Do we need to use an accountant? The sales growth and survival benefits to family SMEs

This article explores the relationship between the usage of an external accountant and family firm sales growth and survival. Using a longitudinal panel of Australian small and medium sized family enterprises, we find that external accountants have a positive impact on sales growth and survival. We also find that the degree to which the accountant is acquainted with the family and the firm’s needs, which we term as embeddedness, moderates these positive outcomes. Furthermore, we find that appropriate strategic planning processes are necessary to maximize the sales growth benefit; however, these processes are not necessary to gain the survival benefit.

Constructing a research network : accounting knowledge in production

Purpose – The purpose of this paper is to contribute to the sociology-of-science type of accounting literature, addressing how accounting knowledge is established, advanced and extended. Design/methodology/approach – The research question is answered through the example of research into linkages between accounting and religion. Adopting an actor-network theory (ANT) approach, the paper follows the actors involved in the construction of accounting as an academic discipline through the controversies in which they engage to develop knowledge. Findings – The paper reveals that accounting knowledge is established, advanced and developed through the ongoing mobilisation of nonhumans (journals) who can enrol other humans and nonhumans. It shows that knowledge advancement, establishment and development is more contingent on network breadth than on research paradigms, which appear as side-effects of positioning vis-a-vis a community. Originality/value – The originality of this paper is twofold. First, ANT is applied to accounting knowledge, whereas the accounting literature applies it to the spread of management accounting ideas, methods and practices. Second, an original methodology for data collection is developed by inviting authors from the network to give a reflexive account of their writings at the time they joined the network. Well diffused in sociology and philosophy, such an approach is, albeit, original in accounting research.

Integrating agency and resource dependence theory : firm profitability, industry regulation, and board task performance

Boards of directors are key governancemechanisms in organizations and fulfill twomain tasks:monitoringmanagers and firm performance, and providing advice and access to resources. In spite of a wealth of researchmuch remains unknown about how boards attend to the two tasks. This study investigates whether organizational (firm profitability) and environmental factors (industry regulation) affect board task performance. The data combine CEOs' responses to a questionnaire, and archival data from a sample of large Italian firms. Findings show that past firm performance is negatively associatedwith board monitoring and advice tasks; greater industry regulation enhances perceived board task performance; board monitoring and advice tasks tend to reinforce each other, despite their theoretical and practical distinction.

ICT shared services in the higher education sector : foundations, benefits, success factors and issues

Universities are more and more challenged by the emerging global higher education market, facilitated by advances in Information and Communication Technologies (ICT). This requires them to reconsider their mission and direction in order to function effectively and efficiently, and to be responsive to changes in their environment. In the face of increasing demands and competitive pressures, Universities like other companies, seek to continuously innovate and improve their performance. Universities are considering co-operating or sharing, both internally and externally, in a wide range of areas to achieve cost effectiveness and improvements in performance. Shared services are an effective model for re-organizing to reduce costs, increase quality and create new capabilities. Shared services are not limited to the Higher Education (HE) sector. Organizations across different sectors are adopting shared services, in particular for support functions such as Finance, Accounting, Human Resources and Information Technology. While shared services has been around for more than three decades, commencing in the 1970’s in the banking sector and then been adopted by other sectors, it is an under researched domain, with little consensus on the most fundamental issues even as basic as defining what shared services is. Moreover, the interest in shared services within Higher Education is a global phenomenon. This study on shared services is situated within the Higher Education Sector of Malaysia, and originated as an outcome resulting from a national project (2005 – 2007) conducted by the Ministry of Higher Education (MOHE) entitled "Knowledge, Information Communication Technology Strategic Plan (KICTSP) for Malaysian Public Higher Education"- where progress towards more collaborations via shared services was a key recommendation. The study’s primary objective was to understand the nature and potential for ICT shared services, in particular in the Malaysian HE sector; by laying a foundation in terms of definition, typologies and research agenda and deriving theoretically based conceptualisations of the potential benefits of shared services, success factors and issues of pursuing shared services. The study embarked on this objective with a literature review and pilot case study as a means to further define the context of the study, given the current under-researched status of ICT shared services and of shared services in Higher Education. This context definition phase illustrated a range of unaddressed issues; including a lack of common understanding of what shared services are, how they are formed, what objectives they full fill, who is involved etc. The study thus embarked on a further investigation of a more foundational nature with an exploratory phase that aimed to address these gaps, where a detailed archival analysis of shared services literature within the IS context was conducted to better understand shared services from an IS perspective. The IS literature on shared services was analysed in depth to report on the current status of shared services research in the IS domain; in particular definitions, objectives, stakeholders, the notion of sharing, theories used, and research methods applied were analysed, which provided a firmer base to this study’s design. The study also conducted a detailed content analysis of 36 cases (globally) of shared services implementations in the HE sector to better understand how shared services are structured within the HE sector and what is been shared. The results of the context definition phase and exploratory phase formed a firm basis in the multiple case studies phase which was designed to address the primary goals of this study (as presented above). Three case sites within the Malaysian HE sector was included in this analysis, resulting in empirically supported theoretical conceptualizations of shared services success factors, issues and benefits. A range of contributions are made through this study. First, the detailed archival analysis of shared services in Information Systems (IS) demonstrated the dearth of research on shared services within Information Systems. While the existing literature was synthesised to contribute towards an improved understanding of shared services in the IS domain, the areas that are yet under-developed and requires further exploration is identified and presented as a proposed research agenda for the field. This study also provides theoretical considerations and methodological guidelines to support the research agenda; to conduct better empirical research in this domain. A number of literatures based a priori frameworks (i.e. on the forms of sharing and shared services stakeholders etc) are derived in this phase, contributing to practice and research with early conceptualisations of critical aspects of shared services. Furthermore, the comprehensive archival analysis design presented and executed here is an exemplary approach of a systematic, pre-defined and tool-supported method to extract, analyse and report literature, and is documented as guidelines that can be applied for other similar literature analysis, with particular attention to supporting novice researchers. Second, the content analysis of 36 shared services initiatives in the Higher Education sector presented eight different types of structural arrangements for shared services, as observed in practice, and the salient dimensions along which those types can be usefully differentiated. Each of the eight structural arrangement types are defined and demonstrated through case examples, with further descriptive details and insights to what is shared and how the sharing occurs. This typology, grounded on secondary empirical evidence, can serve as a useful analytical tool for researchers investigating the shared services phenomenon further, and for practitioners considering the introduction or further development of shared services. Finally, the multiple case studies conducted in the Malaysian Higher Education sector, provided further empirical basis to instantiate the conceptual frameworks and typology derived from the prior phases and develops an empirically supported: (i) framework of issues and challenges, (ii) a preliminary theory of shared services success, and (iii) a benefits framework, for shared services in the Higher Education sector.

