Analysis of Management Accounting Research: Themes and Future Scope

This report provides a comprehensive analysis of management accounting research, tracing its evolution from the 1950s and addressing key questions regarding established knowledge, current themes, and future directions. It explores topics such as budgeting, performance measurement, and cost accounting, examining the influence of environmental factors and organizational strategies. The report discusses established knowledge in areas like management control systems and cost accounting, highlighting challenges and the importance of replication studies. Current themes, including performance incentives, evaluation, and budgeting, are analyzed, along with emerging trends such as behavioral economics and inter-organizational contexts. The report emphasizes the need for comparable studies and consistent results to advance management accounting knowledge and suggests the importance of replication studies for validating research findings and improving the reliability of outcomes. The conclusion stresses the significance of replication studies to strengthen the validity and reliability of management accounting research.

MANAGEMENT ACCOUNTING

Management accounting
Introduction
The MA research can be traced to 1950 in the U.S and was a response to the Ford Foundation work to
enhance the business schools. This contained more specification on the concept of social science. There has
been many cases of MA research based on social science and was done by the non accounting faculty
because the accounting faculty were not experienced in the conduct of social science research. Over the
years, experts had devoted significant time period in putting their major significance about management
accounting system. The experts and researchers had administered in-depth study in the field of management
control system and its outcome on the subject and thereby, the researchers at different point of time they
had encountered enormous challenges on the topic (Brown, 2013). The research points out, as the
establishments and their strategies are aggressive and competitive, the formation of design, utility and
advantage of the management control structure to have an impact only the factors like environment and
work uncertainty (Bisbe et. al, 2007). The MA research is done by those accounting faculties who have a
strong command in the field of social science research as accounting in the present scenario contains
doctoral programs that are based on social science research method and theories.
The MA research is into practice for the last sixty years and here I have a chance to assess the concept of
MA research. The evaluation is based upon three questions that are addressed.
1. In what MA topic do we have established knowledge
2. The theme that are currently present in MA research
3. What is required to be learnt in MA, going forward?
In what MA topic do we have established knowledge?
Established knowledge on MA topic is about to happen after innumerable researches have projected on the
topic over a considerable time frame. As per the definition of Merriam-Webstar established is defined as ‘to
cause something to be known widely and accepted. Going through the definition of established knowledge
it can be explained that the established knowledge as drawing power that is accepted on a large spectrum of
the establishment and finds places beyond the boundaries. Established knowledge in management is a
subject of research and academics has been discussed all the time and carried out their research on the
subject. Established knowledge can be compiled in the management accounting are from budgets, cost of
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Management accounting
the product, performance measurement, and evaluation of the measurement (Chenhall, 2007). The
information gathered must be authentic in nature and unquestionable. Therefore, established knowledge has
the power to influence decisions so academics are studying MA topics in the direction of established
knowledge which is extensive in nature and power to provide solutions in the decision-making process.
Therefore, the established knowledge or the conventional expertise in management accounting can extend
great help in formulating guidelines and in taking the correct decision.
Management Control system
Individual MA research studies on MCSs does not assess the MCS in totality rather stress upon a single or
few of the management control that is MA information or control of various types. Researchers have
acknowledged the application and importance of management control system in MA. Studies are done
based on the management control by circumstantial components like the framework of the organization and
competitive planning. And if there is any shortcoming in between the circumstantial factors than it will
have an adverse impact on the performance of the system. MCS research caters to three MA topics:
 Budgets and budgeting that is compensation based on budget, the goal difficulty in budget, etc
 Performance contingent incentives that are bonus that applies on performance that is measured or
the difference that exists between budget goal and performance that is measured.
 Measurement of performance and measures like adjustment of performance for the influence of the
uncontrollable.
The above three MA topic play a leading role in planning and controlling. An extensive research has
provided evidence on the theory of the three MA topics. The vital reasons are environmental and
uncertainty of the task and asymmetric information. The recent research impact are performance of
individual or pertains to individual.
