It is difficult to free fools from the chains they revere.

–Voltaire (1767)

INTRODUCTION

For decades management accountants have made substantial contributions to the practice, research, and teaching of business. Economists such as Holmstrom (1979), Holmstrom and Milgrom (1991), and Jensen and Meckling (1976) identified agency problems that could exist between the firm and its owners, discussed the informativeness of signals of managerial effort, and the optimal use of these signals in contracting. Management accountants calibrated the properties of the signals, identified optimal weighting schemes for the signals, determined the relative values of signals in contracts, and assessed the difficulty in designing goal congruent systems using these signals (Banker and Datar 1989; Feltham and Xie 1994; Datar, Kulp, and Lambert 2001). Terms such as “controllability,” “congruence,” and “balance,” which form the bedrock of modern accounting and control systems, were first discoursed in the management accounting literature. It is practically impossible to think of a major corporation that does not have a Balanced Scorecard (Kaplan and Norton 1992). Topics such as Activity Based Costing (ABC), Time Driven ABC, Customer Lifetime Value, Capacity Cost Allocation, Target Costing, and the Balanced Scorecard, are the staples of undergraduate, master's, and M.B.A. curricula throughout the world.

Privately however, management accountants appear to have had two damaging hobbies—self-flagellation, and exchanging doomsday predictions. The same people who will laugh when told that a Zombie apocalypse is imminent have no trouble declaring (almost triumphantly) that the end of management accounting is within sight. The result is that we scare away the young, further damaging our dwindling numbers.

Little respect is accorded to a discipline that insists on endless debates about its own theoretical and methodological boundaries. We have no trouble teaching our undergraduate or graduate students that management accounting “measures, analyzes, and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization” (Horngren, Datar, and Rajan 2012, 4), or that “A fundamental purpose of managerial accounting is to enhance firm value by ensuring the effective and efficient use of scarce resources” (Sprinkle and Williamson 2007, 415).

What is it about the aforementioned definitions that makes it so difficult for us to reach closure on what is and what is not management accounting? These definitions are broad and give us license to study a variety of topics using a variety of methods—is this freedom stifling? Do we not agree that “In fact, it is not too great an exaggeration to say that management accounting and control systems are so important and ubiquitous today that if accountants and information people wrapped up their systems and took them home, the whole process of producing society's material goods and services along with the governance of social order would grind to a standstill” (Macintosh 1994, 1)?

I suspect that the only problem that we have is a lack of self-esteem as management accountants. I am not sure if this lack of self-esteem arises because of nature or nurture. Do people with poor self-esteem self-select into management accounting? Or do the established scholars in the field do little to nurture a feeling of self-worth in the young? Regardless, I cannot help getting the feeling that it is because of deep-rooted feelings of inadequacy that in public we accuse the nonmanagerial accountants of excluding us or ignoring us, but in the privacy of our “blind reviews,” and departmental curriculum, and other meetings, we are the first to lend vocal support to the chant of “Kill the pig.”1

Let me offer some evidence.

EVIDENCE OFFERED BY DOOMSDAY PREDICTORS

Evidence 1: The Management Accounting Content in M.B.A. Programs Is Reducing

My assessment is that management accounting does seem to be exiting from the core M.B.A. curriculum in some schools, based on informal surveys of the top 50 M.B.A. programs. It also seems to be the case that the curriculum space accorded to topics such as financial statements analysis or business analytics is increasing.

But wait—I have three questions: First, who exactly are making these curriculum decisions? Are management accountants less likely to be deans/associate deans/department chairs/curriculum committee chairs, etc.? An informal Google search reveals that management accountants are not at all underrepresented in positions of power in business schools; indeed several of the Big-10 universities', as well as highly ranked business schools', associate deans and accounting department chairs would not have any trouble labeling themselves as management accountants. So, why then are they not putting up a good fight on behalf of inclusion of management accounting in the core curriculum? I know from my experience that if I offer evidence in support of including a topic in the M.B.A. or undergraduate curriculum, it is given serious consideration in my department. While some skepticism of our research is unarguably healthy, if we are completely populated by nonbelievers, even an optimist like me cannot fathom any future for management accounting.

Second, why can we teach not financial statement analysis (FSA) or business analytics, and embellish it with a managerial flavor? According to Subramanyam and Wild (2013), Financial Statement Analysis (FSA) is “the application of analytical tools and techniques to general-purpose financial statements and related data to derive estimates and inferences useful in business analysis.” Why is FSA not a teaching option for management accountants? Fundamentally, it involves decision making with accounting information, which is in our sandbox.

