoughtful, well-developed articles on a variety of current topics in management accounting, broadly defined. All research methods including survey research, field tests, corporate case studies, experiments, meta-analyses, and modeling are welcome. Some speculative articles, research notes, critiques, and survey pieces will be included where appropriate.

Articles may range from purely empirical to purely theoretical, from practice-based applications to speculation on the development of new techniques and frameworks. Empirical articles must present sound research designs and well-explained execution. Theoretical arguments must present reasonable assumptions and logical development of ideas. All articles should include well-defined problems, concise presentations, and succinct conclusions that follow logically from the data.

Review Procedures

AIMA intends to provide authors with timely reviews clearly indicating the acceptance status of their manuscripts. The results of initial reviews normally will be reported to authors within eight weeks from the date the manuscript is received. The author will be expected to work with the Editor, who will act as a liaison between the author and the reviewers to resolve areas of concern. To ensure publication, it is the author’s responsibility to make necessary revisions in a timely and satisfactory manner.

Manuscript Form Guidelines

1. Manuscripts should include a cover page that indicates the author’s name and affiliation.

2. Manuscripts should include a separate lead page with a structured abstract (not to exceed 250 words) set out under four to seven sub-headings; purpose, design/methodology/approach, findings, research limitations/implications (if applicable), practical implications (if applicable), social implications(if applicable), and originality/value. Keywords should also be included. The author’s name and affiliation should not appear on the abstract.

3. Tables, figures, and exhibits should appear on a separate page. Each should be numbered and have a title.

4. In order to be assured of anonymous reviews, authors should not identify themselves directly or indirectly.

5. Manuscripts currently under review by other publications should not be submitted.

6. Authors should e-mail the manuscript in two WORD files to either of the editors. The first attachment should include the cover page and the second should exclude the cover page.

7. Inquiries concerning Advances in Management Accounting should be directed to either of the following editors:

Marc J. Epstein

epstein@rice.edu

Mary A. Malina

mary.malina@ucdenver.edu

Introduction

This volume of Advances in Management Accounting (AIMA) represents the diversity of management accounting topics, methods, and author affiliation that form the basic tenets of AIMA. Included are papers on traditional management accounting topics such as management control systems and performance measurement, as well as articles on broader topics of interest to management accountants such as decision rights and the gap between research and practice. The papers in this volume utilize a wide-variety of methods including archival data analysis, survey, experiment, and a thought piece. Finally, the diversity in authorship is apparent with affiliations from Argentina, Australia, Bulgaria, Canada, China, Kazakhstan, Poland, and the United States.

This volume begins with an archival study by Gong and Young that investigates the use of performance indicators in managing revenues in the motion picture industry. Research on the relevance of financial versus nonfinancial performance measures for decision making continues to be among mainstream debates in the management accounting literature. This study provides empirical evidence on the effect of opening box office revenue and peak rankings on the overall life cycle and video sales of motion pictures. While prior management accounting studies focus on product life cycle costing in manufacturing contexts, this is the first accounting study that directly assesses life cycle revenues in one of the creative industries.

The next paper by Coats and Rankin explores delegation of decision rights by designing an experiment to explore the superior’s choice between delegation and information elicitation. This novel experiment identifies systematic ways in which behavior deviates from economic theory. Their findings suggest that in addition to economic incentives, delegation creates strong behavioral motivation to gather information. Hence, at least in some cases, economic theory understates the positive effects of delegation on the subordinates’ incentives to gather decision-relevant information.

At the third AIMA World Conference on Management Accounting Research in May 2016, Eric Flamholtz presented a provocative plenary session. The third paper by Flamholtz et al. is the product of that plenary session. The paper proposes a revised paradigm for management accounting that serves as a catalyst for academics as well as practitioners to rethink and broaden the current paradigm of management accounting in order to be more relevant and useful. It describes several global applications of the proposed revised frameworks, methodologies, and tools presented as potential add-ons to management accounting. This paper is sure to challenge conventional thinking about management accounting.

The fourth paper by Alewine and Miller uses an experiment to study how to integrate environmental performance measures in the balanced scorecard framework. It addresses a relevant topic of measuring environmental performance from a management accounting perspective (as opposed to external reporting of environmental results), and focuses on particularly challenging questions regarding balanced scorecard presentation format and reputation effects. The study finds when positive past environmental performances exist, entities may choose to group environmental performance measures together in a fifth scorecard perspective without risking those measures receiving the discounted decision weight indicated in prior studies.

Tucker and Lawson compare and contrast practice-based perceptions of the research-practice gap in the United States with those in Australia. The authors use a survey and follow-up interviews to explore how practicing managerial accountants perceive the relevance of academic research. Results indicate the extent to which academic research informs practice is perceived to be limited, despite the potential for academic research findings to make a significant contribution to management accounting practice. Rather than following conventional approaches to ‘bridging the gap’ by identifying barriers to the adoption of research, the authors suggest that only after academics have adequate incentives to speak to practice can barriers to a more effective diffusion of their research findings be overcome.

The final paper by Berthelot and Morrill uses a survey to investigate drivers of management control systems adoption in the context of Canadian Small- and Medium-Sized Enterprises (SMEs). While the impact of organization and strategy on management control system adoption has been extensively studied within larger organizations, relatively few studies have been conducted on control systems in SMEs. They find that the presence of a professional accountant, which is a constraint unique to SMEs given their limited resources, is strongly associated with the adoption of management control systems and was a significant explanatory variable more often than either size or strategy.

We believe the six papers in this volume represent relevant, theoretically sound, and practical studies that can greatly benefit the management accounting discipline. They manifest our commitment to providing a high level of contribution to management accounting research and practice.

Marc J. Epstein

Mary A. Malina

Editors