Cost Accounting system in Management Accounting
Academics have come out with two distinct analysis of cost accounting attributed to management
accounting research. MA research on cost accounting has shown two main lines of inquiry. One of it
focuses on the cost estimates accuracy that is provided by various cost accounting methods. Such a research
leads to evidence on the validity of three assumptions that needs to be proper for activity based costing so
that accurate cost estimate can be provided. Activity cost derived not only by the volume but also by non-
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Management accounting
volume operatives; there is a legitimate straight relationship exists between cost operative and the existence
of overhead cost (Bol, 2008). Secondly, the inquiry spreads to inquiry on the cot accounting that assess
environmental and organizational factors that influence whether organization should proceed with the
application of ABC.
Difficulties preventing production of Established Management accounting knowledge
The small number of studies is one of the potent problem when it comes to the concept of established MA
knowledge. When the results of the replicated and the original studies are not effective by nature, then their
different possible reasons for the same and the deposition on whether those reasons can explain the
indecisive outcomes of the exercise. Therefore, such replications can extend in recognizing situations to
contain at a prescribed limit in the study of application theory. Therefore, a replication study may not have
established for factors for ineffective results instead the diagnosed study can be applied for more credible
results. On a sequential basis, this offer required information and can be utilized to explain the reasons and
effect in management accounting.
The MA research focuses mainly on individual study validity that is constructing, external, internal and
statistical conclusion that is essential for the individual studies to provide established knowledge. However,
it needs to be noted that no single study contains all the four validity as every study is endowed with
different tradeoffs. However, the number of comparative studies on all aspects relating to management
accounting is so little that it restricts the assessment of the consistency of the results of studies.
Management accounting research spells out more established management accounting knowledge of
studies that are more feasible with the effective outcomes (Chapman et. al, 2007). Therefore, it is most
important that the effectiveness of management accounting research outcomes can be examined so that the
established accounting knowledge is capable on re-establishing the results.
Common themes in MA research in present time
Incentives of performance, Evaluation of performance and budget and budgeting are the three crucial data
that have searched for in MA on a regular basis. These three are the foundations of the accounting
management which signifies their importance. Participative budgeting, difficulty in achieving goals and
budget comprising of compensation are the priority under the budget topic. Incentives topic can be said to
as the difference in the achieved goals and the setup target as it checks the performance. Evaluation of the
performance keeps a record of the financial and the non-financial ones so as to detect the flaws.
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Management accounting
Managerial accounting works on the principle of distributing knowledge and thereby eliminating the threats
from the decision evaluating processes. Production expense of goods, expenses that are in accordance with
the marketing are used to prepare the accounting reports (Lipe & Salterio, 2000). These are the reports
which provide data about the performance of the company for a span of time. Firstly, a continuing theme
will evaluate the decision-making process of management accounting as stated by Sprinkle and
Williamson. Rewards given to the employees are based on their performance which is evaluated as per their
working in the company. It is to be seen that the performance contingencies, budgets, incentives are some
of the key factors that can help to eliminate the problems (Lambert, 2007). Performance-based on partiality
is also seen nowadays in the accounting reports. The second theme is that of the study of MA is the inter-
organizational context as compared to the context that is the main context of intra-organizational of an
established MA knowledge. It clearly depicts the ease in the decision-making process in accordance to
select partners, design the contracts, control activities and behavior. Thirdly, it results in theme due to the
management of accounting research by usage of behavioral economics. Rather than having a belief in any
of the two theoretical outlooks it provides an explanation of causes and effects of MA by linking it with
both neoclassical economics and physical theory. It provides evidence which is theoretical based and it
basically shed light on MA influence the trade-off of the individuals. The non-monetary terms payoff
influences on social psychological disadvantage which is due to bounded rationality and it also influences
the emotion as well as mood. The fourth theme concentrates on competitive strategies which affect the
balanced scorecard and another level of control (Basu & Park, 2014). This level mainly evaluates the
impact of common and performances that are different and unique in terms of managerial performances.
