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Article
Publication date: 12 March 2018

John Dumay and Jim Rooney

While intellectual capital (IC) accounting research has concentrated on private enterprise, it is also germane to the public sector given pressures to create government…

Abstract

Purpose

While intellectual capital (IC) accounting research has concentrated on private enterprise, it is also germane to the public sector given pressures to create government business enterprises. However, despite the impetus for change, IC accounting is not a widespread practice in any sector. To understand the paradox, the purpose of this paper is to present a longitudinal narrative of IC accounting practice at an Australian public sector organisation.

Design/methodology/approach

Bourdieu’s theory of practice is adopted in a single longitudinal case study to examine orthodox and heterodox accounting processes along with the resultant “field of opinion” created by IC discourse.

Findings

For an innovation such as IC accounting to be utilised, the social capital associated with it must be able to overcome the symbolic violence of orthodox financial accounting practices. In essence, IC exists alongside accounting and does not replace it. However, not all actors learn about and adopt IC in the same way. Therefore, organisations cannot learn if the actors themselves cannot see how IC should not replace accounting but exists alongside it.

Practical implications

On reflection, the study supports a conclusion that IC should not be viewed as a heretical accounting practice. Rather, it serves discrete purposes that can be utilised by academics and practitioners to achieve particular ends rather than viewed as an alternative form of accounting.

Originality/value

With increasing awareness of accounting of the importance of intangible resources in the “new economy”, this study emphasises the teleological aims of IC as a complementary accounting technology.

Details

Journal of Intellectual Capital, vol. 19 no. 2
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 17 April 2019

Jim Rooney and Yiyuan Cao

Firms in the early stage of their organisational lifecycle (ESFs) are subject to concerns founded on a requirement for strategic flexibility, prompting engagement in…

Abstract

Purpose

Firms in the early stage of their organisational lifecycle (ESFs) are subject to concerns founded on a requirement for strategic flexibility, prompting engagement in inter-organisational relationships such as outsourcing. However, studies of the management control dynamics of these relationships are rare. This paper aims to respond by empirically examining the influence of ESF managers on the ongoing management control of such relationships.

Design/methodology/approach

A single outsourcing case study is utilised to provide evidence in examining a multi-theoretical framework that adopts a complex adaptive system (CAS) perspective as a qualitative analytical framework, along with the existing accounting theory on control adoption.

Findings

Focused on management concerns with tensions between inter-organisational control and strategic flexibility, this paper identifies reasons for the adoption of management controls by an ESF. The inter-organisational system explored in this paper emphasises the importance of adopting a holistic epistemology in understanding changes in control adoption.

Research limitations/implications

This paper extends current theoretical perspectives on control adoption to consider the inter-organisational control concerns of ESF managers.

Practical implications

The insights identified in this paper provide a systemic framework to identify potential organisational and environmental influences on control problems, emphasising environmental co-evolution rather than achievement of ideal equilibrium states.

Originality/value

The intended contribution is to extend the management control literature to consider the effect of organisational lifecycle on the adoption of new inter-organisational management controls in the wake of ongoing trade-off between competing inter-organisational requirements.

Details

Meditari Accountancy Research, vol. 27 no. 2
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 2 February 2015

Jim Rooney and Suresh Cuganesan

The purpose of this study is to examine how managers in financial institutions satisfy themselves of the effectiveness of risk mitigation strategy and management control…

Abstract

Purpose

The purpose of this study is to examine how managers in financial institutions satisfy themselves of the effectiveness of risk mitigation strategy and management control. It studies the co-opting of accounting tools within a single financial institution case study, examining the recursive and emergent characteristics of risk management practice.

Design/methodology/approach

Adopting a field study approach within the strategy-as-practice perspective, the paper provides insights into the role of actor perceptions of risk and accounting as a calculative practice in the adaptive enactment of risk strategy.

Findings

Results highlight the interactions between risk management strategy, management controls and actor interests at Lehman Brothers. The actions and reactions of risk management decision-makers such as Executive Committee and Board members are examined to better understand the role of accounting and leadership.

Research limitations/implications

Results of this study may not be generalised beyond this single case study.

Practical implications

The paper emphasises that concern for the social relations and the performative interests of actors in a risk management network needs to be understood and considered in accounting research. It is argued that the market prices of tradable financial asset will continue to be opaque without these insights.