Finally, I keep hearing that management accounting teaching slots are being filled by faculty who do financial accounting research. Frankly, this befuddles me. Is financial accounting not that subset of accounting that deals with the preparation, reporting, and interpretation of financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP), or similar regulatory standards? Therefore, if there is one faculty slot, and the immediate teaching need is in management accounting, why would we hire a financial accounting researcher? In fact, should we not be seeing the opposite trend where we increasingly hire management accountants to teach financial accounting? Most administrators that I have interacted with believe in the notion of flexible teaching capacity. Management accountants provide flexible capacity because they are well equipped to teach both financial and management accounting.2

Evidence 2: Journals like JAR and JAE Do Not Accept Management Accounting

One of the distinguished panelists in this session (Salterio 2015) points out that two of our eminent accounting journals, the Journal of Accounting Research (JAR), and Journal of Accounting & Economics (JAE) do not publish management accounting topics. Salterio (2015, Table 1) lists that one management accounting article was published in each of these two aforementioned journals between 2010 and 2013. I was reasonably startled by this revelation and explored it further. First, I looked at Salterio's (2015) definition of what is included and what is excluded from the definition of management accounting. Salterio (2015) first states, “I view management accounting research as producing information for internal decision makers in an organization (e.g., Atkinson et al. 1997).” This is not an unacceptable definition and I have no quibbles with it. However, the article goes on to state, “Hence, I do not include as management accounting research, studies that have been written by those who consider themselves as management accounting researchers but who publish studies focused on how information affects market participants. For example, much of what is considered executive compensation research (a management accounting topic in principle) examines the effects of disclosures about executive compensation on market participants, not internal decision makers” (Salterio 2015).

TABLE 1

Management Accounting Articles Published during the Period 2010–2013

Management Accounting Articles Published during the Period 2010–2013
Management Accounting Articles Published during the Period 2010–2013

I have significant trouble excluding any issue related to executive compensation from management accounting research. Indeed, executive compensation, whether it is used as (1) a control system to mitigate moral hazard problems, (2) as a promotion and sorting device, or (3) to attract and retain talent (i.e., to mitigate adverse selection problems), is fundamentally a management accounting topic. Considerable research has shown that the properties of performance measures, the balance between financial and nonfinancial measures, organizational structure such as centralization and decentralization, and the availability and quality of other monitoring mechanisms, influence compensation. If market participants react to executive compensation plans, then would that not be a signal that the market cares how firms motivate their managers? Is market reaction to executive compensation therefore not indicative of the value of internal accounting and control systems?

I believe that such a restrictive definition of management accounting hurts us as a profession and confuses our colleagues in other accounting disciplines. I doubt that there are many financial accountants who will be unwilling to provide membership into their club for researchers working on a variety of topics such as: the impact of financial reporting and disclosure on stock prices; the use of accounting information in contracting in debt, labor, supply, and other markets; the real effects of financial reporting and disclosure; the economics of regulation of financial reporting and disclosure; bank regulation; international differences in financial reporting and the role of reporting standards in international capital markets; the political economy of accounting standard setting; and the effect of male hormones on earnings management.3 We need to consider whether we are imposing excessive restrictions when we define what is and what is not management accounting. A restrictive club always has fewer members and less overall impact.

Using the Sprinkle and Williamson (2007) definition of management accounting as stated earlier, I re-examined the JAR and JAE publications that appeared during 2010–2013 and was heartened to note that there were 16 articles that appeared in JAR and five in JAE that I would be comfortable classifying as mainstream management accounting (Table 1). Is management accounting underrepresented in many of our journals? Absolutely!4 Is it close to becoming extinct in these other journals? Not really.

Evidence 3: JMAR Does Not Add Any Value

Few people will deny that the “value” of a journal or an article is hard to assess. One popular metric is the Social Sciences Citation Index (SSCI). Unfortunately, JMAR is not included in SSCI; therefore, it is not possible to assess JMAR's impact using the SSCI metric. I conducted an examination of the number of Google Scholar™ citations for the top three articles published since 2000 in our eight major journals (AOS, CAR, JAE, JAR, JMAR, MAR, and TAR). The results are provided in Table 2. A heartening conclusion from the results in Table 2 is that the lack of SSCI inclusion does not appear to hurt JMAR in terms of its impact.5

TABLE 2

Citation Analysis of Articles Published during the Period 2000–2014

Citation Analysis of Articles Published during the Period 2000–2014
Citation Analysis of Articles Published during the Period 2000–2014

Taking a decidedly unscientific approach, I also looked at the lead article published in the latest issue of each of these eight journals. The results are provided in Table 3. It can be concluded from the results that JMAR articles are predominantly being cited outside the JMAR, relative to the other journals (with the exception of the Review of Accounting Studies). If we assume the “impact” of a journal is also a function of how much it contributes to the progress of scientific inquiry in other journals, then the citation count of other journals has to be calibrated downward to adjust for self-references.

