Comprehensive Review: Accounting Theory and Current Issues

This essay provides a comprehensive overview of accounting theory and current issues, focusing on management accounting and structured literature reviews (SLR). It analyzes two journals to identify relevant theories and prevalent issues in accounting practices, particularly within Australian and German contexts. The study examines the research-practice gap in management accounting, highlighting differences and similarities between Australia and Germany, and explores the role of SLR in enhancing financial accountability and resolving conflicts within organizations. The essay also discusses the implications of various factors, such as academic research, diffusion barriers, and the effectiveness of accounting management, on organizational performance. It concludes that financial theories and practices, including SLR and accounting management, are crucial for addressing accountability issues in Australian firms.

Running head: ACCOUNTING THEORY AND CURRENT ISSUES
Accounting Theory and Current Issues
Student Number
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ACCOUNTING THEORY AND CURRENT ISSUES
Table of Contents
Introduction...............................................................................................................................3
Reasons for Journal selection....................................................................................................3
Research Questions of Selected Journal....................................................................................5
Major Implications within the Research Findings......................................................................5
Conclusion................................................................................................................................12
References................................................................................................................................13
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Introduction
This study intends to reflect a brief discussion regarding the theory of accounting and the
current issues that are prevalent in accounting. In this context, accounting is a process of
measure, wherein the higher authorities of an organization focus on determining the
organizational profit, loss, expenditure, income, liabilities, asset, debtors, and creditors
among others. Thus, based on this process of measuring, an organization focuses on the
development of its performance within its market (Tsamenyi, Cullen, & Gonzalez, 2006). On
the other hand, certain issues also initiate regarding this process of measuring. Hence, two
journals have been selected for the study. This includes “Same play, different actors?
Comparing the research-practice gap in management accounting in Australia and Germany”
and “On the shoulders of giants: undertaking a structured literature review in accounting”.
By analyzing these journals, potential theory related to the accounting and current issues
have been recognized.
Reasons for Journal selection
In order to conduct this study, both journals have been selected based on the accounting
along with its issues. The case first journal “Same Play, Different Actors? Comparing the
Research-Practice Gap in Management Accounting in Australia and Germany” focuses on
management accounting. This type of accounting is considered to be one of the major
operational activities within an organization. This is due to the fact that without proper
management of accounting, an organization is not able to measure its adequate profit or
loss within the market (Wiesel, Modell, & Moll, 2011). At the same time, management of
accounting helps an organization to avoid major accounting issues, which are conducted by
the organizational individuals. Hence, it can be considered as a first reason behind the
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selecting afore-mentioned journal. This particular journal majorly focuses on management
accounting and its implications within an organization in order to mitigate issues related to
the accounting (Broadbent & Guthrie, 2008).
In case of the second journal, “On the Shoulders of Giants: Undertaking a Structured
Literature Review in Accounting” has been selected to identify an adequate theoretical
review of the accounting as well as its issues. Theory of accounting plays a major role within
an organization, as it provides an appropriate path of accountability. In addition, the entire
accounting system of an organization is based on the day to day transactions. Hence, the
theory of accounting helps the financial experts for segmenting information relating to
organizational transactions in a decent manner. By implementing and following the theory
of accounting an organization can help in mitigating any difficulties within the operating
market. Thus, due to owing to this reason, the aforementioned journal has been selected to
develop this study. Appropriate or structured literature research can assist in maintaining
internal activities of the organizations in Australia (Brüggen, Vergauwen, & Dao, 2009).
Overall, accounting management along with structured research of accounting can aid an
organization to achieve market goals. Apart from this, both journals have reflected different
outcomes of accounting. At the same time, the journal also focuses on the management of
accounting along with the accounting literature. Simultaneously, major factors regarding
accounting along with its practice such as auditing, financial diffusion, the traditional
accounting system, and its implications have been possible for identifying these journals.
Therefore, this afore-mentioned reason can be considered as the third reason behind the
selection of these journals for this study (Isik, Dogru & Turk, 2018).
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Research Questions of Selected Journal
In the case of the first journal, the researcher has implied quantitative research approach.
