Ian R.C. Eggleton

Towards a comprehensive theoretical framework for voluntary IC disclosure

Purpose – This paper aims to construct a comprehensive theoretical framework for interpreting voluntary IC disclosure practices by organizations.Design/methodology/approach – Four most‐commonly used theories in the area, namely agency theory, stakeholder theory, signalling theory, and legitimacy theory, were integrated in terms of the interrelated concepts relating to voluntary IC disclosure.Findings – The constructed theoretical framework includes three concepts: to reduce information asymmetry; to discharge accountability to various stakeholders; and to signal organizational legitimacy and excellence (or superior quality) to society, which are seen as motivations for organizations to disclose their IC on a voluntary basis.Research limitations/implications – The framework ignores some other theoretical perspectives which are also relevant to voluntary IC disclosure; the framework is not justified by any empirical evidence.Originality/value – This research is the first attempt to construct a comprehensive...

The decision-facilitating role of management accounting systems on managerial performance: the influence of locus of control and task uncertainty.

This study examines the three-way interaction between task uncertainty, locus of control and management accounting systems (MAS) affecting managerial performance. MAS was defined in terms of the extent to which managers use broad scope MAS information for managerial decisions. The results of this study support a three-way interaction between task uncertainty, locus of control and management accounting systems affecting managerial performance. Specifically, under low task uncertainty situations, the results reveal that the use of more broad scope MAS information by “internal” managers is detrimental to their performance, while the extent of use of broad scope MAS information has no effect on the performance level of the “external” managers. In addition, the results reveal that “internal” managers who make more use of broad scope MAS information for managerial decisions under low task uncertainty performed less well than their “external” counterparts. In contrast, under high task uncertainty situations, the results suggest that “internal” managers improve their performance when they make more use of broad scope MAS information for managerial decisions, while “external” managers are insensitive to the degree of use of broad scope MAS information for managerial decisions. In addition, the results reveal that “internal” managers who make more use of broad scope MAS information for managerial decisions in high task uncertainty situations only marginally outperform their “external” counterparts. Contrary to our expectations, this difference is not statistically significant. The theoretical and practical contributions of our findings are discussed.

Fairness of performance evaluation procedures and job satisfaction: The role of outcome‐based and non‐outcome‐based effects

Abstract Prior management accounting studies on fairness perceptions have overlooked two important issues. First, no prior management accounting studies have investigated how procedural fairness, by itself, affects managers’ job satisfaction. Second, management accounting researchers have not demonstrated how conflicting theories on procedural fairness can be integrated and explained in a coherent manner. Our model proposes that fairness of procedures for performance evaluation affects job satisfaction through two distinct processes. The first is outcome‐ based through fairness of outcomes (distributive fairness). The second is non‐outcome‐based through trust in superior and organisational commitment. Based on a sample of 110 managers, the results indicate that while procedural fairness perceptions affect job satisfaction through both processes, the non‐outcome‐based process is much stronger than the outcome‐based process. These results may be used to develop a unified theory on procedural fairness effects.

The influence of information asymmetry and budget emphasis on the relationship between participation and slack

Abstract Propensity to create slack may be influenced by the subordinates ‘reactions to budgetary participation. Prior research indicates that subordinates react favourably to high budgetary participation when it serves some useful purposes for them. Participation may be useful to them in a low information asymmetry situation, when they do not have more information than their superiors, because it enables them to gain from an exchange of information with their superiors. It may also be useful to them in a high budget emphasis situation, when meeting budgeted targets is important, because it enables them to influence the levels of budget targets. Prospect theory suggests that subordinates who find participation useful may have a low propensity to create slack for fear of jeopardising their participation privileges. Hence, subordinates’ propensity to create slack is likely to be low when high participation is allowed in a low information asymmetry situation. When information asymmetry is high, propensity to create slack is also likely to be low when high participation is allowed in a high budget emphasis situation. The results, based on a sample of 103 manufacturing managers, provide support for these expectations.

The multiple roles of participative budgeting on job performance

Abstract This paper examines the multiple roles (i.e., cognitive, motivational and value attainment) of participative budgeting and the combined effects of these three roles on subordinates’ job performance. Specifically, this paper proposes that participative budgeting affects job performance via three intervening variables, namely role ambiguity, organizational commitment and job satisfaction. The responses of 74 senior-level managers, drawn from a cross-section of the Australian financial services sector, to a questionnaire survey were analyzed by using a path analytic technique. The results support the multiple roles of participative budgeting and the indirect effect of participative budgeting on subordinates’ job performance through role ambiguity, organizational commitment and job satisfaction.