TABLE 3

Self-Referential Percentage in Journal Articles

Self-Referential Percentage in Journal Articles
Self-Referential Percentage in Journal Articles

Based on my interpretation of Table 2, I believe that any conclusion about the impact of JMAR needs to be positioned in the context of the impact of at least four of the other accounting journals: AOS, CAR, MAR, and RAST. Furthermore, any conclusion about the impact of JMAR also has to open a dialogue regarding the impact of JAE and JAR to audiences beyond these two journals, i.e., after controlling for the self-referential tendency of these journals.

BUILDING A BRIDGE TO A NICHE?

As it does Labro (2015), it annoys me when people refer to management accounting as a “niche” area and a journal whose objective is to publish management accounting research as a “niche” journal. Many years ago, when I was a Ph.D. student, I was under the impression that a majority of the community of scholars that studied organizations (i.e., scholars in business, economics, and other associated fields), would not object to Simon's (2000, 751) observation that “the vast bulk of our economy's activity takes place within the walls of individual large business corporations, not in markets” and that our goal as researchers should be to understand the factors that provide “organizations' [sic] the ability to coordinate complex activities efficiently, and at far higher levels than markets can attain.” I have trouble therefore in assigning “mainstream” status to journals that primarily study the role of regulated and aggregated accounting information in markets and “niche” status to journals that primarily study the coordination of activities within the organization.

Another issue that I must quibble with, and unfortunately I hear it far too often, is the notion of “building bridges.” According to the Oxford dictionary, a bridge is “A structure carrying a road, path, railroad, or canal across a river, ravine, road, railroad, or other obstacle.” Crossing a bridge is therefore necessary when (1) a destination is away from the current point of the traveler, and (2) there is an obstacle in between. I do not see why management accountants need to build a bridge to connect to other accounting areas when we are already co-located in the same premises.

FUTURE DIRECTIONS FOR MANAGEMENT ACCOUNTING RESEARCH

The panel has provided ample food for thought. Shields (2015) provides an excellent summary of management accounting topics where we have established knowledge. I believe that the Shields (2015) summary misses two topics, which are likely to be crucial, especially in the design of accounting and control systems for the new generation of companies.

Cost Behavior

Regardless of whether we gain or lose ground to operations, finance, or marketing researchers (Bloomfield 2015; Labro 2015), we will always have cost accounting. A heartening trend is that a solid body of accounting research has emerged in the area of cost behavior. A hallmark of this area is that it uses archival, analytical, field, and experimental methods to examine the various aspects of cost as described below:

  1. Demand Uncertainty: Analytical evidence suggests that when there is demand uncertainty, firms balance the sunk cost of idle capacity with the higher cost of procuring capacity resources on short notice, which influences their cost functions (Banker and Hughes 1994; Balachandran, Balakrishnan, and Sivaramakrishnan 1997; Balakrishnan and Sivaramakrishnan 2002; Göx 2002). Research in this area finds evidence that under conditions of demand uncertainty, accounting signals can provide sufficient information about the economic benefits associated with product planning and capacity investment decisions. These decisions have major implications for cost behavior, which has been calibrated in the literature.

  2. Cost Structure: Cost structure has implications for firm performance. A firm that has a larger proportion of fixed costs arising from committed resources is exposed to higher risk of being unable to break even (Horngren et al. 2012). Recent studies have explored the drivers and outcomes of various types of cost structures. For example, Banker, Byzalov, and Plehn-Dujowich (2014) provide analytical and empirical evidence that higher demand uncertainty is associated with a less elastic short-run cost structure. Holzhacker, Krishnan, and Mahlendorf (2015b) show that firms are likely to alter resource procurement choices related to outsourcing, leasing equipment, and hiring contract labor to increase cost elasticity in response to demand uncertainty and financial risk.

  3. Cost Asymmetry: Research using data from a variety of industries finds robust evidence of a differential response of cost to decreases in volume relative to increases in volume. This asymmetry (labeled cost stickiness) was first documented with SG&A costs (Anderson, Banker, and Janakiraman 2003) and subsequently in operating costs (Calleja, Steliaros, and Thomas 2006). Research has examined the drivers and moderators of sticky costs such as regulation and ownership (Holzhacker et al. 2015a), capacity utilization (Balakrishnan, Peterson, and Soderstrom 2004), managerial incentives to manage earnings (Dierynck, Landsman, and Renders 2012), earnings targets (Kama and Weiss 2013), the strategic importance of the cost (Balakrishnan and Gruca 2008), and corporate governance (Chen, Lu, and Sougiannis 2012). Weiss (2010) finds that sticky costs have implications for analyst forecasts.6

  4. Regulation: Evidence indicates that substantial costs of regulatory compliance can be hidden in other accounts, especially if firms use traditional, volume-based allocation systems instead of refined allocation systems (Joshi, Krishnan, and Lave 2001). Empirical research also finds that firms attempt to change their firms' cost structures in response to regulation. For example, Kallapur and Eldenburg (2005) find that Washington state hospitals increased their share of variable costs to total cost in response to increased operating risk arising from a change in regulation from cost-plus to fixed price. Holzhacker et al. (2015a) find that fixed-price regulation influences German hospitals to increase the elasticity and reduce the asymmetry of their cost structures.