From concept to capability : developing design thinking within a professional services firm

Corporate business and management are embracing design thinking for its potential to deliver competitive advantage through helping them be more innovative, differentiate their brands, and bring more customer centric products and services to market (Brown, 2008). As consumers continue to expect more personalisation and customisation from their service providers, the use of design thinking for innovation within organisations is a logical progression. To date however, there is little empirical literature discussing how organisations are setting about integrating design thinking into their culture and innovation practices. This paper is a first step in initiating a scholarly discussion on the integration of design thinking within organisational culture. Deloitte Australia is a large professional services firm employing over 5700 staff in 12 offices across Australia. The company provides a range of services to clients in the areas of audit, tax, financial advisory and consulting. In early 2011 the company made a strategic commitment to introducing design thinking into the organisation’s practices. While it already maintains a strong innovation culture, to date it had largely been operating within an analytical business environment. For Deloitte, design thinking is an opportunity to create better outcomes for the people they serve – both internal and external stakeholders (Brown and Wyatt, 2010). Research was conducted using case study methodology and ethnographic methods from June to September 2011 at the Melbourne Deloitte office. It involved three methods of data collection: semi structured interviews, participant observation and artifact analysis. This paper presents preliminary case study findings of Deloitte’s approach to building awareness and a consistent understanding of design thinking, as well as large scale capability, across the firm. Deloitte’s commitment to transforming its culture to one of design thinking poses significant potential for understanding how design thinking is comprehended, enabled and integrated within a complex organisational environment.

Business in troubled waters : does adverse attitude affect firm value?

This paper investigates the relationship between US MNCs' valuations and anti-Americanism in countries where MNCs' foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.

Enterprise policy and the metagovernance of firm capabilities

The underlying logic of enterprise policy is that there are impediments to change in economic systems that can be traced to the path-dependent behaviors of economic actors that prevent them from exploring new knowledge and new ways of doing things. Enterprise policy involves firm-level interventions delivered by distributed networks of business advisors coordinated by knowledge intermediaries. These metagovernance arrangements are able to disrupt the path-dependent behaviors of organizations. The logic and benefits of enterprise policy are explored through reference to public administration, strategic management and evolutionary theory, and three case studies.

