Second, the review contributes to existing research by displaying first indications of the influence of professional associations and educational institutions on change processes of MAs by providing prevalent templates. Regarding the institutional context, there are strong professional bodies in the UK and the USA, whereas in countries such as Germany or France, there is a low degree of professionalization. Management accounting allows the control, the anticipation of problems, and the opening up of perspectives in companies this tool is very powerful in preparing accounting information to. Financial management is guided by several principles that the managers should adhere to in ensuring that the finances of a company are appropriately invested. 13 No. The globalisation of a profession: comparative management accounting in emerging and developed countries, Multiple identities and identity transition: implications for Hong Kong, International Journal of Intercultural Relations, Who is this We? Both cost accounting vs. management accounting help management make effective decisions. Not only the current identity, but also the desired identity frames the interpretations of MAs and they may support those changes, which are consistent with their desired identities. Of International Management, Vol. This review identified several external factors such as professional associations and educational institutions as well as organizational and individual factors that impact MAs identity and act as change drivers. 24-46. Thank you. Accordingly, case field studies show contradictory understandings between MAs and managers what business partnering means. (2014) illustrate that MAs perceived image within organizations influences their identification with the organization and the profession. 8 No. 187-197. By using more prestigious titles for the work of MAs, it is possible to disguise those activities which are perceived by MAs as low-prestige and thus demonstrate their added value. In the next step, we excluded all duplicates (816) and publications (1,882) containing no information about MAs changing identities and roles within the abstract. In total, 50 articles were published in peer-reviewed accounting journals, and only 14 within journals of other research fields (e.g. In line with that importance, the call for more effort to enhance knowledge on strategic management accounting has increased over the years. In order to achieve its goals, managerial accounting relies on a variety of different techniques, including the following: Margin analysis is primarily concerned with the incremental benefits of optimizing production. This data may include sales figures and pricing trends, production costs, customer satisfaction . Thehistorical datacaptured by managerial accounting shows the growth of the business, which is useful inforecasting. Following Massaro et al. (2001), Role Transitions in Organizational Life: An Identity-Based Perspective, Lawrence Erlbaum Associates, Mahwah, NJ. The primary function of management is to decide bout the future course of action. for only $11.00 $9.35/page. As most of the analyses concentrate on larger companies, more studies could focus on small and middle-sized companies to comply with the variety of organizations. External aspects such as professionalization, university education and research, legislation and compliance as well as the public image drive identity change. Management Accounting: Magazine for Chartered Management Accountants: 1: 1: Management Accounting Research: 3: A: 4,044: 3: 2: 1: 1: 7: Pacific Accounting Review: 1: 1: 1: Thus, possible conflicts already discussed in the 1980s are still emphasized, in particular the independence-involvement problem (Byrne and Pierce, 2007; Lambert and Sponem, 2012; Pierce and ODea, 2003). The existence of such external images influences how a group of professionals is regarded within the organization (Jrvinen, 2009; Morales and Lambert, 2013). Nowadays, MAs are esteemed because of their participation in decision-making processes, although they have concurrently internal control responsibilities. We take the opportunity in the conclusion of this work to perform a more high-level analysis of the topic of analysis. (1989), Careers, identities, and institutions: the legacy of the Chicago school of sociology, in Arthur, M.B., Hall, D.T. Thus, because of a high image, they may identify more intensely with the organization and its predominant values and norms. Kielhofner, G. (2002), A Model of Human Occupation: theory and Application, Lippincott Williams and Wilkins, Philadelphia, PA. Kreiner, G.E., Hollensbe, E.C. 30-45. *Vaivio, J. and Kokko, T. (2006), Counting big: re-examining the concept of the bean counter controller, Liiketaloudellinen