Governance and Monitoring

Although there is little consensus on what it means and includes, and who should own or not own the topic, if we broadly define governance as “mechanisms to mitigate agency problems” (Bushman and Smith 2001, 238), then it would be fair to conclude that managerial accounting research has explored many nuances of the governance function.7 In the realm of CEO compensation, there is evidence of an association between enterprise complexity and CEO compensation that is moderated by the potential for the CEO to divert resources for private benefit (Black, Dikolli, and Dyreng 2014). Research has explored internal and external control mechanisms to mitigate CEO horizon problems. These mechanisms include adjusting the weights placed on various performance measures including financial, nonfinancial, and forward-looking measures (Bouwens and Van Lent 2007; Dikolli 2001; Cheng 2004; Dikolli, Kulp, and Sedatole 2013). Interestingly, the intensity of CEO monitoring systems decreases over the tenure of the CEO because periodic accounting signals reduce the uncertainty about the CEO's ability and effort propensity (Dikolli, Mayew, and Nanda 2014). In designing compensation contracts, it is important to note that career concerns of managers can also have unexpected externalities (Autrey, Dikolli, and Newman 2007), and that these career concerns may differ in nonprofit versus for-profit organizations. For example, nonprofits managers' incentives to influence external perceptions about their ability to raise revenues can reduce their focus on increasing efficiency and distort decisions away from the donors' best interests (Arya and Mittendorf 2015).

Monitoring mechanisms can also be included under the umbrella of governance because they essentially deal with agency problems. Campbell, Epstein, and Martinez-Jerez (2011) find evidence that determining the appropriate level of monitoring is tricky. One the one hand, tight monitoring systems can mitigate agency losses, on the other hand, these systems can reduce employee learning. Therefore, any management control system such as compensation and promotion systems designed to influence employee decision making and induce goal congruence should also take into account the consequences of these systems on employee learning (Campbell 2008). Monitoring by peers can also serve as a mechanism to mitigate incentive problems. Hannan, Towry, and Zhang (2013) examine the effect of mutual monitoring on effort in the presence of tournament-based compensation and find that mutual monitoring decreases (increases) effort when employees have a propensity to collude (compete).

It is important for research to examine monitoring and target-setting mechanisms for employees at middle and lower levels in the organization. The vast majority of employees in an organization are not CEOs. Indeed, the Fortune 500 Corporations have 500 CEOs, but over 26 million rank-and-file employees (http://money.cnn.com). Management accounting has made strides in this regard and studied topics like target setting, performance pay, and employee creativity. Interesting insights have emerged. Bouwens and Kroos (2011) study retail store managers and find evidence of real earnings management via a reduction in sales activity in response to target ratcheting. Webb, Williamson, and Zhang (2013) examine the tradeoff between target difficulty and employees' ability to identify production efficiencies. On the one hand, goal theory predicts that attaching performance pay to challenging targets can motivate productive effort; on the other hand, performance pay and challenging targets can hamper the discovery of production efficiencies that require outside-the-box thinking. Their results indicate that individuals with easier targets and fixed wages identified a greater number of production efficiencies but had lower productivity per production efficiency relative to individuals who had more difficult targets or performance pay. Research also indicates that fostering employee creativity via incentives may not be efficacious in some situations (Kachelmeier, Reichert, and Williamson 2008; Kachelmeier and Williamson 2010).

Governance of inter-firm transactions is also an area that has been explored in management accounting research (see Anderson and Sedatole [2003] for a review). Market-based controls such as formal contracts are not the only form of governance. Indeed, evidence indicates that firms use bureaucratic-based controls such as rules and standard operating procedures, as well as trust-based controls such as relational contracting, collaborative goal setting, and information sharing. Moreover, relational contracting can have consequences for transaction costs (Anderson, Glenn, and Sedatole 2000). Relational contracting and trust-based controls can also generate switching costs for outsourcing firms because of the need to reinvest in reestablishing controls to manage new suppliers. (Phua, Abernethy, and Lillis 2011). The design and structure of control systems when a firm is considering outsourcing, or in the presence of decentralization when transfer prices have to be determined, is an important topic for organizations, and management accountants have provided important insights into appropriate organizational design (Arya and Mittendorf 2010).

