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Article
Publication date: 17 June 2021

Waqas Khan, Qasim Ali Nisar, Nadia Nasir, Sobia Nasir and Yousaf Siddiqui

This study aims to examine the key entrepreneurial roles (financial literacy, risk tolerance and competency) in the financial performance of small and medium enterprises…

Abstract

Purpose

This study aims to examine the key entrepreneurial roles (financial literacy, risk tolerance and competency) in the financial performance of small and medium enterprises (SMEs) in Pakistan and the mediating effects of locus of control and spiritual and emotional quotients.

Design/methodology/approach

The study data was collected from 541 SMEs in Pakistan (the target population) through a survey and analysed with partial least squares structural equation modelling.

Findings

The findings revealed that the key entrepreneurial characteristics were positively related to locus of control and spiritual quotient and elevated the financial performance in entrepreneurship. It was also reported that locus of control and spiritual quotient mediated between key entrepreneurial characteristics and financial performance. In this regard, emotional quotient strengthened the existing relationships between key characteristics, locus of control and spiritual quotient.

Practical implications

This study highlighted sustainable implications for SMEs to develop an effective mechanism and improve financial performance through guidelines that emphasized entrepreneurial characteristics and behaviours towards positive entrepreneurial ventures. This study also enabled policymakers to design policies that catalysed SME performance in Pakistan.

Originality/value

This study contributed a novel concept of key entrepreneurial characteristics by introducing a characteristics tool kit. Consequently, information on a unique framework (by integrating entrepreneurial characteristics and financial performance) and literature on spiritual quotient and locus of control in entrepreneurship were enriched. Contributions to the regulatory focus theory and four-phase Rubicon model in the study context were also made.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 1 August 1995

Rocco R. Vanasco, Clifford R. Skousen and Curtis C. Verschoor

Professional accounting associations in various countries andgovernmental and other quasi‐official bodies have played an importantrole not only in the evolution of…

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4097

Abstract

Professional accounting associations in various countries and governmental and other quasi‐official bodies have played an important role not only in the evolution of internal control reporting on a global scale, but also in educating management, investors, financial institutions, accountants, auditors, and other interested parties highlighting the pervasiveness of the effects of a sound internal control structure in corporate reporting as well as other aspects of an organization′s success. These associations include the Institute of Internal Auditors (IIA), the American Institute of Certified Public Accountants (AICPA), the General Accounting Office (GAO), the Securities and Exchange Commission (SEC), the Cadbury Committee, the Institute of Chartered Accountants of England and Wales (ICAEW), the Scottish Institute of Chartered Accountants (SICA), the Canadian Institute of Chartered Accountants (CICA), and others. Business failures, management fraud, corporate misconduct, international bribery, and notorious business scandals in all sectors of business have prompted the US government to take drastic action on internal control reporting to safeguard public interest. Several professional and government committees were formed to study this precarious situation: the Treadway Commission, the Committee of Sponsoring Organizations (COSO) of the Treadway Commission, the Packard Commission, the Cohen Commission, the Adams Commission in Canada, the Cadbury Committee in the UK, and others. The principal motivation for the changing dynamics has been growing public pressure for greater corporate accountability. The government′s pressure on the accounting profession and management of public corporations has been pivotal in spearheading internal control reporting. Examines the role of professional associations, governmental agencies, and others in promulgating standards for internal control reporting, and the impact of legislation on this aspect of internal auditing in the USA and worldwide.

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Managerial Auditing Journal, vol. 10 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 16 May 2019

Pouya Seifzadeh and W. Glenn Rowe

Corporate controls are mechanisms that corporations use to ensure that the processes and/or outcomes of their business units meet corporate expectations. Challenges in…

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3089

Abstract

Purpose

Corporate controls are mechanisms that corporations use to ensure that the processes and/or outcomes of their business units meet corporate expectations. Challenges in measurement of corporate controls have led many researchers to operationalize them as part of the more ambiguous corporate effects construct, instead of addressing them separately. The purpose of this paper is to examine the significance of “fit” between corporate control mechanisms and business unit strategy in performance of business units.

Design/methodology/approach

The authors use ordinary least squares regression analysis on data collected between 2010 and 2012 from surveys from managers of 142 Iranian corporations and 1,822 of their subsidiaries. The authors also use financial and market data collected by an IDRO division and accessed through partnership in a joint project.

Findings

The authors found that while the fit between business unit strategy and corporate controls has a significant effect on business unit financial performance, it does not have a similar effect on market performance. The findings demonstrate that when business unit managers perceive that they are subject to a balance of strategic and financial controls with a slightly greater emphasis on strategic controls, then business units have higher financial and market performance, although the difference in financial performance is not significant.