Originality/value

This study explores an under-researched topic in the accounting literature in examining how management controls are affected by and, in turn, affect risk strategising.

Details

Managerial Auditing Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

Abstract

Details

Managerial Auditing Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 January 2013

Abstract

Details

Managerial Auditing Journal, vol. 28 no. 2
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 October 1979

A Japanese idea for improving product quality in industry is starting to catch on in the UK. Other benefits from the scheme include savings in production costs, more job…

Abstract

A Japanese idea for improving product quality in industry is starting to catch on in the UK. Other benefits from the scheme include savings in production costs, more job satisfaction — and a potential boost in status for Britain's maligned factory foremen.

Details

Industrial Management, vol. 79 no. 10
Type: Research Article
ISSN: 0007-6929

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Article
Publication date: 2 February 2015

Kerri O’Donnell, Barry Hicks, John Streeter and Paul Shantapriyan

The purpose of this paper is to explore the increasing expectation against two concepts, information and process scepticism. In light of the Centro case judgement…

Abstract

Purpose

The purpose of this paper is to explore the increasing expectation against two concepts, information and process scepticism. In light of the Centro case judgement, directors’ decisions are held to increasing standards of due care and diligence.

Design/methodology/approach

This is a conceptual paper, drawing upon archival material, including statute law, case law, regulatory guidance material and media releases in Australasia. The authors review the statutory duty of care, skill and diligence expected of non-executive directors.

Findings

Whether a director has exercised an appropriate level of reasonable care and skill and/or due diligence has been a matter for the courts to decide. Such retrospective analysis leaves directors vulnerable to the uncertainty of whether their individual interpretation of diligence matches up to that of the presiding judge. The authors provide directors with a framework to apply scepticism to information and processes provided by those on whom the directors may rely.

Research limitations/implications

Two concepts are identified: reasonable reliance on others and the business judgement rule. The authors present arguments that challenge us to understand reasonable reliance, judgement and actions of directors in light of processing and information scepticism.

Practical implications

Directors do have a different role to that of auditors; incorporating scepticism can enable directors to fulfil their responsibility towards shareholders. By applying information and process scepticism, directors of companies can reduce the likelihood and magnitude of litigation costs and out-of-court settlements.

Originality/value

This paper provides a framework to apply scepticism to information and processes provided by people on whom the directors may rely.

Details

Managerial Auditing Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 2 February 2015

Ting Sun, Michael Alles and Miklos A. Vasarhelyi

The purpose of this paper is to analyze the hurdles, compared with that in the United States, for the implementation of Continuous Auditing in China. As a timely…

Abstract

Purpose

The purpose of this paper is to analyze the hurdles, compared with that in the United States, for the implementation of Continuous Auditing in China. As a timely, cost-saving and efficient auditing method, continuous auditing is being increasingly adopted throughout the world. However, while it is increasingly applied in the USA, continuous auditing is still in its infancy in China.

Design/methodology/approach

This paper compares and contrasts China and the USA in three important dimensions that determine the “economic architecture” of assurance: the business environment, the audit profession and technology.

Findings

The authors find that excessive government intervention in business, the lack of competition, independence of auditors, the support from management and the continuous auditing-specific regulations, as well as the technology gap between these two countries, are the main barriers for the implementation of continuous auditing in China.

Research limitations/implications

The findings of this paper provide better understanding of the drivers of continuous auditing adoption in the USA and the barriers toward doing so in China.

Practical implications

The term “continuous auditing” has never been formally introduced until the release of the draft of the Internal Control Audit Guide in 2011.

Originality/value

The paper highlights how technology by itself is not deterministic, but given the extraordinary rise in the Chinese economy in both its size and its sophistication, it has be to assumed that its “leapfrog” into parity if not outright leadership in continuous assurance is still a matter of “when” and not of “if”.

Details

Managerial Auditing Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 21 October 2013

John Dumay, Jim Rooney and Lisa Marini

The purpose of this paper is to respond to calls to research recognising impediments to innovation practice. The paper argues that decision-making preferences by…

Abstract

Purpose

The purpose of this paper is to respond to calls to research recognising impediments to innovation practice. The paper argues that decision-making preferences by risk-averse managers are a key impediment to the organisational support required for the commercialisation of new ideas, by exploring the relationship between forms of intellectual capital (IC) and innovation. As a result, categories are derived that contrast with the current grand theory that IC drives innovative practices.

