Summary by Eileen Z. Taylor
Ph.D. Program in Accounting
University of South Florida, Spring 2004
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This paper is written in response to criticisms by Zimmerman (2001) of the authors’ earlier work “Assessing empirical research in managerial accounting: a value-based management perspective” JAE (2001). Essentially, the authors had put forth a framework to describe and classify the past research completed in management accounting. Zimmerman criticized both their framework, as well as managerial accounting research in general, for being descriptive and without underlying theory.
Zimmerman points to practice-oriented research as the reason managerial accounting research has not yet come up with its own set of theories. Ittner and Larcker argue that since accounting is an applied discipline; it is necessary to study problems from a practice perspective. Further, one goal of such research should be to improve practice. This is not independent from theory development. In fact, both economic and non-economic theories are being studied as they relate to managerial accounting.
The authors also find fault with reviewers who disregard performance-based measurements as invalid. They posit that application of the economic-based ‘rational decision-maker’ does not hold in practice. In order to go forward with theory-testing, it is necessary to admit that economic assumptions are artificial constraints that limit us.
Ittner and Larcker suggest we look to the field of finance for alternative, behavioral theories. We must also be open to field and descriptive studies as a way to examine accounting in practice. We cannot empirically validate theories without seeing them ‘in action.
Finally, the authors point to other areas of accounting and note the lack of an overarching theory to explain behavior. The lack of an “integrated underlying theoretical framework” that explains behavior should not preclude future research.
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Articles related to this issue in the order that they were published:
Ittner, C. D. and D. F. Larcker. 2001. Assessing empirical research in managerial accounting: A value-based management perspective. Journal of Accounting and Economics (December): 349-410. (Summary).
Zimmerman, J. L. 2001. Conjectures regarding empirical managerial accounting research. Journal of Accounting and Economics (December): 411-427. (Summary).
Hopwood, A. G. 2002. If only there were simple solutions, but there aren't: Some reflections on Zimmerman's critique of empirical management accounting research. The European Accounting Review 11(4): 777-785. (Summary).
Ittner, C. D. and D. F. Larcker. 2002. Empirical managerial accounting research: Are we just describing management consulting practice? The European Accounting Review 11(4): 787-794.
Luft, J. and M. D. Shields. 2002. Zimmerman's contentious conjectures: Describing the present and prescribing the future of empirical management accounting research. The European Accounting Review 11(4): 795-803. (Summary).
Lukka, K. and J. Mouritsen. 2002. Homogeneity or heterogeneity of research in management accounting? The European Accounting Review 11(4): 805-811. (Summary).
For a related argument see Bennis, W. G. and J. O'Toole. 2005. How business schools lost their way. Harvard Business Review (May): 96-104.(Summary).