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Theoretical Foundations

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Book cover Financial Accounting and Management Control

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

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Abstract

This chapter is a detailed description and analysis of the tensions and conflicts between uniformity and uniqueness. The first sections in the chapter provide an overview of earlier studies and frameworks. After that we present our theoretical framework. The starting point is that the management control system is uniquely designed and used to meet the needs of a specific company, Against this, the external demands for financial accounting is discussed, an information system that is mainly about attaining comparability in order for owners and funders to make informed decisions, but where the uniqueness of the company must also be grasped in order for it not to lose relevance.

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Notes

  1. 1.

    Kaplan (1984) ends his argumentation by citing Davidson who argued as early as 1963 that “the internal information needs for managing the organization not be made subservient to the external reporting system”.

  2. 2.

    For an introduction to some implementation effects of the introduction of IFRS in Europe, see Schipper (2005). One of her conclusions is that effective enforcement of IFRS will contribute to a faster convergence process for financial reporting standards in Europe. Hellman (2011) studying the implementation of IFRS in Sweden draws a similar conclusion stating that “with weak enforcement of IFRS, the change in standards will not lead to the same implementation across firms in accounting practice” (ibid., p. 81).

  3. 3.

    For example, Törnqvist (1999, p. 143) has presented a figure that illustrates the relationship between financial accounting and management accounting when studying accountability. However, this figure—similar to other frameworks and models—does not show what affects the design and use of the two information systems. Nor are the causal relationships between the information systems shown.

  4. 4.

    Scapens (2006) discusses three different types of institutional theory: New institutional economics (NIE) that “uses economic reasoning to explain diversity in forms of institutional arrangements” (ibid., p. 11). New institutional sociology (NIS) that “seeks to explain why organisations in particular fields appear to be similar” (ibid., p. 12) and finally Old institutional economics (OIE) that is used to “understand what shapes management accounting practices in individual organisations” (ibid., p. 14). The paper by DiMaggio and Powell (1983) belongs to NIS.

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  1. Department of Business Studies, Uppsala University, Uppsala, Sweden

    Fredrik Nilsson & Anna-Karin Stockenstrand

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  1. Fredrik Nilsson
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Nilsson, F., Stockenstrand, AK. (2015). Theoretical Foundations. In: Financial Accounting and Management Control. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-13782-7_2

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