Research limitations/implications

The authors find that the misfit between corporate controls and business strategies in such cases could negatively affect the performance of the business unit. However, this research also contributes to a better understanding of the importance of strategic controls to the successful performance of business units. The findings show that while the fit between controls and strategy is most critical for achieving financial performance in business units that pursue product leadership, strategic controls play a more prominent role than financial controls in achieving higher financial or market share performance for all business units.

Practical implications

The findings of the propositions in this research would discourage corporations with tight financial control from engaging in acquisition of businesses considered to be product leaders in their relative product markets.

Originality/value

Past research focusing on the fit between corporate-level factors and business-level factors and their role on business performance are largely limited to conceptual work. The limited empirical studies completed in the past generally reduce control mechanisms to lack or absence of autonomy. This shortcoming has been mainly due to difficulties in measurement of control mechanisms. The empirical study overcomes these barriers and in doing so, reveals surprising findings related to the effectiveness of different control mechanisms.

Details

Journal of Strategy and Management, vol. 12 no. 3
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 4 June 2018

Budi Waluyo

The purpose of this paper is to explore the practices of financial autonomy and control the emerging issue of agencification in the higher education sector.

Abstract

Purpose

The purpose of this paper is to explore the practices of financial autonomy and control the emerging issue of agencification in the higher education sector.

Design/methodology/approach

The practices are investigated using case studies from seven semi-autonomous state universities in Indonesia. The data were collected through semi-structured interviews with 17 respondents including university officials, policymakers, and experts. The interview results were analysed using an inductive-deductive approach.

Findings

This research highlights an unstable balance between financial autonomy and control practices in the universities. Autonomy supports agencification mainly by simplifying financial procedures and control is seen by university managers to be overemphasised compared to in the other state universities. Despite successes in introducing a business-like atmosphere within bureaucratic universities, questions about balancing financial autonomy and control remain.

Research limitations/implications

The small number of cases implies limited generalisability. The two characteristics used, size and parent ministries do not represent all university variabilities.

Practical implications

Agencification has become a key reform practice for state universities. Rather than using a “one size fits all” approach, the government needs a repertoire of models for these institutions.

Originality/value

This study provides empirical evidence of agencification in the higher education sector with an emphasis on the financial dimension of autonomy and control in a developing country setting.

Details

International Journal of Public Sector Management, vol. 31 no. 7
Type: Research Article
ISSN: 0951-3558

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Article
Publication date: 1 June 2021

Ümmühan Mutlu and Gökhan Özer

This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article…

Abstract

Purpose

This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article aims to reveal the moderator effect of financial literacy on locus of control and financial behavior.

Design/methodology/approach

Responses were collected from a questionnaire given to a convenience sample of 1,347 individual investors. Exploratory factor analysis (EFA), which reveals the factor structure of the scale, was used at the beginning of the study, and then confirmatory factor analysis (CFA) was performed to confirm this new factor structure. Hypothetical relationships were examined using structural equation modeling.

Findings

The study provides statistical support for the validity and reliability of the scales. The statistical results of the analysis reveal that financial literacy and locus of control have a positive effect on financial behavior. Moreover, the authors prove that financial literacy changes the relationship between internal locus of control and financial behavior. In conclusion, financial literacy plays a significant role as a moderator variable that interacts with locus of control.

Originality/value

The findings of the research are important in demonstrating empirical evidence for the theoretical correlations. In support of the current literature, this study has confirmed the positive effects of internal locus of control and financial literacy on the financial behavior of individual investors. In addition, it has been determined that the relationship between an individual's financial behavior and internal locus of control varies according to their level of financial literacy.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

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Book part
Publication date: 28 October 2021

Lawrence P. Grasso and Thomas Tyson

This study investigates the relationship between lean manufacturing practices, management accounting and performance measurement (MAC & PM) practices, organizational…

Abstract

This study investigates the relationship between lean manufacturing practices, management accounting and performance measurement (MAC & PM) practices, organizational strategy, structure, and culture, and facility performance. We extended past research by examining the relationships between lean manufacturing, MAC & PM practices and performance in a broader organizational context. Our study was performed using survey data provided by managers and executives at 368 facilities that had contacted the Shingo Institute for information or that had entered a Shingo Prize competition. Consistent with past research we found a significant positive association between lean manufacturing practices and lean MAC & PM practices. We found that greater employee empowerment, use of process performance measures, and use of lean accounting practices were driven primarily by lean strategy and secondarily by the extent of lean manufacturing practices. We also found that changes in organization structure to support lean are driven primarily by lean strategy and secondarily by lean manufacturing practices. Change toward lean culture, on the other hand, is driven by the extent of lean manufacturing practices. Further, we found that emphasizing process performance measures does not reduce emphasis on results performance measures and emphasizing results performance measures leads to improved financial performance. Process and results measures are being used in tandem and value stream costing has not replaced traditional accounting. The results of our study provide important insights for managers of companies engaged in lean transformation and for academics who teach or research lean accounting.