Aikakauskirja LTA Finnish Journal of Business Economics, Vol. Alvesson, M. and Willmott, H. (2002), Identity regulation as organizational control: producing the appropriate individual, Journal of Management Studies, Vol. 3, pp. (2010), How management accountants' cognitive style and role involvement combine to affect the effort devoted to initiating change, Abacus, Vol. 44 No. Besides the current identity, also the desired future identity frames the interpretations of MAs (Taylor and Scapens, 2016; Morales, 2019). *Endenich, C. (2014), Economic crisis as a driver of management accounting change: comparative evidence from Germany and Spain, Journal of Applied Accounting Research, Vol. To be considered within the sample, only a review-process within the journal was required. 5, pp. Customer profitability analysis encourages a focus on strategically evaluating . 3, pp. and Worchel, S. (Eds), The Social Psychology of Intergroup Relations, Brooks/Cole Publishing Company, Pacific Grove, CA, pp. 35 No. 5 No. Because of contradictory findings regarding IT systems, we agree completely with Caglio (2003) and propose that more interpretive case studies about IT systems are required to identify their complex impacts. Our literature search was limited to journal articles in English-language on MAs identity or role. 22 No. 213-255. Finally, we have to mention the limitations of our systematic literature review. The differences between managerial and financial accounting include the stated fact that management accounting prepares reports for use within the organization by employees and managers while financial reports are generated for use by parties who are not a part of the organization i.e. and Dukerich, J.M. Ahrens and Chapman (2000) were the first to explicitly mention the identity of MAs, followed by Jrvinen (2009). For Life. (2017), The impact of role conflict and role ambiguity on accountants' performance: the moderating effect of emotional quotient, European Research Studies Journal, Vol. Identities and roles can be considered as two sides of the same coin: identity looks inward to ones self-definition and encompasses the internalized meanings and internal expectations connected with a role, whereas role looks outward to the interaction arrangement in an organizational setting and focuses on external behavior expectations related to a social position (Barley, 1989; Chreim et al., 2007; Goretzki et al., 2013; Stryker and Burke, 2000). 36-41. These perceptions are particularly recognizable within the discussion of the individual aspects, for instance, their struggle with multiple identities, inner conflicts, incompatible competencies, multiple and desired identities. 3, pp. finance managers), finance analyst, MAs, cost accountants, Manufacturing division of a multinational pharmaceuticals organization, 16 medium and large firms in the manufacturing sector, 36 semi-structured interviews with MAs and operations managers, 5 firms located in the same geographical region from different sectors with a workforce from 400 to 1,400, Accountants, managers, information system (IS) and line people, and some final enterprise resource planning (ERP) users; at different levels of the organization, Medium-sized firm in the pharmaceutical sector, 1 Spanish royal tobacco factory; state owned, monopolist, 251 of the MAs market of the Netherlands; all graduates from universities, Different sectors and firms in the Netherlands, 33 medium-large companies in Dublin, broad cross-section of industries, Randomly selected organizations registered in a commercial directory with more than 400 employees, 16 heads of management accounting, 4 CFOs, 9 Spanish and 9 German firms from 4 industries, 409 respondents for the cross-sectional sample and 95 for the longitudinal, 504 different organizations of different industries, most of them are medium-sized, 11 companies from mainly the manufacturing sector, 46 semi-structured interviews with the CFOs, MAs and managers, formal and informal meetings, internal company data, Case study about an organization operating in the consumer goods industry, located in a German-speaking country, 46 interviews with 43 top and operative managers and MAs, 1 international manufacturing firm, headquartered in Germany, Analysis of 161 job ads and 56 financial/finance accountants, Firms in the southeast of England in a variety of industry groups, 4 CFOs, 1 MA, 2 general managers, 1 consultant, 6 internationally operating firms, listed in Helsinki Stock Exchange, 16 CFOs, MAs, IT managers, and project managers; internal company data, Decentralized units of large and medium-sized firms in different industries, 18 interviews with accounting employees (e.g. In the following years, very diverse identity topics such as the link between role changes and identity reconstructions (Goretzki et al., 2013) or the tensions between existing and idealized identities (Morales and Lambert, 2013) were examined. First, there's bookkeeping. Implications of information systems and digitalization as decisive issues are intensively debated in the literature sample (Jrvenp, 2007; Oesterreich and Teuteberg, 2019). Acknowledging that identity is only partially formed in workplaces (Ashforth et al., 2008; Brewer and Gardner, 1996; Jrvinen, 2009; Postmes and Jetten, 2006), this systematic literature review focuses on professional identities. 