Research has been focusing on the diffusion of innovation. Hence, a survey has been
conducted among 33 respondents, wherein certain questionnaires have been asked relating
to the Australian and German accounting standards along with bodies. This article thus
focuses on the management of accounting, which has been implemented by the Australian
and German accounting bodies, which is also the main research question of the study. Based
on this research, survey questions have been segmented into four parts, which includes
accounting literature, the translation stage, the dissemination stage, and areas of inquiry.
The final section of the questionnaire has been used for a personal interview (Migacz, Zou &
Petrick, 2018).
In case of the second journal, the authors Maurizio Massaro, John Dumay, and James
Guthrie have considered both qualitative as well as a quantitative research method.
Through this research, they have identified the structured literature review in accounting or
SLR. The key question focuses on the ways through which accounting literatures have been
helping organizations to develop accountability. In order to conduct the research, the
authors are analyzing various peer-reviewed journals along with books. At the same time,
the logic behind the SLR using within an organization also has been developed through the
research.
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Major Implications within the Research Findings
Through the analysis of the first journal, the authors namely Dr. Basil Tucker and Professor
Dr. Stefan Schaltegger have taken certain assumptions regarding the accountability gap
between Australia and Germany. The finding of this gap has been shown below:
Item Range*
Minimum Maximum Mean Standard Deviation
Actvities of Accounting Mangement Aust Ger Aust Ger Aust Ger Aust Ger
Academic research from management accounting is removed 2 1 5 5 4.17 4.36 1.12 1.08
Academic research needs to comply practices 1 3 5 5 4.42 4.13 1.22 0.68
Academic research is highly dependent on accounting practices 1 1 4 3 1.27 1.14 0.98 0.54
Practice needs to consider findings obtained from research 2 3 5 5 4.44 4.49 0.89 0.81
Findings from academic research is not considered 1 1 5 5 2.79 2.71 1.23 1.07
5= strongly agree and 1= strongly disagree
Table1: Existence of Gap
(Source: Massaro, Dumay & Guthrie, 2016)
On the basis of the above Table 1 above, it has been identified that the Australian
organizations are observed to be less strongly disagree. On the other hand, Germany
disagreed that there are many factors of accounting gap. At the same time, most of the
respondents of both Australia and Germany have agreed that there are significant factors of
the gap. Through the calculation of minimum and maximum range of each of the factors,
mean value of Australia as well as Germany has been identified as 1.4 and 1.8 at a minimum
level. On the other hand, max means the value of both Australia and Germany are
calculated to be 4.8 and 4.6. The calculation has been shown below in Table 2:
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Table 2: Mean Value of Both country in Minimum and Maximum Range
Based on the above Table 2, it can be stated that academic research in the domain of
accounting management has been removed from practice. Thus, academic research should
be based upon practices and needs to consider the overall findings. Contextually, the
findings from the academic research have not strongly affected Germany as compared to
Australia. This is due to the fact that the standard error of Germany is 0.4 in comparison
with 0.2 in Australia. Based on this observation, it can be stated that the management of
accounting has greatly influenced the organization in case of accounting (Tucker &
Schaltegger, 2016).
On the other hand, four aspects of management of accounting have been identified through
the research, which includes discovery, dissemination, change, and translation. In this case,
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reasonable changes and similarities have been observed. At the same time, the barriers of
diffusion have also been observed through the research. Identified factors have shown
below Table 3.
