BUS707 Applied Business Research: Innovation & Accounting Review

This paper presents a structured literature review of four academic articles focusing on innovation in accounting and its impact on businesses. It summarizes the progression of accounting through technological advancements like cloud computing and total quality management (TQM). Common themes include the positive effects of accounting innovations on business performance, while different themes highlight the diverse aspects of innovation, such as open innovation models and the role of high-performance work systems (HPWS). Managerial implications focus on using objective data for assessing open innovation processes and promoting employee involvement to enhance organizational innovation. The review also addresses study limitations, suggesting future research directions to integrate various perspectives and broaden the scope of analysis. This review sets a foundation for understanding how innovation shapes modern accounting practices and corporate governance.

Running head: APPLIED BUSINESS RESEARCH
APPLIED BUSINESS RESEARCH
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Summary of the theory and progression in the field..................................................2
2. Common themes or findings in the four articles........................................................2
3. Different themes or findings across the four articles.................................................2
4. Managerial implications of the articles......................................................................3
5. Limitations of the study and direction based on future research...............................3
References......................................................................................................................4

2APPLIED BUSINESS RESEARCH
This paper has been elaborated on identifying a total of four relevant scholarly
sources for the research paper on the topic of innovation on accounting and its impact on
businesses. It shall present a brief literature review of the four articles in general, discussing
the summary of the theory and progression in the field of accounting as well as analysing
both the common as well as different themes across the four articles. Along with this, the
managerial implications of the four articles along with the study limitations and future
research direction proposed in the four articles have also been assessed.
1. Summary of the theory and progression in the field of accounting
Accounting is one of the subjects that has been transformed by technologies over the
past few years. The evolution of the accounting software, mobility, web enables
communication and cloud, all have left a significant mark in this field and have changed the
everyday activities of an accountant in contemporary world of improved science and
technological advancements. Sadikoglu and Zehir (2010) in their article “Investigating the
effects of innovation and employee performance on the relationship between total quality
management practices and firm performance” have considered TQM (total Quality
Management) as one of the significant innovations in the field of accounting. They have
proposed that there is a strong relation in between the TQM and the performance of the firms
and this effects the TQM practices. The main aim of this article is to investigate on this
relationship as well as to examine the mediating effects of employee performance and
innovation performance on the relationship between TQM practices and firm performance.
Furthermore, Michelino et al. (2015) on their studies have investigated on the various
business models for the OI (Open Innovation). Although there is much attention paid on the
OI by various different researchers and scholars, only few efforts have been made in order to
analyse the same after a pecuniary perspective by means of evaluating the costs that are
related to the acquisition of the external knowledge along with the revenues that derive from
the explosion of the internal technologies in the external market. They have suggested an
accounting-based framework for defining open innovation adoption modalities through the
analysis of annual reports. With the same, they have also described five different models in
regards to revenues, costs, divestments and new investments in the knowledge assets and
intangibles in relation to the OI in accounting. It is also to note that this study has revealed
and proposed the fact that the usage of cloud in the field of account is one of the significant
innovation that have improved the operations in this field and has made things easier for the
businesses. Also, it would continue to expand further. With the same, Raghavan and Thomas
(2014) in their study have claimed that the technological advancements and financial
prosperity have led to long periods of stability for the accounting education. They have
conducted a review on the basis of corporate governance, finance and accounting. Lastly, Fu
et al. (2015) have claimed that accounting related innovations have contributed to a great
extent in developing effective corporate governance in businesses today.
2. Common Themes and findings across the four articles
The most common themes of all these four articles is that each of these articles is
based on discussing some or the other innovations in the field of accounting in recent years.
With the same, these articles have also discussed the ways how these innovations on
accounting are helping the businesses in recent years. Sadikoglu and Zehir (2010) have
discussed about the relation in between the TQM and the performance of the firms and this
effects the TQM practices which is also considered to be a significant innovation in
accounting. Raghavan and Thomas (2014) have also discussed about the technological
advancements and financial prosperity in the field of accounting and related businesses.