Accounting and Analytics

Big Data is the new reality and most companies must find a way to manage more data than they can potentially even fathom. Big Data is unstructured and not amenable to traditional methods. Our colleagues in information systems, marketing, and management have employed methods and techniques to study Big Data, and insights from their research are beginning to emerge. For example, Management Information Systems Quarterly (MISQ), Marketing Science, and Management Science announced special issues on data analytics, business analytics, and Big Data. Big Data is going to fundamentally alter the nature of decision making in organizations and markets, and companies in all industries are coming to realize that they are tech companies (PwC 2013). Information that took days or weeks to be transmitted to market participants is now diffused within a matter of seconds because of the power of social media and cloud computing. The sources of information are changing, the quantity of information is exploding, and types of information for decision making are fundamentally altering. The Millennials' approach to the trustworthiness of information sources is starkly different from the previous generations'. Instead of being behind the curve, it may be a good idea for accountants to jump into the fray and study these topics systematically.

CONCLUSIONS

Simon (1991, 42) remarks, “The economies of modern industrialized society can be more appropriately termed as organizational economies than market economies.” Management accounting is the study of decision making within the organization. Management accounting includes the study of how market participants use information produced by the firms' decision makers; therefore I echo Bloomfield (2015) that managerial accounting “includes financial accounting as a subfield, rather than the other way around,” and it “remains the one course every business student should take.” I also agree with Salterio (2015) that a journal that predominantly focuses on the study of how market participants react to financial accounting information can be legitimately considered a niche journal relative to a journal that studies the role of information in decision making within the organization.

How can we make certain that we continue to play a prominent role in the practice, research, and teaching of accounting? All of the panelists have provided excellent guidance in this regard. As Van der Stede (2015) states, we need to ensure that “we conduct properly executed academic studies on practice-relevant issues broadly conceived that yield potentially applicable insights.” He elucidates that this implies, “usable knowledge, as opposed to academically self-referential knowledge. Research for practice, rather than research as a practice. (Merchant and Van der Stede (2006).” This includes research that can be replicable as argued by Shields (2015), with the caveat that we must not hold replicability as a gold standard for acceptance of insights from a study. It is true that replicability assists in assessing generalizability. Further, the potential for replicability can act as an audit mechanism and provide checks and balances. However, attaching value judgments to easily replicable research as “good” and others as “not good” places field studies and studies that use proprietary data at a disadvantage relative to studies that use experimental and archival techniques. We must keep in mind the fact that many valuable insights into how accounting and control systems are designed, processed, adapted, and used in organizations have been generated using field and proprietary data.

Like Shields (2015), I am optimistic that the next generation of management accountants will be celebrating 50 years of JMAR with equal if not more fervor and gusto!

What is freedom of expression? Without the freedom to offend, it ceases to exist.

–Salman Rushdie (1981)