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Article
Publication date: 1 May 1980

David Ray, John Gattorna and Mike Allen

Preface The functions of business divide into several areas and the general focus of this book is on one of the most important although least understood of…

Abstract

Preface The functions of business divide into several areas and the general focus of this book is on one of the most important although least understood of these—DISTRIBUTION. The particular focus is on reviewing current practice in distribution costing and on attempting to push the frontiers back a little by suggesting some new approaches to overcome previously defined shortcomings.

Details

International Journal of Physical Distribution & Materials Management, vol. 10 no. 5/6
Type: Research Article
ISSN: 0269-8218

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Article
Publication date: 3 July 2017

Orhan Akisik and Graham Gal

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social…

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3908

Abstract

Purpose

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social responsibility (CSR) reports and assurance on the quality of internal controls as value determinant in their decisions, and how their decisions influence financial performance through the halo effect of these reports.

Design/methodology/approach

Using Compustat North America and Global Reporting Initiative data, the authors used first-order autoregressive models over the period from 2006 to 2012.

Findings

The results indicate that the impacts of customers and employees on financial performance are influenced by third party-reviewed CSR reports and effective internal control. Moreover, it is found that the third party-reviewed CSR reports and effective internal control enable the persistence of financial performance.

Social implications

The findings have implications for stakeholders in terms of third party-reviewed CSR reports and effective internal control. The findings are important due to the influence that these stakeholders (customers and employees) have on the financial performance of firms and the impact that CSR actions can have on society as a whole.

Originality/value

To the authors' knowledge, this is the first study that contributes to the literature by demonstrating that information about third party-reviewed CSR reports and internal control reviews may influence the perceptions of firms by two primary stakeholders – customers and employees.

Details

Sustainability Accounting, Management and Policy Journal, vol. 8 no. 3
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 1 June 2015

Ali A. Al-Thuneibat, Awad S. Al-Rehaily and Yousef A. Basodan

This paper aims to investigate the compliance of Saudi shareholding companies with the requirements of internal control as set by the Saudi standard on internal control

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2888

Abstract

Purpose

This paper aims to investigate the compliance of Saudi shareholding companies with the requirements of internal control as set by the Saudi standard on internal control and its impact on the profitability of these companies.

Design/methodology/approach

A questionnaire was used to collect data about the compliance with internal control requirements, and four measures of profitability including earnings per share (EPS), return on assets (ROA), return on equity (ROE) and profit margin (PM) for profitability were calculated using data from the financial statements of these companies. Then, Multiple Regression and t-test were used to analyze the data and test the hypotheses.

Findings

The results of the study revealed that the degree of compliance with all components of internal control is very high. It also appears from the analysis that the effect of internal control and its components on ROA and ROE is significant and positive, while the effect on EPS and PM is positive but statistically insignificant.

Practical implications

Corporate managements should review the effectiveness of the implementation of internal control requirements, especially those related to control environment, information and communication and monitoring.

Social implications

The findings of the study shed light on the relevance of internal control systems of the Saudi shareholding companies in improving the financial performance of the these companies, which is expected to help in safeguarding the interests of all interest groups and improve the society’s well-being.

Originality/value

The paper provides new evidence about the relationship between internal control and profitability in the Saudi Arabian environment. The findings of the study add good contribution to the literature because they direct our attention to the expected effect of the environment on the relationship between internal control and performance. The results may suggest that there is a need to expand this study using other methodologies to delve into the depths and understand this phenomenon within its context.

Details

International Journal of Commerce and Management, vol. 25 no. 2
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 1 August 1998

Edward Olowo‐Okere and Cyril Tomkins

A classic paper on the development of governmental financial control systems argues that such developments occur within the framework of a three‐stage model of evolution…

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2277

Abstract

A classic paper on the development of governmental financial control systems argues that such developments occur within the framework of a three‐stage model of evolution. This paper examines the validity of Dean’s model of evolution and argues that the model represents such a general level of historical description that a much more comprehensive examination of historical and current context is required if the past development of current systems and the design of future changes in those systems are to be properly understood. Evidence to support this claim is provided in the form of summary evidence based on an exhaustive inquiry into changes in both the UK and Nigerian governmental financial control systems over the last 35 years. This leads to suggestions that a model based on evolution and experimentation in response to contextual changes offers a better route to future research and improved practice.

Details

Accounting, Auditing & Accountability Journal, vol. 11 no. 3
Type: Research Article
ISSN: 0951-3574

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