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Innovations based on accounting are effective for the organizations in this sector. The
relationship of corporate governance with finance and accounting has been analysed by Fu et
al. (2015). The researchers have highlighted the value creation chain for the managers in
PSFs. It is also to note that the PSFs that have a high level of HPWS utilization are linked
with better innovation performance. With the same, Michelino et al. (2015) also have
investigated on the business models for the OI in the accounting sector.
3. Different themes and findings across the four articles
The findings by Michelino et al. (2015) have evaluated the costs related to the
acquisition of the external knowledge along with the revenues that derive from exploiting
internal technologies in the external market. It has explained the role that is played by the
internal and external technologies and knowledge. The findings which have been made in the
article by Sadikoglu and Zehir (2010) related to accounting innovation are based on the
innovations which had taken place in the year 2010. It has also has proposed the fact that the
usage of cloud in the field of accounting. The arguments are related to empirical evidence
that are taken from the Turkish firms. Furthermore, Raghavan and Thomas (2014) have
discussed the ideas based on the innovations related to effective operations of businesses
based on accounting. It is also to note that transformation of the contemporary firms has been
a major theme and on the basis of this analysis has been made in the article by Fu et al.
(2015). The findings of this study provide some empirical evidences for a chain of
mechanisms by which HPWS (high-performance work systems), firm innovation and overall
organizational performance are interrelated.
4. Managerial implications of the four articles
The usage of the objective data from the annual reports in the article of Michelino et
al. (2015) also has some practical implications in terms of both availability and
comparability. The framework provided by them can help the innovation managers by
providing them an objective tool for assess and analysing the status of their own open
processes as well as for comparing the same over time and space. It would also help them in
allowing the benchmarking with their competitors in the business market. Moreover, through
the findings on the mediating model of HPWS and firm innovation via IWB of employees in
article by Fu et al. (2015) the researchers have highlighted the value creation chain for the
managers in PSFs. It is also to note that the PSFs that have a high level of HPWS utilization
are linked with better innovation performance. The use of HPWS needs to focus on the
promotion of employees’ IWB that in turn improves the organizational innovation. Also, the
managerial implications that are provided by the article by Sadikoglu and Zehir (2010) are
related to the effectiveness of innovation in the field of accounting and its impacts. The
managers could learn the various different methods by means of which accounting play a
significant role in the field of crisis situations that take place within the businesses today. It is
also to mention that the fair value based accounting innovations can also be analysed by the
managers and can be implemented widely in business operations. Moreover, the
meaningfulness of the reporting activities within the modern businesses can be analysed by
the managers in really effective manner. Furthermore, managers could also make use of cloud
in the field of account as it is one of the significant innovation that have improved the
operations in this field and has made things easier for the businesses all over the world.
5. Study limitations and future research direction proposed in the four articles
In the study conducted by Michelino et al. (2015), there are certain limitations such as
the approach of these researchers are based on the intensity of the outcomes of the open

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activities on the whole business of the organisations instead of on a particular entity of such
activities. Secondly, as it is focused on the accounting indicators, the framework cannot be
applied to such industries like the software industry where non-pecuniary approaches to OI
are widely spread. Hence, the future research should integrate the framework with a new
perspective on the basis of both the entity of the transactions as well as the survey-based
literature approach. Moreover, the limitations in the research of Fu et al. (2015) is that this
study have used small sample size and is single industry focus along with cross-sectional
design. With the same, this study is also limited in the examination of IWB (innovative work
behaviours) of the employees in which it only considers the contextual factor of HPWS
(high-performance work systems). It is also to note that the review of the corporate
governance and accounting is also highly generalised. With the same, it is not based on any
of the sectors. This results in lack of explanation of the impacts which corporate governance
has on businesses today that are belonging from different sectors and industries.

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References:
Fu, N., Flood, P.C., Bosak, J., Morris, T. and O'Regan, P., 2015. How do high performance
work systems influence organizational innovation in professional service firms?. Employee
Relations, 37(2), pp.209-231.
Michelino, F., Lamberti, E., Cammarano, A. and Caputo, M., 2015. Open models for
innovation: an accounting–based perspective. International Journal of Technology
Management, 68(1-2), pp.99-121.
Raghavan, K. and Thomas, E.R., 2014. Instability, Innovation and Accounting
Education. Journal of Accounting & Finance (2158-3625), 14(2).
Sadikoglu, E. and Zehir, C., 2010. Investigating the effects of innovation and employee
performance on the relationship between total quality management practices and firm
performance: An empirical study of Turkish firms. International journal of production
economics, 127(1), pp.13-26.