REFERENCES

REFERENCES
Anderson
,
M
.,
R
.
Banker
,
and
S
.
Janakiraman
.
2003
.
Are selling, general, and administrative costs “sticky”?
Journal of Accounting Research
41
:
47
63
.10.1111/1475-679X.00095
Anderson
,
S. W
.,
D
.
Glenn
,
and
K
.
Sedatole
.
2000
.
Sourcing parts of complex products: Evidence on transaction cost, high-powered incentives, and ex post opportunism
.
Accounting, Organizations and Society
25
(
8
):
723
–7
49
.10.1016/S0361-3682(00)00015-5
Anderson
,
S. W
.,
and
K. L.
Sedatole
.
2003
.
Management accounting for the extended enterprise: Performance management for strategic alliances and networked partners
.
In
Management Accounting in the Digital Economy
, edited by
A
.
Bhimani
.
London, U.K
.:
Oxford University Press
.
Arya
,
A
.,
and
B
.
Mittendorf
.
2010
.
Input markets and the strategic organization of the firm
.
Foundations and Trends in Accounting
5
:
1
97
.10.1561/1400000019
Arya
,
A
.,
and
B
.
Mittendorf
.
2015
.
Career concerns and accounting performance measures in nonprofit organizations
.
Accounting, Organizations and Society
(f
orthcoming)
.
Atkinson
,
A. A
.,
R
.
Balakrishnan
,
P
.
Booth
,
J. M
.
Cole
,
T
.
Groot
,
T
.
Malmi
,
H
.
Roberts
,
E
.
Uliana
,
and
A
.
Wu
.
1997
.
New directions in management accounting research
.
Journal of Management Accounting Research
9
:
79
108
.
Autrey
,
R. L
.,
S. S
.
Dikolli
,
and
D. P
.
Newman
.
2007
.
Career concerns and mandated disclosure
.
Journal of Accounting and Public Policy
26
(
5
):
527
554
.10.1016/j.jaccpubpol.2007.08.002
Balachandran
,
B
.,
R
.
Balakrishnan
,
and
K
.
Sivaramakrishnan
.
1997
.
On the efficiency of cost-based decision rules for capacity planning
.
The Accounting Review
72
:
599
619
.
Balakrishnan
,
R
.,
and
K
.
Sivaramakrishnan
.
2002
.
A critical overview of the use of full-cost data for planning and pricing
.
Journal of Management Accounting Research
14
:
3
31
.10.2308/jmar.2002.14.1.3
Balakrishnan
,
R
.,
M. J
.
Peterson
,
and
N. S
.
Soderstrom
.
2004
.
Does capacity utilization affect the “stickiness” of costs?
Journal of Accounting, Auditing & Finance
19
(
3
):
283
299
.
Balakrishnan
,
R
.,
and
T. S
.
Gruca
.
2008
.
Cost stickiness and core competency: A note
.
Contemporary Accounting Research
25
(
4
):
993
1006
.10.1506/car.25.4.2
Balakrishnan
,
R
.,
E
.
Labro
,
and
S
.
Soderstrom
.
2014
.
Cost structure and sticky costs
.
Journal of Management Accounting Research
26
(
2
):
91
116
.10.2308/jmar-50831
Banker
,
R. D
.,
and
S. M
.
Datar
.
1989
.
Sensitivity, precision, and linear aggregation of signals for performance evaluation
.
Journal of Accounting Research
27
:
21
39
.10.2307/2491205
Banker
,
R. D
.,
and
J. S
.
Hughes
.
1994
.
Product costing and pricing
.
The Accounting Review
69
(
3
):
479
494
.
Banker
,
R. D
.,
and
D
.
Byzalov
.
2014
.
Asymmetric cost behavior
.
Journal of Management Accounting Research
26
(
2
).10.2308/jmar-50846
Banker
,
R. D
.,
D
.
Byzalov
,
and
J. M
.
Plehn-Dujowich
.
2014
.
Demand uncertainty and cost behavior
.
The Accounting Review
89
(
3
):
839
865
.10.2308/accr-50661
Black
,
D. E
.,
S. S
.
Dikolli
,
and
S. D
.
Dyreng
.
2014
.
CEO pay-for-complexity and the risk of managerial diversion from multinational diversification
.
Contemporary Accounting Research
31
:
103
135
.10.1111/1911-3846.12024
Bloomfield
,
R. J
.
2015
.
Rethinking managerial reporting
.
Journal of Management Accounting Research
27
(
1
).
Bouwens
,
J
.,
and
L
.
Van Lent
.
2007
.
Assessing the performance of business unit managers
.
Journal of Accounting Research
45
(
4
):
667
697
.10.1111/j.1475-679X.2007.00251.x
Bouwens
,
J
.,
and
P
.
Kroos
.
2011
.
Target ratcheting and effort reduction
.
Journal of Accounting & Economics
51
(
1/2
):
171
185
.10.1016/j.jacceco.2010.07.002
Bushman
,
R. M
.,
and
A. J
.
Smith
.
2001
.
Financial accounting information and corporate governance
.
Journal of Accounting & Economics
32
(
1/3
):
237
333
.10.1016/S0165-4101(01)00027-1
Calleja
,
K
.,
M
.
Steliaros
,
and
D
.
Thomas
.
2006
.
A note on cost stickiness: Some international comparisons
.
Management Accounting Research
17
(
2
):
127
140
.10.1016/j.mar.2006.02.001
Campbell
,
D
.
2008
.
Nonfinancial performance measures and promotion-based incentives
.
Journal of Accounting Research
46
:
297
332
.10.1111/j.1475-679X.2008.00275.x
Campbell
,
D
.,
M. J
.
Epstein
,
and
F. A
.
Martinez-Jerez
.
2011
.
The learning effects of monitoring
.
The Accounting Review
86
(
6
):
1909
1934
.10.2308/accr-10129
Chen
,
C. X
.,
H
.
Lu
,
and
T
.
Sougiannis
.
2012
.
The agency problem, corporate governance, and the asymmetrical behavior of selling, general, and administrative costs
.
Contemporary Accounting Research
29
:
252
282
.10.1111/j.1911-3846.2011.01094.x
Cheng
,
S
.
2004
.
R&D expenditures and CEO compensation
.
The Accounting Review
79
(
2
):
305
328
.10.2308/accr.2004.79.2.305
Datar
,
S
.,
S. S
.,
Kulp
,
and
R
.
Lambert
.
2001
.
Balancing performance measures
.
Journal of Accounting Research
29
(
1
):
75
92
.10.1111/1475-679X.00004
Dierynck
,
B
.,
W. R
.
Landsman
,
and
A
.
Renders
.
2012
.
Do managerial incentives drive cost behavior? Evidence about the role of the zero earnings benchmark for labor cost behavior in Belgian private firms
.
The Accounting Review
87
(
4
):
1219
1246
.10.2308/accr-50153
Dikolli
,
S. S
.
2001
.
Agent employment horizons and the contracting demand for forward-looking performance measures
.
Journal of Accounting Research
39
(
3
):
467
480
.10.1111/1475-679X.00024
Dikolli
,
S. S
.,
S. L
.
Kulp
,
and
K. L
.
Sedatole
.
2013
.
