Clive Emmanuel

Accounting for management control

While the limitations of the contingency approach are recognized, it seems heroic to assume that a single accounting information system will work equally well in all types of companies. We have identified one contingent variable — the incidence of non-programmed decision making — as a potentially significant influence in the design of accounting information systems. Within an organizational theory perspective, the multidivisional company was chosen to exemplify the difficulties of applying conventional accounting systems because of the high incidence of non-programmed decision making. Whether or not the conventional system can be modified or requires replacement is our concern in this chapter.

Multinational companies performance measurement systems: international perspectives

The exercise of control within multinational companies remains largely unknown and yet, national studies now and in the future may be significantly influenced by the mechanisms which parent companies require their subsidiaries to adopt. Central to the process of control is likely to be the performance measurements system. This study of 15 multinational companies reports the design features of control systems by concentrating on the association between performance measurement and corporate objectives, managerial responsibilities and incentives. The initial findings indicate considerable diversity within and between enterprises which have head offices located in different countries.

Readings in accounting for management control

Part 1: The context of management accounting. Part 2: Accounting for programmed decisions. Part 3: Accounting for non-programmed activities. Part 4: A framework for analysis.

Diverging views on the boundaries of management accounting

This paper attempts to quantify the apparent existence of the frequently cited gap between academic research and practice in management accounting. Statistically significant results reveal that practitioners attach greater importance to technical issues whilst academic researchers regard organizational and societal issues as more important. Possible bridgeheads to reduce the extent of the gap are discussed.

Towards a better understanding of capital investment decisions

Purpose – The purpose of this paper is to examine the capital investment process, guided by concepts from cognitive and social psychology. The intention is to gauge the extent to which managerial judgement can be detected by applying a psychological lens to the process. Initial fieldwork is subsequently reported on the extent to which managerial judgement is managed. Discovery of variations suggest an alternative perspective on understanding capital investment decisions (CIDs) that may be potentially worthwhile in understanding the long‐term success and survival of modern commercial enterprises.Design/methodology/approach – Following a systematic review, employing the psychological concepts of heuristics, framing and concensus to prior case and fieldwork studies, the CID process in three companies engaged in new market/site development projects is reported. The participants initially responded to a survey and subsequently agreed to be interviewed about their processes and involvement.Findings – The psycho...

Segmental Disclosure Practice: Thirteen Years On

Abstract In an age of financial disclosure directed by professional standards, the changes in practice voluntarily undertaken by companies are sometimes difficult to detect. By focusing on a period prior to the introduction of SSAP 25, the segmental disclosure issue offers an opportunity to consider whether practice has voluntarily changed. An examination of the extent and quality of segmental disclosure, for a specific group of companies over an extended period, offers an indication of the need for a standard or further regulation. If it can be demonstrated that disclosure practice has improved under a primarily self-regulatory framework, the need for a standard like SSAP 25 may be questioned. The segmental disclosure practices of the same group of seventy companies are compared for the reporting years 1975–6 and 1988–9. Whilst an underlying improvement in respect to business activity disclosure is revealed, the same cannot be claimed for geographic segmental disclosure. Not only has the number of compan...

On the Relevance and Comparability of Segmental Data

The recent adoption in the U.S.A. and Canada of the management approach to identify reportable segments places relevance of the disclosed segmental data as the overriding concern over comparability. This study investigates whether relevance and comparability are mutually exclusive or can be simultaneously achieved in segmental disclosure. It is explicitly recognized that both properties are a joint function of segment performance and segment identification, the performance–identification conundrum. By using a data set drawn from the U.K., a jurisdiction that explicitly allows directors’ discretion when identifying reportable segments, and a series of tests which remove performance differences, the potential impact of segment identification on the relevance/comparability issue is highlighted. The results of the tests reveal that for a significant portion of the sample the levels of both relevance and comparability are simultaneously low due to the segment identification choices made. These choices appear to match the possible outcomes of following the management approach to identification.By implication, the adoption of the management approach may lead to reduced comparability and relevance in some cases.

Transfer Pricing: The Implications of Fiscal Compliance

In modern-day commercial enterprises, complex inter-relationships between sub-units are commonplace. Many of these relationships are subjected to or reflected by transfer prices that traditionally contribute to the economic co-ordination or optimisation and performance measurement of the affiliated sub-units. When trades cross national boundaries, there is also an opportunity for multinational enterprises to optimise global after-tax profit. From the mid 1990s, however, fiscal regulators have strengthened requirements to the extent that transfer pricing tax compliance becomes a potential alternative strategy. A review of the regulatory framework raises questions for the existing theory and practice not least in terms of the implications of adopting a tax-compliant strategy on the design of management control systems.

International transfer pricing: searching for patterns

International transfer pricing is pervasive in that it can apply to all manner of goods, services, finance and intangible assets which flow between members of a group located in different parts of the world. Fiscal authorities in many countries are modernising their legislation to ensure they collect a fair amount of corporate tax revenue from companies operating within their jurisdiction. However, draconian tax rules may adversely affect world trade and reduce foreign direct investment. Jamie Elliott and Clive Emmanuel report on an exploratory fieldwork study of 12 multinational enterprises based in the UK which attempts to place current practices of international transfer pricing in the organisational and fiscal context. One emerging pattern appears to associate industry sector affiliation with preferred transfer pricing method.

Accounting education in Russia today

The West has not perhaps appreciated the role of the command or planned economy on the provision of education. The extent and detail of that involvement is first reviewed in respect to accounting education. The changes which are already under way are described and future trends in which Western academics may participate are outlined. Russia and the rest of the former Soviet Union (FSU) is in the process of changing a well-established, clear structure of education for a less rigid but more idiosyncratic approach. Accountants and accounting educators in other countries should be aware of the history and emerging structures in Russia and the FSU if their involvement is to be worthwhile.