Design/methodology/approach

The paper critically examines cross-sectional empirical data gathered through semi-structured interviews with 27 Australian executive managers from leading Australian companies and the public sector. These interviews elicited narratives about successful and unsuccessful innovations where interviewees had significant involvement in the outcome. In all, 54 narratives of innovation from executive managers – 27 successes and 27 failures, were analysed using the repertory grid technique to unearth patterns about the process of innovation, especially in relation to the stability of the business environment and the need for innovation.

Findings

The paper finds that successful innovation in a context identified as demonstrating risk-averse decision-making behaviours requires different management approaches, depending on whether the innovation is radical, evolutionary or incremental. The paper discovers 12 different factors contributing to innovation processes and identifies those that are more likely to contribute to the success of innovative endeavours. From this the current grand theory that IC drives innovative practices is challenged by developing an IC-based differentiation theory of innovation practice.

Research limitations/implications

As always, the observations and conclusions reached are limited to the 27 interviews and the Australian context. Further, findings are based on the authors’ objective analysis. As with any qualitative study the authors also caution about generalising the findings, and as with any theory it should be used to develop insights into actions, rather than prescribing them.

Practical implications

For educators it highlights the need to teach students to critique innovation rather than accepting that all innovation is beneficial. For researchers it shows they must avoid success bias by investigating both successful and failed innovations, developing differentiation theories of innovation practice. The findings highlight how senior managers responsible for enabling and resourcing innovation need to develop skills for identifying the innovation type enabled, matching it to an appropriate strategic approach. Finally, for policy makers it shows how different forms of successful innovation require different approaches, and each can be encouraged, developed and enabled differently.

Originality/value

The paper is novel because it addresses the interaction and complexities of the different factors that enable successful innovation and possibly contribute to innovation failures, and the types of innovation relevant to each context. This approach is in contrast to the contemporary innovation literature, which tends to focus on successful radical innovation. As a result, the paper offers a more holistic view of the diverse and interrelated factors that impact innovation success and/or failure.

Details

Journal of Intellectual Capital, vol. 14 no. 4
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 26 July 2011

John Dumay and Jim Rooney

This paper seeks to examine the adage “If it can't be measured, it can't be managed” by presenting a case study of intellectual capital (IC) practice over six years at an…

Abstract

Purpose

This paper seeks to examine the adage “If it can't be measured, it can't be managed” by presenting a case study of intellectual capital (IC) practice over six years at an internationally recognised public sector IC leader – the Land and Property Authority of NSW (Lands).

Design/methodology/approach

The paper uses the case study method to examine critically over six years of research based on semi‐structured interviews and internal and external documents.

Originality/value

During this time Lands achieved national and international recognition for its IC management and reporting practices in the absence of a definitive set of IC measures. The authors show how Lands struggled with an inability to develop a specific set of IC measures to communicate its success, while still effectively communicating the impact of its IC practices through its annual reports and IC statements based on an ongoing narrative.

Findings

Lands demonstrated that it was able to meet the challenges associated with transitioning to a Government Business Enterprise through effectively managing IC resources, while also being dissatisfied with an inability to identify a set of concrete IC measures. Thus, the authors conclude from the evidence presented that it is possible to effectively implement IC practices without necessarily needing concrete IC measures. This is not because IC measures are not useful, but because Lands' IC reporting needs evolve based on the bespoke nature of its business, political expectations and changing business plans.

Research limitations/implications

As always, the observations and conclusions reached here are limited to the case of Lands and are based on the authors' objective analysis. Therefore, care should be taken in generalising any findings and this highlights the need to understand the IC context before applying the findings.

Originality/value

The conclusion highlights the struggle many organisations face when developing appropriate IC measures. While there appears to be a fixation on developing an “accounting for IC”, the authors advocate that the fixation is misplaced and the IC journey is better communicated narrating the story of how IC is mobilised. Doing so allows more focus on IC practices rather than on accounting. This opens the debate as to whether an accounting for IC can provide a solution, given that IC is more complex than developing an IC balance sheet.

Details

Journal of Intellectual Capital, vol. 12 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

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