Prelims

Half Title Page

ADVANCES IN MANAGEMENT ACCOUNTING

Series Page

ADVANCES IN MANAGEMENT ACCOUNTING

Series Editor: Chris Akroyd

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

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

• Volumes 28–30: Mary A. Malina

• Volume 31: Laurie L. Burney and Mary A. Malina

• Volume 32: Laurie L. Burney

• Volume 33: Chris Akroyd and Laurie L. Burney

• Volume 34: Chris Akroyd

• Volume 35: Chris Akroyd

Title Page

ADVANCES IN MANAGEMENT ACCOUNTING - VOLUME 36

ADVANCES IN MANAGEMENT ACCOUNTING

EDITED BY

CHRIS AKROYD

University of Canterbury, New Zealand

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

Copyright Page

Emerald Publishing Limited

Emerald Publishing, Floor 5, Northspring, 21-23 Wellington Street, Leeds LS1 4DL.

First edition 2024

Editorial matter and selection © 2024 Chris Akroyd.

Published under exclusive licence.

Individual chapters © 2024 Emerald Publishing Limited.

Reprints and permissions service

Contact: www.copyright.com

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: 978-1-83608-489-1 (Print)

ISBN: 978-1-83608-488-4 (Online)

ISBN: 978-1-83608-490-7 (Epub)

ISSN: 1474-7871 (Series)

Contents

LIST OF CONTRIBUTORS

ASSOCIATE EDITORS

• Kevin E. Dow

  The University of Texas at El Paso, USA

• Andrea R. Drake

  Louisiana Tech University, USA

• Jeffrey A. Wong

  University of Nevada, USA

EDITORIAL BOARD

• Shannon W. Anderson

  University of California Davis, USA

• Romana Autrey

  Willamette University, USA

• Jan Bouwens

  University of Amsterdam, The Netherlands

• Laurie L. Burney (Past Editor)

  Baylor University, USA

• Clara X. Chen

  University of Illinois, USA

• Martine Cools

  Katholieke Universiteit Leuven, Belgium

• Antonio Dávila

  University of Navarra, Spain

• Anderson Betti Frare

  Federal University of Rio de Janeiro, Brazil

• Joanna Golden

  The University of Memphis, USA

• Frank G. H. Hartmann

  Radboud University, The Netherlands

• James W. Hesford

  University of Missouri – St. Louis, USA

• Robert Hutchinson

  Michigan Tech University, USA

• Takaharu Kawai

  Doshisha University, Japan

• Anne M. Lillis

  University of Melbourne, Australia

• Mary A. Malina (Past Editor)

  University of Colorado at Denver, USA

• Raj Mashruwala

  University of Calgary, Canada

• Ella Mae Matsumura

  University of Wisconsin – Madison, USA

• Lasse Mertins

  Johns Hopkins University, USA

• Lorenzo Patelli

  University of Denver, USA

• Sean A. Peffer

  University of Kentucky, USA

• Matthew Peters

  University of Queensland, Australia

• Arthur Posch

  Universitat Bern, Switzerland

• Frederick W. Rankin

  Colorado State University, USA

• Karen L. Sedatole

  Emory University, USA

• Nicole Sutton

  University of Technology Sydney, Australia

• Basil Tucker

  University of South Australia, Australia

• Michael Turner

  University of Queensland, Australia

• Lourdes F. White

  University of Baltimore, USA

• Sally K. Widener

  Clemson University, USA

• Chaminda Wijethilake

  University of Essex, UK

• Marc Wouters

  Karlsruhe Institute of Technology, Germany

• Dimitri Yatsenko

  University of Wisconsin – Whitewater, USA

Statement of Purpose

Advances in Management Accounting is a publication of quality, theoretical, and 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, case studies, experiments, meta-analyses, and modelling are welcome. Some commentaries, research notes, and critiques 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 articles 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.

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 an abstract (not to exceed 250 words) and seven keywords.

3. The author’s name and affiliation should not appear on the abstract.

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

5. To be assured of anonymous reviews, authors should not identify themselves directly or indirectly.

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

7. Authors should email the manuscript in two WORD files to the editor. The first attachment should include the title page with author details and the second should exclude the title page.

8. Inquiries concerning Advances in Management Accounting should be directed to:

   • Chris Akroyd

   • at Advances.In.MA@Gmail.com

Introduction

This volume of Advances in Management Accounting (AIMA) presents a diversity of management accounting topics, methods, and author affiliations, which form the basic tenets of AIMA. Included are articles on management control systems, CEO compensation, employee inventive schemes, performance management, the delegation of decision rights, and managing cost reduction decisions. The articles in this volume employ a variety of methods from archival to experiments and surveys and a diversity in authorship with affiliations from Australia, Germany, Qatar, and the United States of America.

This volume begins with two articles that examine management accounting issues around compensation. Ekici and Ruseva’s study investigates the impact of stock liquidity on the design of CEO equity compensation. Their findings indicate that greater stock liquidity correlates with a higher allocation of stock awards in compensation packages. This suggests that stock liquidity, as an indicator of the informativeness of stock prices, plays a significant role in shaping CEO equity compensation strategies. Reichert’s article, on the other hand, analyses the effects of involving employees in self-assessing their performance as part of the compensation setting process on employer welfare. The evidence suggests that incorporating employee self-assessments into the compensation process tends to decrease employer welfare. This suggests that companies should disentangle employee performance assessments from the compensation setting process.

The third article by Chambers, Johnson, Fleischman, and Zheng examines how organisational culture and managerial tendencies towards communion affect decisions regarding discretionary labour cost cuts. The study finds that managers with a communal orientation are less likely to implement layoffs, and a cohesive organisational culture tends to mitigate layoffs in response to short-term sales declines. However, the protective effect of culture diminishes with prolonged sales downturns. These findings highlight how economic conditions, organisational dynamics, and managerial dispositions collectively influence decisions on the scope and nature of labour cost reductions during periods of declining sales.

The fourth article by Maske, Sohn, and Hirsch explores how manager narcissism and the framing of incentive schemes interact to influence employee effort. The authors discover that high levels of manager narcissism lead to reduced employee effort, whereas low levels increase it. This relationship is mediated by the employees’ feelings of envy towards the manager. Additionally, consistent with recent studies on the impact of management compensation structures, the research finds that when manager narcissism is high, a penalty-based contract further decreases employee effort.

The fifth article by Chong, Wang, and Monroe investigates the impact of delegation, moral justification, and ethical climate on misreporting within the financial services sector. They find that moral justification mediates the relationship between delegation and misreporting, indicating that delegation of decision rights indirectly increases misreporting by enhancing moral justification. Additionally, the study reveals that an ethical climate significantly moderates the influence of moral justification on misreporting. These insights are crucial for developing effective monitoring controls and de-biasing strategies to prevent misreporting by employees.

The sixth and final article by Ammar and Hassan explores the relationship between entrepreneurial cognitive styles and management control system (MCS) configurations within small- and medium-sized enterprises (SMEs). The authors identify three distinct cognitive styles – knowing, planning, and creativity – and five specific MCS configurations utilised by SMEs. Through their analysis, they reveal three significant associations between the identified cognitive styles and MCS configurations. This study highlights the intricate interplay between entrepreneurial cognitive styles and MCS configurations, underscoring their mutual dependence within the institutional framework of SMEs.

The six articles in Volume 36 represent relevant, theoretically sound, and practical studies that extend our knowledge within the management accounting discipline. These articles manifest the book’s commitment to providing a high level of contribution to management accounting research and practice.

Chris Akroyd

Editor