5.2 Research Hypotheses and Research Design
5.2.3 Integration of Accounting Systems
easily reconciled to FA data, which is subject to more strict compliance rules and internal and external checks (Wagenhofer2006).
Based on these considerations, Weißenberger and Angelkort focused their anal- ysis on the effects of the integration of financial and management accounting on controllership effectiveness. To test their research hypotheses, they used a survey of 1,500 German firms (the results are shown in Fig.5.1). They found that there is no direct effect between the integration of accounting systems and controllership output quality, measured by the managers’ perceived quality of the controlling department. Surprisingly, they found an indirect correlation between these two variables, a relationship that is fully mediated by the consistency of financial language, measured by the managers’ perceived quality of the FA information produced by the integrated accounting system (Weißenberger and Angelkort2011).
Nonetheless, no empirical findings have been produced yet in the Italy.
From these assumptions, and to enrich the literature on the link between inte- gration of accounting systems and management satisfaction about MA information, the following hypothesis is put forward:
Hp4: The level of integration of accounting systems positively affects the level of perceived quality in MA.
Referring to the international literature that has recently analyzed the conver- gence of FA and MA8and the relative implications for firms, for managers and even practitioners, it is relevant to analyze the relationship between the perceived quality of MA and the perceived quality of FA.
As Hemmer and Labro (2008) pointed out, the two disciplines are intimately correlated to each other: “We show that, contrary to the standard textbook propo- sition, properties of management and financial accounting systems are not inde- pendent” (Hemmer and Labro2008: 1).
Particularly, in the Italian context, the recent literature on this topic has produced some argumentations and preliminary findings that provide promising evidence on the possible alignment between FA and MA (Cinquini and Tenucci2011; Quagli
Integration level of accounting
systems
Consistency of financial
language
Controllership output quality
Controllership impact on management
decisions .55***
.67***
.67***
.43***
.43***
.00 .00
R2=.30 R2=.30 R2=.45
R2=.45 R2=.18
R2=.18
Fig. 5.1 Research model and SEM results on the link between integration of accounting system and controllership output quality in Germany (Source: Weißenberger and Angelkort2011: 172)
8For additional insights into the convergence of FA and MA see Chaps.3and4.
2011; Zambon2011). In Italy, however, a deep divergence between FA and MA was rooted in the Italian tradition of Economia Aziendale9(Business Administra- tion) (Zambon2011), in which internal matters (such as cost accounting tools and practices) are kept apart from the FA system, thus creating and maintaining two separate accounting systems (Bergamin Barbato et al.1996). Despite these consid- erations, Zappa defined Economia Aziendale through a unitary and systemic vision, since he recognized a unique aim for the three main levels of the analysis of the firm: organization, management and accounting (Zappa1927: 20).
In a similar vein, Quagli (2011) opens interesting research avenues regarding the possibility of overcoming the traditional barriers between financial and manage- ment accounting, by exploiting the goodwill accounting and the impairment test.
According to his perspective, FA practices became, in fact, opportunities for MA changes, whereas the typical activities of MA can be viewed as potentialities which may be exploited by financial accountants, even in providing additional disclosure for markets. In this regard, Quagli proposed the following research model to analyze the dynamic relationships between FA and MA (Fig.5.2).
Potential improvements
Additional disclosure for investors and analysts Development of new performance
measurements “impairment test - based”
Possibilities Structure of CGUs, Asset allocation, cash flow forecasts, cost of capital
Integration of reporting processes Integration of organizational strcture
Integration of AIS
Exigencies of FA Opportunities for MA Identification of CGUs, Goodwill allocation ,
Need of financial forecasts, use of present values
Financial Accounting (FA) Management
Accounting (MA)
Fig. 5.2 The dynamic relationships between financial and management accounting (Source:
Quagli2011: 32)
9The term “Economia Aziendale” was coined by Gino Zappa in 1927 during an official speech.
1927. Economia Aziendale was defined in the following way:The science which focuses on the conditions of existence and the manifestations of the life of firms. Thus it is the science of the business administration(Zappa1927: translated from the original).
5.2 Research Hypotheses and Research Design 93
He concluded with a call for more research to evaluate whether FA rules may bring about changes in MA or whether MA may affect FA. He argued that these issues are relevant for researchers, managers and firms at large.
Furthermore, Cinquini and Tenucci (2011) analyzed the potential of MA in providing financial and non-financial information, within the framework of the management commentary.10 Hence, they identified day-by-day activities that linked the management accountants with the financial accountants, increasing the overall value performance information perceived by these types of managers.
Nonetheless, no empirical findings with regard to the relationship between the management satisfaction with the overall quality of FA and the management satisfaction with the overall quality of MA have been produced yet in the Italy.
From these assumptions and to shed some light on such relationship, the following hypothesis is put forward:
Hp5: The level of perceived quality in FA positively affects the level of perceived quality in MA.