as follows: (1) personal data of the interviewee; (2) features of the firm; (3) conver- gence between FA and MA; (4) IAS/IFRS; (5) ERP; and (6) final section and suggestions.
The IAS/IFRS variable indicates whether the firm adopts and currently uses International Accounting Standards (1 if the firm currently uses IAS/IFRS and 0 if the firm does not use IAS/IFRS).
5.4.2 Endogenous Variables
Endogenous variables are those variables with explicit causes; they can be either intervening causal variables or dependent variables. The former kind has both incoming and outgoing causal arrows in the path diagram, whereas the latter has only incoming arrows (Garson2009). In the research model shown in Fig.5.3, the endogenous variables are (1) Integration of Accounting System (Sect. 5.4.2.1);
(2) Perceived Quality of FA (Sect. 5.4.2.2); and (3) Perceived Quality of MA22 (Sect.5.4.2.3).
5.4.2.1 Integration of Accounting System Variable
The measurement of the level of Integration of Accounting System is mainly based on the definition given by Weißenberger and Angelkort. They defined the integra- tion level of the accounting system as follows: “the extent to which management accounting systems used by controllers are technically integrated with the financial accounting systems” (Weißenberger and Angelkort2011: 167). They identified, for the first time in the literature, a scale able to measure the level of integration of accounting systems. According to their research model, the present book considers the Integration of Accounting System as a formative variable, hence formed by a set of indicators.23
The Integration of Accounting System is therefore conceptualized using five indicators24which together are able to describe the convergence of FA and MA in terms of accounting systems.
The five items encompassed in Integration of Accounting System are the fol- lowing: (1) Consistency between short-term planning and financial GAAP; (2) Con- sistency between medium and long-term planning and financial GAAP;
(3) Consistency between deadlines for management reporting and financial reporting; (4) Consistency between information produced for internal purposes
extent various information systems are formally linked for the sharing of consistent information within an enterprise. Enterprise information systems integration is conceptualized along two dimensions: (1) data integration, and (2) enterprise communication networking” (Bhatt1995).
22The Integration of Accounting System and the Perceived Quality of FA are intervening causal variables, whereas the Perceived Quality of MA is the dependent variable.
23For further details about the difference between reflective and formative variables see also:
Diamantopoulos (2006,2008) and Coltman et al. (2008).
24All five items describing the Information Accounting System are equally weighted.
and information required for external purposes; and (5) Consistency between internal measures for operating income and the operating income published in the financial statements.25
With regard to the Consistency between short-term planning and financial GAAP, the question in the survey was: To which extent is short-term planning and budgeting based on valuation methods in accordance with financial GAAP (0 very low,. . ., 7 very high). With regard to Consistency between medium and long-term planning and financial GAAP, the survey question was:To which extent is medium and long-term planning and budgeting based on valuation methods in accordance with financial GAAP (0 very low,. . ., 7 very high).
With regard to Consistency between deadlines for management reporting and financial reporting, the survey question was: To which extent are deadlines for management reporting and financial reporting harmonized? (0 very low,. . ., 7 very high). With regard to Consistency between information produced for internal purposes and information required for external purposes, the survey question was:
To which extent is the information produced for internal purposes in accordance with information required for external purposes? (0 very low,. . ., 7 very high).
With regard to Consistency between internal measures for operating income and the operating income published in the financial statements, the survey question was:
To which extent is the internal measure for operating income in accordance with the operating income published in the financial statements? (0 very low,. . ., 7 very high).
Descriptive statistics of Integration of Accounting System and the items used to construct this variable are reported in Tables5.1and5.7.
5.4.2.2 Perceived Quality of Financial Accounting Variable
The measurement of the Perceived Quality of FA is in part based on the definition given by Weißenberger and Angelkort for the consistency of financial language which “reflects the extent to which information provided by financial and manage- ment accounting is perceived as coherent and consistent by management.”
(Weißenberger and Angelkort 2011: 168). As opposed to the above-mentioned scholars, who used three reflective indicators to measure the consistency of finan- cial language, the present work measures the Perceived Quality of FA through the managers’perception about the level of the overall quality in FA information due to a high level of integration between FA and MA.
With regard to this variable, the survey question was:To which extent do you perceive an improvement in the quality of FA due to a high level of integration between FA and MA? (0 very low,. . ., 7 very high).
Descriptive statistics of Perceived Quality of FA are reported in Table5.1.
25The survey questions are derived from the survey carried out by Weißenberger and Angelkort (2011).
5.4 Variable Measurement 99
5.4.2.3 Perceived Quality of Management Accounting Variable
The measurement of the Perceived Quality of MA is determined starting from the definition given by Weißenberger and Angelkort with regard to controllership output quality, which “measures the quality of the controlling department’s outputs in terms of, e.g., scope, timeliness or accuracy as perceived by management”
(Weißenberger and Angelkort 2011: 168). In contrast to the above-mentioned authors, who used six reflective indicators to measure controllership output quality, the present work measures the Perceived Quality of MA through the managers’ perception about the level of the overall quality in MA information due to a high level of integration between FA and MA.
With regard to this variable, the survey question was:To which extent do you perceive an improvement in the quality of MA due to a high level of integration between FA and MA? (0 very low,. . ., 7 very high).
Descriptive statistics of Perceived Quality of MA are reported in Table5.1.
5.4.3 Control Variables
Control variables for the research design regard either respondents’ features or firms’features. The former control variables are: (1) Respondents’Role,26Respon- dents’Gender,27Respondents’Education,28 and Respondents Age,29whereas the second group of control variables are: (1) Size,30(2) Industry,31and (3) List.32 Table 5.1 Descriptive statistics for the research variables for the whole dataset (N¼107)
Variable Mean Min Max Std. Dev.
ERP 1.08 0 2 0.702
IAS/IFRS 0.45 0 1 0.500
Integration of accounting system 4.46 1.6 7 1.226
Perceived quality of FA 4.67 1 7 1.571
Perceived quality of MA 4.43 1 7 1.603
261 if the respondent is a controller and 0 if the respondent is a financial accountant.
271 if the respondent is a male and 0 if the respondent is a female.
281 if the respondent has a Ph.D. or a Master’s, 2 if the respondent has a bachelor’s degree and 3 if the respondent has just a diploma.
291 if the respondent is less than 35 years old, 2 if the respondent is between 35 and 50 years old and 3 if the respondent is more than 50 years old.
301 if the firm is a big firm (more than 250 employees), 2 if the firm is medium-size (between 15 and 250 employees) and 3 if the firm is small (less than 15 employees).
311 if the firm belongs to the industrial sector, 2 if the firm belongs to the service sector, and 3 if the firm belongs to another sector (with the exclusion of the financial and banking sectors, given their peculiarities that make them non-comparable firms with respect to the other sectors).
321 if the firm is a listed firm and 0 if the firm is a non-listed firm.