Table 3: Barriers of Diffusion in Management Accounting of Australia and Germany
Based on the above Table 3, it can be observed discovery and change are calculated to be
0.59(S.D), 3.46(Mean) and 0.47(S.D), 3.95(Mean) respectively. On the other hand,
translation and dissemination have been calculated as 0.51(S.D) and 4.26 (Mean) for
Australia. On a similar note, 0.39(S.D) 4.48 (Mean) in Australia. Simultaneously, Germany
has calculated as (S.D) 0.59, 0.46, 0.63, and 0.49 as well as (Mean) 4.21, 4.39, 3.23, and 3.27
respectively. On the basis of these observations, it can be stated that the discovery has a
reasonable impact on the management of accounting, whereas the other three aspects have
a high impact upon an organization regarding acceptability (Vendrzyk, 2018). Based upon
the above situation, the mean value of all the calculated variable has been calculated in the
below Table 4. This table will help to identify the impact of accountability in the Australian
firms. The calculation has reflected below Table 4:
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Table 4: German and Australian Authorities overcoming Research-Practice Gap
From the above Table 4, it has been identified that the Australian firms are performing
better in respect to German firms. Hence, the management of accounting is playing an
effective role in Australian firms along with their business operation (Tucker & Schaltegger,
2016). Thus, with respect to the second journal, the authors namely Maurizio Massaro, John
Dumay, and James Guthrie have conducted a structured literature review, whereas they
have examined various books as well as journals through the research (Tsamenyi, Cullen &
Gonzalez, 2006). At the same time, a basic protocol of SLR within an organization has been
elaborated. This protocol has been depicted in the below Figure 1:
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Figure 1: structured Literature Review’s Protocol
Through an overview of the above Figure 1, it has been identified that the there are ten
basic steps, which lead the entire protocol of the SLR. Fundamentally, this process of SLR is
acquiring each aspect of research such as journal, articles, Coder Triangulation, Code papers
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(QDAS and NVivo), and scope. Hence, through the process of SLR, an organization can be
made aware regarding the potential issues relating to accounting (De Villiers & Dumay,
2013). Based on the entire research, certain issues of accounting include improper
budgeting, lack of auditing, unskilled financial employees, and whistleblowing before the
time among others. These can affect the operations of the organization reasonably. Thus,
due to these reasons, SLR is helping to overcome the issues in a decent manner. By
implementing appropriate SLR technique, an organization can easily develop its financial
efficiency and effectiveness. Apart from this, the research also reflects different scenario
relating to accountability changes through SLR (Flower, 2015).
Table 5: Auditors and Client Conflict Resolution Changes
Source: (Massaro, Dumay & Guthrie, 2016)
Based on the above Table 5, it has been identified that 296 conflicts between clients and
auditors were observed in 2001, which has been reduced to 14 in 2012. Hence,
approximately 95% of conflicts have been reduced over the time period from 2001 to 2012.
Only SLR is responsible for this type of development within the Australian firms. Through
the qualitative research of the study, it has been identified that the SLR is reflecting in a
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different way. In addition, SLR is developing and creating knowledge ground, whereas the
organization is developing its financial implications. At the same time, researchers have
stated that SLR has been establishing a new journey for an organization. Through this, an
organization is resolving internal issues related to the accountability (Chenhall & Smith,
2011).
Conclusion
From the study, it has been identified that the financial theories and its implication plays a
major role within the Australian organizations. Thus, it can further be inferred that the
process SLR and accounting management along with organization are facing issues and
internal problems regarding the accountability and its implications within the Australian
firms.
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References
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Brüggen, A., Vergauwen, P. & Dao, M. 2009, ‘Determinants of intellectual capital disclosure:
evidence from Australia’, Management Decision, Vol. 47 No. 2, pp. 233-245.
Chenhall, R.H. & Smith, D.J. 2011, ‘A review of Australian management accounting research:
1980-2009’, Accounting and Finance, Vol. 51, pp. 173-206.
De Villiers, C. & Dumay, J. 2013, ‘Construction of research articles in the leading
interdisciplinary accounting journals’, Accounting, Auditing & Accountability Journal, Vol. 26
No. 6, pp. 876-910.
Flower, J. 2015, ‘The international integrated reporting council: a story of failure’, Critical
Perspectives on Accounting, Vol. 27 No. 2, pp. 1-17.
Isik, C., Dogru, T. & Turk, E.S., 2018, ‘A nexus of linear and non linear relationships between‐
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Massaro M., Dumay, J. & Guthrie J., 2016, ‘On the shoulders of giants: undertaking a
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Migacz, S.J., Zou, S. & Petrick, J.F., 2018, The “Terminal” effects of service failure on airlines:
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Tsamenyi, M., Cullen, J. & Gonzalez, J. 2006, ‘Changes in accounting and financial
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Tucker, B. P., Schaltegger., S 2016, 'Comparing the research-practice gap in management
accounting: a view from professional accounting bodies in Australia and Germany',
Accounting Auditing and Accountability, vol. 29, no, 3, pp. 362-400.
Vendrzyk, V.P., 2018, Self-reflective insights: Announcement of a Forthcoming special issue
of issues in accounting education, Issues in Accounting Education, vol. 33, no. 1, pp.1-1.
Wiesel, F, Modell, S. & Moll, J. 2011, ‘Customer orientation and management control in the
public sector: A garbage can analysis’, European Accounting Review, vol. 20, no. 3, pp. 551-
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