Knowledge, Ability, and Success in Managerial Accounting
Posted: 3 Sep 1998
Using archival and survey data on 2,941 practicing managerial accountants, we explore four questions related to the determinants of success in managerial accounting: (1) Are there differences in knowledge content and ability among managerial accountants at different ranks? (2) Are there differences in the variability of knowledge content and ability among managerial accountants at different ranks? (3) Are the determinants of success in managerial accounting consistent with the Libby & Luft (L&L) model? and (4) Are differing types of knowledge and levels of ability needed for success at different ranks in managerial accounting? We find: (1) higher levels of technical knowledge among juniors and higher levels of industry and tacit managerial knowledge (TMK) among managers, (2) lower variability in the technical knowledge, and higher variability in the industry knowledge, of juniors compared with seniors and managers, (3) general (though not unequivocal) support for the determinants of success identified in the L& L model, and, (4) that technical accounting knowledge predicts job performance evaluations for juniors while industry and tacit managerial knowledge (TMK) predict job performance evaluations for seniors and managers.
Our study is among the first large-sample field-based studies to link actual accounting job performance with measures of professional accountants' knowledge and ability. Our contributions include: (1) for the first time, measuring and assessing the job performance effects of ability, technical knowledge, industry knowledge, and the sub-components of tacit managerial knowledge among managerial accountants, and (2) examining the variability in ability and knowledge of managerial accountants across organizational levels.
JEL Classification: M40, M46
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