Knowledge that Transforms

The purpose of this paper is to shed insights into the current inconsistencies of the control-innovation relationship. We draw on the dynamic capabilities literature to hypothesize that diagnostic and interactive control uses are indirectly related to innovativeness through their influence on the perceived formalization of coordination routines. That is, diagnostic and interactive control uses provide an input for an effective coordination process; the information provided allows for the coordination of activities to flourish. Further, we draw on contingency literature to hypothesize that the controls' direct effect on innovativeness depends on the degree of technological turbulence. Using data from a survey of 695 RD it includes a previously un-researched mediating variable (coordination routines), a moderator (technological turbulence), and two types of innovativeness (rate and newness). Second, the study demonstrates why and when diagnostic use is beneficial for innovativeness.

In this paper, we conceptualize shareholder activism demanding CSR transparency as an outcome of the marketization of a social movement. We argue that the infusion of profit-oriented motivations into the social justice ideals on which the original shareholder activism movement was founded has contributed to create a conceptualization of CSR as a risk to be managed. As marketized solutions to risk management privilege the provision of information, they contribute to explaining the emphasis placed by shareholders on transparency in their proposals. Drawing on a sample of U.S. firms over 2006–2012, our evidence suggests a marked increase in CSR disclosure for the sample firms targeted by transparency proposals. However, our analysis reveals that concerns over the CSR practices of the same firms worsen, suggesting that shareholder activism demanding CSR transparency does not inspire change in corporate activities beyond disclosure, at least in the short term. Our contribution to the accounting literature lies in conceptualizing how the emphasis placed on CSR disclosure contributes to ensconcing the social movement into a corporation-centric, market-driven approach, moving away from the initial ideals of social justice aiming to push corporations to act on societal concerns. Altogether, we expose how the accounting practice of CSR disclosure is complicit in the attrition of the initial ideals of shareholder activism on CSR.

This paper draws from the service science and professional service literatures to conceptualize financial auditing as an economic service. A central characteristic of economic services is the participation of the customer/client in the production process. The necessity of having the customer/client be a co-producer introduces greater heterogeneity to the provision of services relative to the manufacturing of goods which, in turn, creates a tension between service quality and service efficiency. One implication of this tension is that standardization of the audit process may not increase audit quality. We further argue that audit research should give more attention to the idiosyncratic nature of audit engagements and the importance of successful cooperation between the service provider (the audit firm) and the client for improving audit quality. Utilizing research on service networks, we draw attention to a broader perspective than the dyadic relations of service provider and client to show that the possible frictions between the value of co-creation of the service and the independence of the service professional are endemic to the service process, implying that efforts to maximize auditor independence may have unexpected costs that impair audit quality.

We examine how adverse selection problems when hiring new external CEOs affect contractual features of inducement grants. Focusing on the sensitivity of inducement grants to the new CEO announcement return ($ Sensitivity ), we find that firms provide inducement grants that are more sensitive to the new CEO announcement return when information asymmetry about the new CEO is more severe and the costs of adverse selection problems are higher. We also find a positive relation between the market reaction to the appointment and $ Sensitivity . We consider factors that reduce information asymmetry (e.g., engaging a search firm or appointing internal CEOs) and find they are associated with lower sensitivity of the inducement grant to the announcement.

Discrete recognition is a long-standing and ubiquitous accounting practice, but it has been widely criticized for suppressing information and inducing accounting-motivated transactions. We study a model to examine the economic consequences of shifting away from discrete recognition to a continuous measurement approach. Without manipulation, discrete recognition is less informative than the continuous approach. However, the continuous regime induces more manipulation. The equilibrium informativeness is determined by both the accounting standard and endogenous manipulation. Discrete recognition is more informative than its continuous counterpart precisely when manipulation is a severe threat. We respond to the recent call in Kothari, Ramanna, and Skinner (2010) for using positive accounting theory to explain certain long-standing accounting practices. We also discuss the model's implications for fair value accounting.

contemporary advances from 2010 to date.

Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Share Icon Share Twitter LinkedIn Tools Icon Tools Get Permissions Cite Icon Cite Search Site Citation Mary E. Barth; Annual Editor Report. The Accounting Review 1 November 2020; 95 (6): 1–22. doi: https://doi.org/10.2308/accr-10804 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search nav search search input Search input auto suggest Search