Institutionalization of accrual accounting in the Indonesian public sector

Purpose – The purpose of this paper is to evaluate the institutionalization of an accrual accounting system in the Indonesian public sector.Design/methodology/approach – The authors undertake a case study to gain insights relating to the critical features of the institutionalization process of the accrual accounting system (AAS) in one Indonesian public sector municipality. The data are drawn from official documents of the Indonesian Government and from publicly available information about the accrual adoption processes. The authors also interviewed key actors who were involved in the accrual accounting policy formulation, standards development and implementation. The data under investigation cover the period from 1983 to 2010.Findings – The IPM of Dambrin, Lambert and Sponem is employed to evaluate the process by which an AAS was idealized, standardized, implemented and used in one Indonesian municipality. Scotts pillars of legitimization also inform rationales behind practice. This study reveals how th...

Indonesian public sector accounting reforms: dialogic aspirations a step too far?

Purpose - – Drawing from an interest in the changing Indonesian political and regulatory history, the purpose of this paper is to provide an understanding of the role that accounting reform can play in nurturing, or failing to nurture, a more dialogic form of accounting in a local Indonesian municipality. Design/methodology/approach - – To collect the data, the authors undertook a case study of a local municipality and drew from patterns found in Indonesia’s long colonial history. Data were acquired from official and publicly available documents and interviews with 29 key figures, including those involved in formulating and disseminating laws and also those affected by the accounting reforms from 1998 to 2009. Document collection and interviews were conducted at national and local levels. Findings - – This study shows that Indonesia has undertaken significant economic and political reforms for the intended purposes of fostering democracy, strengthening accountability, and creating transparency in relation to public sector practices. As part of these reforms, accrual accounting is now mandatory, independent audit is conducted, and disclosure is required by Government offices at central and local levels. Nonetheless, drawing from dialogic accounting principles, this study demonstrates the limitations of legislation and regulation in countering patterns that have long been laid down in history. Essentially, there is limited opportunity to question the elements of these reforms, and the study has also found that centralizing forces remain to serve vested interests. The root of the problem may lie in traditions of central control which have played out in how a dialogic form of accounting has failed to emerge from these important accounting reforms. Research limitations/implications - – The findings of this study should be understood from historical, political, and cultural backgrounds of the site of the study. Practical implications - – The implications of the findings should be taken into account by public sector policy makers, particularly in emerging economies – where political realities, economic, social, political, and cultural backgrounds set different historical patterns and result in unique circumstances that may tend to retain traditions of the past even under rules and regulations of the present. Originality/value - – A key contribution of this study is to show how the political traditions of a nation can permeate and divert the intent of, in this case, engaging a broader public in discourse about accounting reform in the public sector. In addition, this study also provides an understanding of public sector reform in the context of a diverse and unsettled nation which has been long subject to colonial, top-led, and military leadership. The findings demonstrate complexities and unintended outcomes that can emerge in public sector accounting reform and how, in this case, they appear to be influenced by historical traditions of centralized control.

The Effects of Value Attainment and Cognitive Roles of Budgetary Participation on Job Performance

This chapter examines the effects of the value attainment and cognitive roles of budgetary participation on job performance. A structural model consisting of variables such as budgetary participation, job-relevant information, job satisfaction, and job performance is proposed and tested using a survey questionnaire on 70 senior managers, drawn from a cross-section of the financial services sector. Their responses are analyzed using a structural equation modeling (SEM) technique. The results reveal that budgetary participation is positively associated with job-relevant information. These results lend support to the cognitive effect of budgetary participation, which suggests that subordinates participate in the budget setting process to share information. In addition, the results suggest that budgetary participation is positively associated with job satisfaction. These results support the value attainment role of budgetary participation, which increases subordinates’ levels of job satisfaction. Furthermore, the results reveal that there are positive relationships between job-relevant information and job satisfaction, job-relevant information and job performance, and job satisfaction and job performance.

Using Quality of Life to Assess Performance of Agencies Assisting People with Intellectual Disabilities

Performance measurement is important for agencies assisting people with intellectual disabilities in terms of measuring the efficiency and effectiveness of the agency’s service provision. In this chapter we argue that agencies that assist people with intellectual disabilities can use quality of life as one potential measure of performance. This is demonstrated with reference to research conducted by Kober (2006) on the effect of different methods of employment on the quality of life for people with intellectual disabilities. The performance of agencies and/or programs can be assessed based on comparisons of quality of life outcomes under different methods of employment.