A lot of things can be learned from management accounting research. The studies of the following research
show reliability which are valuable for an accountant. The reason behind this is it cannot match the
outcome derived in the original. Many others also have a way to get duplicated by some or the other means
nut in unable to provide peaceful reliability and satisfaction to the users (Basu & Park, 2014). The reason
for the outcome which does not match is the selected research methods are more suitable to them and the
full reporting and analysis are not done here.
What to learn in MA in future
MA can be applicable on a more consistent basis if the studies are comparable and have consistent results.
The comparable studies are very low that limits the results and hence, consistency is missed. When the
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Management accounting
result of the studies do not match the compared results then it is vital to know the cause of inconsistency
and what lead to the limitation of the MA knowledge. There are situations where only linear impacts are
shown through the various theories of social science also show nonlinearities. But examinations of
basically linear part take place. Because of all this reproduction of original part does not take place as the
replication might result in copying all the things but lack in the condition which should be favored. The
replication sometimes proves to be advantageous as the study do not provide the features of reliability,
validity and even do not provide the conspiracy theory which is on the concept of causes of variables in
management accounting. For researchers to decide what studies are effective they should concentrate the
process to replicate them (Banker & Johnston, 2007). The replication is important due to two purposes. The
first one is to differentiate between the good and the bad one. The second one is it will improve the
research. This conclusion can be made that good studies are those where the process of replication can be
done. Replication of MA studies that have strong level of validity and reliability are important as the
results will not match with the original or other studies that replicates. On the other hand, very little benefit
can be gathered by the replication of a study that is published in nature. But, the good studies replicate as
they shed light on the threat that is present to the validity and contains high level of reliability. However,
the bad studies do not replicate as they fail to address threats.
Conclusion
It needs to be noted that the research literature on MA will remain feeble if no replication studies are
produced. This limits the validity, as well as reliability of the MA research by evaluation of the consistency
of the comparable results. Lots of replication studies are required in management accounting research as it
will lead to the production of the established knowledge. Time pass and the people realize that at present
there is fewer replication as this replication are not rewarded for the time being and the replication are even
rejected by the journal review process. When publication of the following replication is done then more
resistance is needed because many results are identified that is not yet replicated. When the replication is
found to be common than the validity and reliability of the research is made in order to found validity in the
establishment of MA knowledge. MA acts as a boon to the people to decide their financial decisions
successfully. All the above facts denote that the production of more MA knowledge will enhance if
replication study is increased.
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Management accounting
A further peep into 25 years from now, when it will be the 50th anniversary I hope the research community
will have more replications that will support the concept. Therefore, it is requested by the current and future
editors to stress upon replications that have high level of validity, as well as reliability.
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Management accounting
References
Banker, R & Johnston, H. (2007). Cost and profit driver research. Oxford, U.K.: Elsevier.
Basu, S & Park, H.U. (2014). Publication Bias in Recent Empirical Accounting Research. Working
paper, Temple University
Bisbe, J, Foguet, B & Chenhall, R. (2007). Defining management accounting constructs: A
methodological note on the risks of conceptual misspecification. Accounting, Organizations
and Society 32(8), 789–820
Bol, J. (2008). Subjectivity in compensation contracting. Journal of Accounting Literature. 27, 1–24.
Brown, P. (2013). How can we do better?. Accounting Horizons. 27(4), 855–859
Chapman, C, Hopwood, A & Shields, M. (2007). Handbook of Management Accounting Research.
Oxford, U.K.: Elsevier
Chenhall, R. (2007). Theorizing contingencies in management control systems research. In
Handbook of Management Accounting Research
Lambert, R. (2007). Agency theory and management accounting, In Handbook of Management
Accounting. Oxford, U.K.: Elsevie
Lipe, M & Salterio, S. (2000). The balanced scorecard: The judgmental effects of common and
unique performance measures. The Accounting Review 75(3), 283–298
Shield, M.D. (2015). Established Management Accounting Knowledge. Journal of Management
Accounting research. 27(1), 123-132
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