2, pp. In short, management accounting is essential for businesses to ensure that their objectives are met. 23 No. Tajfel, H. and Turner, J. In the 1990s, there are some historical considerations about MAs (Boyns and Edwards, 1997; Carmona et al., 1997; Edwards et al., 1995). In capital budgeting analysis, managerial accountants calculate the net present value (NPV) and the internal rate of return (IRR) to help managers to decide on new capital budgeting decisions. 3, pp. Our conceptual framework systematizes the focus areas of the literature for delivering a comprehensive overview of the existing knowledge and a foundation for synthesis and further discussion. (1989), Occupational role dimensions: the profession of management accounting, The British Accounting Review, Vol. *Kaye, G.R. There are different bases of identity deriving from the membership of a social group (Hogg and Abrams, 1988; Stryker and Burke, 2000; Tajfel, 1978; Tajfel and Turner, 1979) or the occupation of a role (Burke and Tully, 1977; Stets and Burke, 2000; Stryker and Burke, 2000; Thoits, 1983, 1986). 410-436. 3, pp. Table 4 offers a synthesis of findings from the identified articles on organizational aspects of the changing identities. It is concerned with the presentation of data to predict inconsistencies in finances that help managers make important decisions. 5, pp. (Eds), Handbook of Career Theory, Cambridge University Press, Cambridge, pp. Analyzes data:The accounting data is presented in a meaningful way by calculating ratios and projecting trends. Management accounting and financial accounting are two major accounting systems used by various organizations. 1, pp. Management accounting, with the help of different techniques, formats the future course of action. Therefore, it is questioned how the compliance model can work with the business partner model (Byrne and Pierce, 2007) or how change is hindered by these conflicting priorities (Emsley and Chung, 2010). Understandable. By now, we know that the information to make managerial decisions is dependent on financial statements. Analysis thus helps in preparing the budgets. Learn More. and Vondracek, F.W. *Baldvinsdottir, G.H. Conclusion. That way there might be bias in decision-making process. 123-153. (1999), Multiple identities and identity transition: implications for Hong Kong, International Journal of Intercultural Relations, Vol. 13 No. 411-446. A further noteworthy difference is the separation of financial and management accounting in several European countries, which results in processes organized into two separate cycles. (2019), Management accounting research on farms: what is known and what needs knowing?, Journal of Accounting and Organizational Change, Vol. 1, pp. *Bougen, P.D. The closer cooperation and proximity to managers and other departments influence MAs identities, because MAs work within organizations with a distinguishable identity and, at the same time, within workgroups with a certain understanding of their identities. Nevertheless, high image may concurrently engender MAs who identify more with their profession, thereby emphasizing high professional standards, transparency and ethical orientation (Hiller et al., 2014). 11 No. Constraint analysis:Managerial accounting monitors the constraintson profits and cash flow with respect to a product. In the initial stages,it depicts the organisational feasibility and consistency of various segments of a plan. 33 Nos 7/8, pp. Moreover, the authors appreciate the encouraging comments, helpful notes and suggestions from the reviewers and the participants of the Annual Congress of the European Accounting Association (EAA) in Cyprus 2019. 