The use of contract adjustments to lengthen the CEO horizon in the presence of internal and external monitoring
.
Journal of Management Accounting Research
25
(
1
):
199
229
.10.2308/jmar-50395
Dikolli
,
S. S
.,
W. J
.
Mayew
,
and
D
.
Nanda
.
2014
.
CEO tenure and the performance-turnover relation
.
Review of Accounting Studies
19
(
1
):
281
327
.10.1007/s11142-013-9247-6
Feltham
,
G. A
.,
and
J
.
Xie
.
1994
.
Performance measure congruity and diversity in multi-task principal/agent relations
.
The Accounting Review
69
(
3
):
429
453
.
Golding
,
W
.
1954
.
Lord of the Flies
.
London, U.K
.:
Faber and Faber
.
Göx
,
R
.
2002
.
Capacity planning and pricing under uncertainty
.
Journal of Management Accounting Research
14
:
59
.10.2308/jmar.2002.14.1.59
Hannan
,
R. L
.,
K. L
.
Towry
,
and
Y
.
Zhang
.
2013
.
Turning up the volume: An experimental investigation of the role of mutual monitoring in tournaments
.
Contemporary Accounting Research
30
(
4
):
1401
1426
.10.1111/1911-3846.12006
Holmstrom
,
B
.
1979
.
Moral hazard and observability
.
Bell Journal of Economics
10
(
1
):
74
91
.10.2307/3003320
Holmstrom
,
B
.,
and
P
.
Milgrom
.
1991
.
Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design
.
Journal of Law, Economics and Organization
7
(
2
):
24
53
.10.1093/jleo/7.special_issue.24
Horngren
,
C
.,
S
.
Datar
,
and
M
.
Rajan
.
2012
.
Cost Accounting: A Managerial Emphasis. 14th edition
.
Upper Saddle River, NJ
:
Prentice Hall
.
Holzhacker
,
M
.,
R
.
Krishnan
,
and
M
.
Mahlendorf
.
2015
a
.
The impact of changes in regulation on cost behavior
.
Contemporary Accounting Research
(f
orthcoming)
.
Holzhacker
,
M
.,
R
.
Krishnan
,
and
M
.
Mahlendorf
.
2015
b
.
Unraveling the black box of cost behavior: An empirical investigation of risk drivers, managerial resource procurement, and cost elasticity
.
The Accounting Review
(f
orthcoming)
.
Jensen
,
M. C
.,
and
W. H
.
Meckling
.
1976
.
Theory of the firm: Managerial behavior, agency costs, and ownership structure
.
Journal of Financial Economics
4
:
469
506
.
Joshi
,
S
.,
R
.
Krishnan
,
and
L
.
Lave
.
2001
.
Estimating the hidden costs of environmental regulation
.
The Accounting Review
76
(
2
):
171
198
.10.2308/accr.2001.76.2.171
Kachelmeier
,
S. J
.,
B
.
Reichert
,
and
M. G
.
Williamson
.
2008
.
Measuring and motivating quantity, creativity, or both
.
Journal of Accounting Research
46
:
341
373
.10.1111/j.1475-679X.2008.00277.x
Kachelmeier
,
S. J
.,
and
M. G
.
Williamson
.
2010
.
Attracting creativity: The initial and aggregate effects of contract section on creativity-weighted productivity
.
The Accounting Review
85
:
1669
1691
.10.2308/accr.2010.85.5.1669
Kallapur
,
S
.,
and
L
.
Eldenburg
.
2005
.
Uncertainty, real options, and cost behavior: Evidence from Washington state hospitals
.
Journal of Accounting Research
43
:
735
752
.10.1111/j.1475-679X.2005.00188.x
Kama
,
I
.,
and
D
.
Weiss
.
2013
.
Do earnings targets and managerial incentives affect sticky costs?
Journal of Accounting Research
51
(
1
):
201
224
.10.1111/j.1475-679X.2012.00471.x
Kaplan
,
R. S
.,
and
D. P
.
Norton
.
1992
.
The balanced scorecard—Measures that drive performance
.
Harvard Business Review
(
January-February
):
71
79
.
Labro
,
E
.
2015
.
Hobby horses ridden
.
Journal of Management Accounting Research
27
(
1
).
Macintosh
,
N. B
.
1994
.
Management Accounting and Control Systems: An Organizational and Behavioral Approach
.
New York, NY
:
John Wiley & Sons
.
Merchant
,
K. A
.,
and
W
.
Van der Stede
.
2006
.
Field-based research in accounting: Accomplishments and prospects
.
Behavioral Research in Accounting
18
(
1
):
117
134
.10.2308/bria.2006.18.1.117
Orwell
,
G
.
1946
.
Animal Farm
.
New York, NY
:
Harcourt, Brace & Co
.
Phua
,
Y. S
.,
M. A
.
Abernethy
,
and
A. M
.
Lillis
.
2011
.
Controls as exit barriers in multiperiod outsourcing arrangements
.
The Accounting Review
86
:
1795
1834
.10.2308/accr-10100
PwC
.
2013
.
The New Digital Ecosystem Reality: Nine Trends Rewriting the Rules of Business
.
Salterio
,
S. E
.
2015
.
Barriers to knowledge creation in management accounting research
.
Journal of Management Accounting Research
27
(
1
).
Shields
,
M. D
.
2015
.
Established management accounting knowledge
.
Journal of Management Accounting Research
27
(
1
).
Shust
,
E
.,
and
D
.
Weiss
.
2014
.
Discussion of asymmetric cost behavior—Sticky costs: Expenses versus cash flows
.
Journal of Management Accounting Research
26
(
2
):
81
90
.10.2308/jmar-10406
Simon
,
H. A
.
2000
.
Public administration in today's world of organizations and markets
.
Political Science and Politics
33
(
4
):
749
756
.10.1017/S1049096500061953
Simon
,
H. A
.
1991
.
Organizations and markets
.
Journal of Economic Perspectives
5
(
2
):
25
44
.10.1257/jep.5.2.25
Sprinkle
,
G. B
.,
and
M. G
.
Williamson
.
2007
.
Experimental research in managerial accounting
.
In
Handbook of Management Accounting Research
,
edited by
Hopwood
,
A
.,
and
M
.
Shields
.
New York, NY
:
Elsevier Science
.
Subramanyam
,
K. R
.,
and
J. J
.
Wild
.
2013
.
Financial Statement Analysis. 13th edition
.
New York, NY
:
McGraw Hill
.
Webb
,
R. A
.,
M. G
.
Williamson
,
and
Y
.
Zhang
.
2013
.
Productivity-target difficulty, target-based pay, and outside-the-box thinking
.
The Accounting Review
88
(
4
):
1433
1457
.10.2308/accr-50436
Weiss
,
D
.
2010
.
Cost behavior and analysts' earnings forecasts
.
The Accounting Review
85
:
1441
1474
.10.2308/accr.2010.85.4.1441
Van der Stede
,
W. A
.
2015
.
Management accounting: Where from, where now, where to?
Journal of Management Accounting Research
27
(
1
).
1

