Effective accounting processes: the role of formal and informal controls
Journal
Journal of Management Control
ISSN
2191-4761
Type
journal article
Date Issued
2019
Abstract (De)
Optimization efforts are increasingly applied to finance departments in organizations, particularly to routinized accounting processes.Mixedsatisfaction levels related to performance outcomes hint at control issues in finance departments. Accounting activities are characterized by well understood task environments that are addressed by formal controls. Yet, these activities are also interrelated and people-intensive, which might require other controls complementing formal ones. While current evidence considers merely the role of formal controls, we examine the effect of formal and informal controls as well as their combined effects in accounting processes. Regarding formal controls, results from a cross-sectional survey indicate that process controls have a positive direct effect on information quality while we cannot show any effect for output controls. Among the informal controls, peer pressure accentuates the effect of process controls if the controls are combined. Third, an identification-inducing working environment has a positive impact on information quality. Yet, the positive effect of process controls deteriorates when applied in combination with a positive working environment. This contributes to the literature on at least two dimensions: First, we underline the role of informal controls in accounting processes; second, our data hints at complementary and substitutive effects of formal and informal controls in the accounting function
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Springer
Start page
1
End page
22
Subject(s)
Eprints ID
257163