73-105. An MA is understood as the task carrier of management accounting practices and, especially in the past two decades, it is propagated that MAs have developed from traditional bean counters to business partners (Granlund and Lukka, 1997; Jrvenp, 2007; Sorensen, 2009). (2000), The past, present, and future of identity theory, Social Psychology Quarterly, Vol. 363-384. Inventory valuation and product costing:This deals with determining the actual cost of goods and services. (1980), Role conflicts of management accountants and their position within organisation structures, Accounting Organizations and Society, Vol. Additional factors such as system complexity, time and money (Granlund and Malmi, 2002) or system integration, standardization and routinization (Scapens and Jazayeri, 2003) have to be considered. Whereas financial accounting is prepared after a certain period of time and used by external users, managerial accounting is prepared by the management accountant for internal . The main objective of managerial accounting is to assist the managementof a company in efficiently performing its functions: planning, organizing, directing, and controlling. 16 No. However, the functions of these two forms of accounting are quite different: management accounting is focused on monitoring and analyzing the effect of management decisions, financial accounting is focused on short-term, external reporting. Successful managerial decisions enable organisational profitability and accounting aids effective managerial decisions [].Aimed at optimising the decision-enabling substance of accounting, management was criticised in 1980s as being too focused on internal operational issues that offer little to management from the point of strategy formulation and sustaining competitive . Concerning the changing competencies of MAs, our sample shows that business orientation leads to increasing new competencies without reducing the old ones. Social competencies are gaining significance, as MAs depend on functioning networks to communicate their information and to convey their ideas. *Boyns, T. and Edwards, J.R. (1997), Cost and management accounting in early Victorian Britain: a chandleresque analysis?, Management Accounting Research, Vol. 15 No. The results of this review are of high practical relevance for daily interactions in companies. 44 No. *Joshi, P.L. Secondary data were often used to complement and enrich findings. 4, pp. Furthermore, the identity perspective offers new issues for management accounting research, practice and education such as nested identity, multiple or desired identities. 19-46. Hiller et al. 252-278. Managerial accounting (also known as cost accounting or management accounting) is a branch of accounting that is concerned with the identification, measurement, analysis, and interpretation of accounting information so that it can be used to help managers make informed operational decisions. The literature illustrates a fragmented and contradictory picture of the MA. Business partnering: is it all that good? (1979), An integrative theory of intergroup conflict, in Austin, W.G. Section 3 explains the methodology, followed by characteristics of the reviewed articles in Section 4. Further studies (Granlund and Malmi, 2002; Jrvenp, 2007; Scapens and Jazayeri, 2003) claim that a new IT system can only offer an opportunity for change but is not solely decisive for a role or identity change. The consequences of more business orientation might be far-reaching as it could mean a conversion from a distant, critical and objective outsider toward an active MA contributing to relations between organizational members (Baldvinsdottir, 2009). 38 No. 22 No. As a result of this external template, MAs tend to perceive their identity in this propagated way, more or less independent from what they really do (Rieg, 2018). Along their self-declared aims and interests, the vast majority of the journals (19) are accounting journals. Decentralization of MAs is regarded as a key element for business orientation, because increased proximity changes the values, attitudes and interactions of MAs (Jrvenp, 2007; Pierce and ODea, 2003; Vaivio, 2004). 283-303. Thus, individual aspects encompass multiple identities, identity conflicts, competencies and characteristics, as well as desired and ideal identity. Similar to prior reviews in the field of business and management (Senftlechner and Hiebl, 2015), studies that contain more information regarding our research focus were regarded as richer and are more often cited. *Lambert, C. and Sponem, S. (2012), Roles, authority and involvement of the management accounting function: a multiple case-study, European Accounting Review, Vol. While the debates on bean counter stereotypes are interestingly still a topic in the 2000s (Friedman and Lyne, 2001; Vaivio and Kokko, 2006), business partnering started to dominate the role discussion within academic literature (Byrne and Pierce, 2007; Jrvenp, 2007; Lambert and Sponem, 2012; Rieg, 2018; Windeck et al., 2015). The term role is discussed in modern science since the work of Linton (1936), who defines role as a set of behaviors linked to the inhabited status. 881-897. *Morales, J. 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