Although it is required reading in most high school curricula throughout the world, it may not be a waste of time to re-read Lord of the Flies (Golding 1954) for a chilling reminder of the consequences of suspending individual judgment to the collective.

2

I hasten to add that I arrive at this conclusion not because I believe that management accountants are superior teachers or scholars. My deduction is merely based on the evidence that a majority, if not all accounting Ph.D.s have had substantially more exposure to financial than managerial accounting in their undergraduate, master's, and Ph.D. programs. Most undergraduate accounting programs in the U.S. and other countries have at least two required intermediate financial accounting courses for one course each in managerial accounting, audit, and tax. Moreover, the intermediate financial accounting courses are typically prerequisites to the managerial accounting, audit, and tax courses. One logical interpretation of this sequencing is that the financial accounting courses are the building blocks for other courses that involve decision making with accounting information.

3

All but the last item on this list of topics was adapted from the “Aims and Scope” section of JAR. The last item was the topic of a paper published in JAR in 2014.

4

A stark fact that leaped out of this analysis was that JAE had no managerial publications during the period that used experimental, survey, or case methods. During the same period the American Economic Review (AER) published numerous articles using these aforementioned methods. Indeed, in AER, there were more studies published that used experimental techniques than archival techniques. I think it is time that some of us accountants revisited the belief that while “all methods are equal, some methods are more equal than others” (apologies to Orwell [1946]).

5

On the other hand, management accountants who eschew citing relevant papers from JMAR do hurt JMAR in terms of impact.

6

For a debate on empirical testing to detect sticky costs from other types of cost behavior see Balakrishnan, Labro, and Soderstrom (2014); Banker and Byzalov (2014); and Shust and Weiss (2014).

7

Although the Bushman and Smith (2001) study is titled “Financial Accounting Information and Corporate Governance,” it does not trouble me to classify their definition of governance as relevant to management accountants. Financial accounting signals are routinely used by firms, along with other signals, in the design and implementation of budgeting, control, and reporting systems. Financial accounting signals are the products of management accounting systems, which generate, measure, and aggregate signals for internal and external use.

Author notes

I thank Shane Dikolli, Satish Joshi, Anne Lillis, Brian Mittendorf, and Michael Williamson for their helpful comments.

Competing Interests

The views expressed in this paper are those of the author and do not reflect an official position of the American Accounting Association (AAA) or the AAA's Management Accounting Section.