Accounting regulation for charities : international responses to IFRS adoption

This paper examines charity regulatory systems, including accounting standard setting, across five jurisdictions in varying stages of adoption of International Financial Reporting Standards, and identifies the challenges of this process. Design/methodology/approach Using a regulatory space approach, we rely on publicly available archival evidence from charity regulators and accounting standard setters in five common-law jurisdictions in advanced capitalist economies, all with vibrant charity sectors: United Kingdom, United States of America, Canada, Australia and New Zealand. Findings The study reveals the importance of co-operative interdependence and dialogue between charity regulators and accounting standard setters, indicating that jurisdictions with such inter-relationships will better manage the transition to IFRS. It also highlights the need for those jurisdictions with not-for-profit or charity-specific accounting standards to reconfigure those provisions as IFRSs are adopted. Research limitations/implications The study is limited to five jurisdictions, concentrating specifically on key charity regulators and accounting standard setters. Future research could widen the scope to other jurisdictions, or track changes in the jurisdictions longitudinally. Practical implications We provide a timely international perspective of charity regulation and accounting developments for regulators, accounting standard setters and charities, specifically of regulatory responses to IFRS adoption. Originality/value: The paper contributes fresh insights into the dynamics of charity accounting regulation in an international context by using regulatory space as an organising framework. While accounting regulation literature provides a rich interpretation of regulatory issues within the accounting arena, little attention has been paid to charity accounting regulation.

The Australian nonprofit sector legal and accounting almanac 2012

This is the fifth year that The Australian Centre for Philanthropy and Nonprofit Studies has published an Almanac summarising annual developments in the law relevant to Australia's nonprofit sector. The Almanac provides comprehensive summaries of legal cases in Australia and overseas, and changes to relevant legislation in all Australian jurisdictions, during 2012. It also includes articles outlining developments in taxation and charity law, and the regulation of nonprofit organisations. This edition naturally includes extensive discussion of the new national regulator, the Australian Charities and Not-for-profits Commission (ACNC), and the legal arrangements surrounding its establishment. There are also articles on matters of interest arising in New Zealand, the UK, and Canada.

Management accounting adaptability in an integrated information system environment

In this study, we explore the relationship between the qualities of the information system environment and management accounting adaptability. The information system environment refers to three distinct elements: the degree of information system integration, system flexibility, and shared knowledge between business unit managers and the IT function. We draw on the literature on integrated information systems (IIS) and management accounting change and propose a model to test the hypothesized relationships. The sample for this study consists of Australian companies from all industries.

The impact of auditor independence regulations on established and emerging firms.

Purpose – The purpose of this paper is to study whether auditor independence reforms introduced in 2004 led to an enhancement in earnings quality in the post-reform era. Design/methodology/approach – This study predicts that as the cost of compliance will vary based on a firm's existing corporate governance regime and the level of external scrutiny (monitoring) it faces, we compare the earnings quality of a sample of “established” (S&P/ASX 100) to a sample of “emerging” (S&P/ASX Small Ordinaries Index) firms. The paper examines the reporting behaviour of the two groups of listed entities, covering the regulatory change period 2003-2006. The paper uses regression modelling to test the associations between increased audit independence, earnings quality and corporate governance mechanisms over the pre- and post-regulatory period. Findings – The paper's results confirm that earnings quality for the established firms was enhanced in the post-reform period; while this was not the case for emerging firms. The evidence also suggests that corporate governance mechanisms of board independence and board financial skill are associated with higher earnings quality; while the higher the concentration of insider firm ownership is associated with lower earnings quality. Practical implications – This study provides policy makers with evidence as to changes in reporting behaviour following law reform aimed at strengthening auditor independence. Originality/value – The studies on earnings quality are informed by the US market practices. Australia provides a unique setting through its auditor independence reforms to examine the impact of reform choices. This study also investigates two specific subsets of the market: established firms and emerging firms.

Illustrating outcomes for Australian nascent and young firm entrepreneurial activity

This paper examines the outcomes of nascent and young entrepreneurial firms in Australia. Findings of interest in this paper include: • After three years similar proportions of nascent firms reach an operational state (31 per cent), i.e. sales regularly exceed costs, compared with those that have terminated (35 per cent), and those who are still trying to achieve venture creation (34 per cent). This outcome closely mirrors the outcomes in the US PSED study. • The young firm sample shows that these new ventures remain more robust to firm closure. The vast majority of young firms (78 per cent) continue to be active in the market the last time they participated in CAUSEE. • The annual termination rate for young firms is 9 per cent at most, and 14 per cent cumulatively, while cumulatively only 8 per cent of young firms experience a drop-off in activity to be considered as having uncertain status. • The average number of employees in Nascent Firms is one person, the average number of Young Firm employees increases from two at first sampling to three after three years. • While the founders of exiting Nascent Firms are more likely to return to their old job upon termination of their business, Young Firm founders move on to new jobs. Regardless the majority of exiting firm founders rate their experience as positive and are prepared to attempt business creation in the future.

Entrepreneurial growth : the role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.

ACE research vignette 026 : Do Entrepreneurs’ Personal Networks Influence Small Firm Performance?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Dr. Rene Bakker, examines the evidence on the effects of a entrepreneurs’ personal networks on small firm performance, and the factors that moderate this relationship.